STORY: Two years into building his business, Tony convinced himself he could become the nation's thought leader on planned giving fundraising — not just for nonprofits, but for all Americans. He walked into a swanky Midtown Manhattan PR agency, got dazzled by a four-inch binder, and signed up at $6,750 per month. Two months and $13,500 later, his only return was a single bylined op-ed in a free subway newspaper.

LEARNING: Check your ego. Vet your big ideas with honest, trusted people before spending any money. Understand that PR, even when it works, rarely converts to actual revenue.

"This was an ego investment. I did it for my vanity project. I got one placement in a giveaway newspaper on a federal holiday when nobody was in the subway. That was it."

Tony Martignetti

Guest profile

Tony Martignetti is the evangelist for Planned Giving fundraising for small- and mid-size nonprofits. Connect with him on LinkedIn.

Check out Tony's free How-to Guide on Planned Giving Fundraising.

Worst investment ever

Two years into running his consultancy, Tony had a big idea. He didn't just want to serve the nonprofit sector; he wanted to reach all Americans and make planned giving a concept that everyday citizens (not just charity insiders) would understand and act on.

To do that, Tony decided he needed PR, the kind that lands you on 60 Minutes and gets Charlie Rose calling.

He found his way to a prestigious agency in Midtown Manhattan, far from his own modest office in the Flatiron neighborhood. They had an 80-story skyscraper overhead to match. At the pitch meeting, they brought out what Tony describes as a four-inch-thick three-ring binder, every page in a plastic sleeve. Client on The Today Show. Client on Good Morning America. Client on 60 Minutes. Client with Charlie Rose.

All this sucked Tony in, and he bought it all—hook, line, and sinker. They kept feeding his ego. He signed on at $6,750 per month.

What he got for $13,500

After two months, Tony canceled the contract. His total return: one bylined op-ed in AM New York, a free newspaper distributed in New York City subway stations. The placement ran on Martin Luther King Day. A federal holiday when subway ridership was a fraction of normal on a Tuesday.

No leads from Good Morning America. No call from 60 Minutes. No magazine profiles. No newspaper reporters are following up. Nothing promising on the horizon. Just $13,500 lighter and one op-ed that almost nobody read.

Why the agency let it happen

The agency saw a solo entrepreneur with ideas far bigger than the media landscape could realistically support, and instead of managing Tony's expectations honestly, they kept stoking his enthusiasm to secure the fee. They should have talked him down to what's reasonable to expect. Instead, they completely mismanaged his expectations and kept feeding his ego to capture a fee.

The fundamental problem was that Tony's ambition—to educate ordinary Americans about the value of nonprofits, then about the value of supporting them long-term, then to direct them toward specific giving vehicles—was a multi-step awareness campaign that no single PR placement could accomplish. It was simply too much to ask of the media.

The uncomfortable truth about PR and revenue

Years after the failed agency experiment, Tony had better PR results. He hired a skilled freelance publicist who secured quotes for him in The New York Times, the Wall Street Journal, and the Chronicle of Philanthropy, the leading trade publication in his sector. Reporters on the nonprofit beat came to know him and called him when they needed a source.

And yet: not one new client ever picked up the phone because they saw Tony's name in the Times. This taught him a lesson: PR is more about reputation and awareness than revenue.

Lessons learned

• PR might get done right, and it still won't save you. It can build reputation and awareness over the years. It is not a customer acquisition channel.
• For early-stage founders, the honest question to ask before writing a large check is: Is this actually going to build the business, or is this about making me feel like I've arrived?
• Don't go check your idea with the people who are going to get a fee for capitalizing on your pie-in-the-sky idea. The people most likely to validate an idea are often the ones most financially motivated to tell you it's great. Lawyers, consultants, vendors, agencies—all have a stake in your enthusiasm. The honest input has to come from people with nothing to gain: trusted colleagues, mentors, or experienced friends who will tell you what they actually think.

Andrew's takeaways

• Ego investments are a universal founder trap. Almost every entrepreneur who has started a business has made at least one purchase driven more by identity and aspiration than by clear ROI thinking. Naming it "a vanity investment" is the first step to catching it before it costs you.
• PR almost never converts to customers. This is one of the most consistent findings across hundreds of My Worst Investment Ever PR can build credibility and awareness over time. But it is not a sales channel, and expecting it to deliver clients, especially early in a business, is a setup for disappointment.
• The stage of business matters for marketing strategy. Early-stage businesses need direct, efficient client acquisition, not brand awareness campaigns aimed at broad audiences. Align your marketing spend with where you actually are, not where you imagine yourself to be.
• The media landscape has to be ready for your idea. Tony's vision of educating all Americans about planned giving required multiple layers of awareness-building before a single TV segment could have any effect. Even flawless PR execution couldn't shortcut that process.

Actionable advice

• Ask yourself: Is this a business investment or an ego investment? Before any significant marketing or PR spend, write down the specific customer acquisition outcome you expect. If you can't describe a clear path from the spend to a paying client, it's probably a vanity investment.
• Match your marketing strategy to your business stage. In the first two to three years, most professional service firms grow through direct outreach, referrals, and relationship-building rather than mass media. Invest accordingly.
• Understand what PR actually does. PR builds reputation and credibility over the long term. If that's your goal, it can be worth it. If your goal is revenue next quarter, look elsewhere.
• If you're going to do PR, set explicit expectations in writing. What placements will they pursue? In what timeframe? What counts as success? If the agency won't commit to specifics, that tells you something important.

No. 1 goal for the next 12 months

Tony's number one goal for the next 12 months is to publish his first self-published book: Planned Giving Accelerated, due out in September. A companion course will follow the book's release.

Parting words

"Thank you very much, Andrew. This was great, great fun. It's very different than what I've done."

Tony Martignetti

[spp-transcript]

Connect with Tony Martignetti

• LinkedIn
• YouTube
• Podcast

Andrew’s books

• How to Start Building Your Wealth Investing in the Stock Market
• My Worst Investment Ever
• 9 Valuation Mistakes and How to Avoid Them
• Transform Your Business with Dr.Deming’s 14 Points

Andrew’s online programs

• Valuation Master Class
• The Become a Better Investor Community
• How to Start Building Your Wealth Investing in the Stock Market
• BIO: Tony Martignetti is the evangelist for Planned Giving fundraising for small- and mid-size nonprofits.

  STORY: Two years into building his business, Tony convinced himself he could become the nation's thought leader on planned giving fundraising — not just for nonprofits, but for all Americans. He walked into a swanky Midtown Manhattan PR agency, got dazzled by a four-inch binder, and signed up at $6,750 per month. Two months and $13,500 later, his only return was a single bylined op-ed in a free subway newspaper.

  LEARNING: Check your ego. Vet your big ideas with honest, trusted people before spending any money. Understand that PR, even when it works, rarely converts to actual revenue.

  "This was an ego investment. I did it for my vanity project. I got one placement in a giveaway newspaper on a federal holiday when nobody was in the subway. That was it."

  Tony Martignetti

  Guest profile

  Tony Martignetti is the evangelist for Planned Giving fundraising for small- and mid-size nonprofits. Connect with him on LinkedIn.

  Check out Tony's free How-to Guide on Planned Giving Fundraising.

  Worst investment ever

  Two years into running his consultancy, Tony had a big idea. He didn't just want to serve the nonprofit sector; he wanted to reach all Americans and make planned giving a concept that everyday citizens (not just charity insiders) would understand and act on.

  To do that, Tony decided he needed PR, the kind that lands you on 60 Minutes and gets Charlie Rose calling.

  He found his way to a prestigious agency in Midtown Manhattan, far from his own modest office in the Flatiron neighborhood. They had an 80-story skyscraper overhead to match. At the pitch meeting, they brought out what Tony describes as a four-inch-thick three-ring binder, every page in a plastic sleeve. Client on The Today Show. Client on Good Morning America. Client on 60 Minutes. Client with Charlie Rose.

  All this sucked Tony in, and he bought it all—hook, line, and sinker. They kept feeding his ego. He signed on at $6,750 per month.

  What he got for $13,500

  After two months, Tony canceled the contract. His total return: one bylined op-ed in AM New York, a free newspaper distributed in New York City subway stations. The placement ran on Martin Luther King Day. A federal holiday when subway ridership was a fraction of normal on a Tuesday.

  No leads from Good Morning America. No call from 60 Minutes. No magazine profiles. No newspaper reporters are following up. Nothing promising on the horizon. Just $13,500 lighter and one op-ed that almost nobody read.

  Why the agency let it happen

  The agency saw a solo entrepreneur with ideas far bigger than the media landscape could realistically support, and instead of managing Tony's expectations honestly, they kept stoking his enthusiasm to secure the fee. They should have talked him down to what's reasonable to expect. Instead, they completely mismanaged his expectations and kept feeding his ego to capture a fee.

  The fundamental problem was that Tony's ambition—to educate ordinary Americans about the value of nonprofits, then about the value of supporting them long-term, then to direct them toward specific giving vehicles—was a multi-step awareness campaign that no single PR placement could accomplish. It was simply too much to ask of the media.

  The uncomfortable truth about PR and revenue

  Years after the failed agency experiment, Tony had better PR results. He hired a skilled freelance publicist who secured quotes for him in The New York Times, the Wall Street Journal, and the Chronicle of Philanthropy, the leading trade publication in his sector. Reporters on the nonprofit beat came to know him and called him when they needed a source.

  And yet: not one new client ever picked up the phone because they saw Tony's name in the Times. This taught him a lesson: PR is more about reputation and awareness than revenue.

  Lessons learned

  • PR might get done right, and it still won't save you. It can build reputation and awareness over the years. It is not a customer acquisition channel.
  • For early-stage founders, the honest question to ask before writing a large check is: Is this actually going to build the business, or is this about making me feel like I've arrived?
  • Don't go check your idea with the people who are going to get a fee for capitalizing on your pie-in-the-sky idea. The people most likely to validate an idea are often the ones most financially motivated to tell you it's great. Lawyers, consultants, vendors, agencies—all have a stake in your enthusiasm. The honest input has to come from people with nothing to gain: trusted colleagues, mentors, or experienced friends who will tell you what they actually think.
  
  

  Andrew's takeaways

  • Ego investments are a universal founder trap. Almost every entrepreneur who has started a business has made at least one purchase driven more by identity and aspiration than by clear ROI thinking. Naming it "a vanity investment" is the first step to catching it before it costs you.
  • PR almost never converts to customers. This is one of the most consistent findings across hundreds of My Worst Investment Ever PR can build credibility and awareness over time. But it is not a sales channel, and expecting it to deliver clients, especially early in a business, is a setup for disappointment.
  • The stage of business matters for marketing strategy. Early-stage businesses need direct, efficient client acquisition, not brand awareness campaigns aimed at broad audiences. Align your marketing spend with where you actually are, not where you imagine yourself to be.
  • The media landscape has to be ready for your idea. Tony's vision of educating all Americans about planned giving required multiple layers of awareness-building before a single TV segment could have any effect. Even flawless PR execution couldn't shortcut that process.
  
  

  Actionable advice

  • Ask yourself: Is this a business investment or an ego investment? Before any significant marketing or PR spend, write down the specific customer acquisition outcome you expect. If you can't describe a clear path from the spend to a paying client, it's probably a vanity investment.
  • Match your marketing strategy to your business stage. In the first two to three years, most professional service firms grow through direct outreach, referrals, and relationship-building rather than mass media. Invest accordingly.
  • Understand what PR actually does. PR builds reputation and credibility over the long term. If that's your goal, it can be worth it. If your goal is revenue next quarter, look elsewhere.
  • If you're going to do PR, set explicit expectations in writing. What placements will they pursue? In what timeframe? What counts as success? If the agency won't commit to specifics, that tells you something important.
  
  

  No. 1 goal for the next 12 months

  Tony's number one goal for the next 12 months is to publish his first self-published book: Planned Giving Accelerated, due out in September. A companion course will follow the book's release.

  Parting words

  "Thank you very much, Andrew. This was great, great fun. It's very different than what I've done."

  Tony Martignetti

  [spp-transcript]

  Connect with Tony Martignetti

  • LinkedIn
  • YouTube
  • Podcast
  
  

  Andrew’s books

  • How to Start Building Your Wealth Investing in the Stock Market
  • My Worst Investment Ever
  • 9 Valuation Mistakes and How to Avoid Them
  • Transform Your Business with Dr.Deming’s 14 Points
  
  

  Andrew’s online programs

  • Valuation Master Class
  • The Become a Better Investor Community
  • How to Start Building Your Wealth Investing in the Stock Market
  • Finance Made Ridiculously Simple
  • FVMR Investing: Quantamental Investing Across the World
  • Become a Great Presenter and Increase Your Influence
  • Transform Your Business with Dr. Deming’s 14 Points
  • Achieve Your Goals
  
  

  Connect with Andrew Stotz:

  • astotz.com
  • LinkedIn
  • Facebook
  • Instagram
  • Threads
  • X
  • YouTube
  • My Worst Investment Ever Podcast
  
  ]]>29d64af4-6b56-4734-8ee2-f35b500b6b0aTue, 21 Apr 2026 06:00:00 +070026:27falsefullDavid Siegel – The Agentic Economy: Why AI Agents Will Redefine Work and WealthBIO: David Siegel is a Silicon Valley entrepreneur who has founded more than a dozen companies. He has written five books on technology and business, was once a candidate for the dean of Stanford Business School, and is now an AI thought leader leading an AI startup he hopes will pave the way for the agentic economy.

  STORY: Nine months after David's last appearance on the podcast, the conversation has shifted from "what are LLMs?" to agents that act. 60-65% of NYSE trades are already fully machine-to-machine—a preview of where all commerce is headed.

  LEARNING: You don't need to know exactly how AI works, but you need to get in the game.

  "The biggest investment mistake everyone is making right now is not appreciating the exponential nature of what we're in and what is coming. The next 12 months will be nothing like any 12 months that have ever happened in human history."

  David Siegel

  David Siegel is a Silicon Valley entrepreneur who has founded more than a dozen companies. He has written five books on technology and business, was once a candidate for the dean of Stanford Business School, and is now an AI thought leader leading an AI startup he hopes will pave the way for the agentic economy.

  David joins the podcast for the fourth time and discusses his latest progress in AI with Andrew.

  The health reset before we begin

  Before diving into AI, David opened with an invitation that even Andrew found surprising: a free online water-fasting event starting on April 20, 2026, with a preliminary strategy session on April 12.

  What is a water fast? David explains that it's not a diet or a weight-loss tool; it's a physiological reset. For three to six days, your body enters ketosis and "cleans house," activating suppressed systems and energizing you. David does this three to four times per year, emphasizing it's not a monthly practice but a strategic reset aligned with your health journey.

  The coaching program makes fasting easier and more fun through group accountability, with no obligation, just information to help anyone at any point in their health journey. Learn about fasting, or just join a group of people doing the same thing at the same time. It's designed for people from the West Coast to Europe. Please register for the event and feel free to invite anyone: https://us02web.zoom.us/meeting/register/Tk-zp9ZERomWb0643Sypmw.

  The agentic economy: what's coming in 20 years

  David's core message centers on a profound shift: we're entering the agentic economy, where machine-to-machine communication replaces human-to-website interaction. He notes that in 20 years, you won't shop on Amazon. There won't be advertising or marketing for humans. All those "Cialdini mind tricks" of urgency, storytelling, and Russell Brunson funnels will vanish. Everything will be machine-to-machine, just like the stock market today, where 65% of NYSE trades open and close in less than one second.

  Even driving will be prohibited because human reaction times cannot match the frequency of machine communication. We're in an awkward transitional period where humans and machines must coexist. Nobody likes it, but it's taking us toward a future where drudge work is automated.

  What is an AI agent?

  David clarified a critical distinction that many miss: LLMs (Large Language Models) talk back, type responses, and generate images and videos—but don't do anything outside your interaction.

  AI Agent, on the other hand, is an LLM connected to APIs that can actually take action: send emails, order meals, book travel, make purchases, and run ads. Think of it as a virtual remote assistant working 24/7 while you sleep.

  OpenClaw: The framework powering the revolution

  OpenClaw (CLAW = agents, inspired by lobsters from a forward-thinking fiction book) is an open-source framework created by Peter Steinberger on GitHub. It connects LLMs (the thinking entities) to APIs (the conduits for doing).

  This is revolutionary because it allows AI to take real-world actions. Previously, AI was confined to conversation. It can now execute tasks across systems. David strongly warns that OpenClaw is highly technical and requires API configuration. It's not designed for humans to use directly. It's for engineers building agent infrastructure.

  The security risks nobody is talking about

  David explains that agents introduce entirely new cybersecurity vulnerabilities that differ from traditional threats, such as social-engineering attacks against agents. For instance, impersonation via spoofed emails: "David wants a trip to Phoenix, book a flight," or multi-day, persistent attacks in which bots repeatedly try to extract secrets.

  David's approach with Claw Studio is to use APIs rather than scraping. Wherever possible, he attaches LLMs to official APIs with guardrails. This is safer and more sustainable than screen scraping, which violates Terms of Service and risks a shutdown.

  How to get started (without blowing yourself up)

  David's advice is clear: Don't do it yourself. That's suicide. With great power comes great responsibility. An agent can do almost anything, including deleting its own installation, wiping your disk clean, or draining your bank account. You want it to do almost nothing initially, then gradually widen the guardrails.

  The Redshift Labs/Claw Studio approach:

  1. Done-for-you setup like Red Hat for Linux
  2. Dedicated Chief of Staff agent with its own phone number
  3. Onboarding period of 1-2 weeks, where you download your life into the agent:
  4. Birthday, family members' emails, and daily routines
  5. It can research you online to build context.
  6. Separate setups for personal and business
  7. Forever memory, unlike standard LLM context windows that forget:
  8. Every Zoom call transcript gets piped in word-for-word.
  9. Searchable memory: "Who was I talking to about Tahoe skiing in November?"
  10. Agent retrieves exact conversations and can follow up.
  11. Reverse prompting—the paradigm shift:
  12. Instead of you telling the agent what to do, it tells you.
  13. Morning briefing: what happened overnight, what's coming up, what's changed
  14. Manages your calendar, project management, and priorities
  15. Breaks long-term goals into daily deliverables
  16. You're no longer the to-do list keeper.
  17. Security architecture:
  18. Virtual Private Server (VPS) hosting, not local machines
  19. Two-account system: one for operations, one for immutable backups
  20. All logs are piped to a one-way backup account.
  21. "Go back six hours" restore button, in case things go wrong.
  22. Humans in the loop for critical actions (e.g., agent queues payments, human approves)
  
  

  The biggest investment mistake everyone is making

  To conclude, David talked about the biggest investment mistake everyone is making right now: not appreciating the exponential nature of what we're in and what is coming. He noted that the next 12 months will be unlike any 12 months in business history. He stated that we're entering a recursive self-improvement phase, in which software will write the next generation of itself. The singularity isn't theoretical; it's happening now.

  David's advice is to stop thinking six months ahead. The pace is too fast. Instead:

  1. Take baby steps to position yourself.
  2. Prepare to accelerate like never before
  3. Invest in agent infrastructure now, while it "doesn't suck too bad", it will...]]>BIO: David Siegel is a Silicon Valley entrepreneur who has founded more than a dozen companies. He has written five books on technology and business, was once a candidate for the dean of Stanford Business School, and is now an AI thought leader leading an AI startup he hopes will pave the way for the agentic economy.

     STORY: Nine months after David's last appearance on the podcast, the conversation has shifted from "what are LLMs?" to agents that act. 60-65% of NYSE trades are already fully machine-to-machine—a preview of where all commerce is headed.

     LEARNING: You don't need to know exactly how AI works, but you need to get in the game.

     "The biggest investment mistake everyone is making right now is not appreciating the exponential nature of what we're in and what is coming. The next 12 months will be nothing like any 12 months that have ever happened in human history."

     David Siegel

     David Siegel is a Silicon Valley entrepreneur who has founded more than a dozen companies. He has written five books on technology and business, was once a candidate for the dean of Stanford Business School, and is now an AI thought leader leading an AI startup he hopes will pave the way for the agentic economy.

     David joins the podcast for the fourth time and discusses his latest progress in AI with Andrew.

     The health reset before we begin

     Before diving into AI, David opened with an invitation that even Andrew found surprising: a free online water-fasting event starting on April 20, 2026, with a preliminary strategy session on April 12.

     What is a water fast? David explains that it's not a diet or a weight-loss tool; it's a physiological reset. For three to six days, your body enters ketosis and "cleans house," activating suppressed systems and energizing you. David does this three to four times per year, emphasizing it's not a monthly practice but a strategic reset aligned with your health journey.

     The coaching program makes fasting easier and more fun through group accountability, with no obligation, just information to help anyone at any point in their health journey. Learn about fasting, or just join a group of people doing the same thing at the same time. It's designed for people from the West Coast to Europe. Please register for the event and feel free to invite anyone: https://us02web.zoom.us/meeting/register/Tk-zp9ZERomWb0643Sypmw.

     The agentic economy: what's coming in 20 years

     David's core message centers on a profound shift: we're entering the agentic economy, where machine-to-machine communication replaces human-to-website interaction. He notes that in 20 years, you won't shop on Amazon. There won't be advertising or marketing for humans. All those "Cialdini mind tricks" of urgency, storytelling, and Russell Brunson funnels will vanish. Everything will be machine-to-machine, just like the stock market today, where 65% of NYSE trades open and close in less than one second.

     Even driving will be prohibited because human reaction times cannot match the frequency of machine communication. We're in an awkward transitional period where humans and machines must coexist. Nobody likes it, but it's taking us toward a future where drudge work is automated.

     What is an AI agent?

     David clarified a critical distinction that many miss: LLMs (Large Language Models) talk back, type responses, and generate images and videos—but don't do anything outside your interaction.

     AI Agent, on the other hand, is an LLM connected to APIs that can actually take action: send emails, order meals, book travel, make purchases, and run ads. Think of it as a virtual remote assistant working 24/7 while you sleep.

     OpenClaw: The framework powering the revolution

     OpenClaw (CLAW = agents, inspired by lobsters from a forward-thinking fiction book) is an open-source framework created by Peter Steinberger on GitHub. It connects LLMs (the thinking entities) to APIs (the conduits for doing).

     This is revolutionary because it allows AI to take real-world actions. Previously, AI was confined to conversation. It can now execute tasks across systems. David strongly warns that OpenClaw is highly technical and requires API configuration. It's not designed for humans to use directly. It's for engineers building agent infrastructure.

     The security risks nobody is talking about

     David explains that agents introduce entirely new cybersecurity vulnerabilities that differ from traditional threats, such as social-engineering attacks against agents. For instance, impersonation via spoofed emails: "David wants a trip to Phoenix, book a flight," or multi-day, persistent attacks in which bots repeatedly try to extract secrets.

     David's approach with Claw Studio is to use APIs rather than scraping. Wherever possible, he attaches LLMs to official APIs with guardrails. This is safer and more sustainable than screen scraping, which violates Terms of Service and risks a shutdown.

     How to get started (without blowing yourself up)

     David's advice is clear: Don't do it yourself. That's suicide. With great power comes great responsibility. An agent can do almost anything, including deleting its own installation, wiping your disk clean, or draining your bank account. You want it to do almost nothing initially, then gradually widen the guardrails.

     The Redshift Labs/Claw Studio approach:

     1. Done-for-you setup like Red Hat for Linux
     2. Dedicated Chief of Staff agent with its own phone number
     3. Onboarding period of 1-2 weeks, where you download your life into the agent:
     4. Birthday, family members' emails, and daily routines
     5. It can research you online to build context.
     6. Separate setups for personal and business
     7. Forever memory, unlike standard LLM context windows that forget:
     8. Every Zoom call transcript gets piped in word-for-word.
     9. Searchable memory: "Who was I talking to about Tahoe skiing in November?"
     10. Agent retrieves exact conversations and can follow up.
     11. Reverse prompting—the paradigm shift:
     12. Instead of you telling the agent what to do, it tells you.
     13. Morning briefing: what happened overnight, what's coming up, what's changed
     14. Manages your calendar, project management, and priorities
     15. Breaks long-term goals into daily deliverables
     16. You're no longer the to-do list keeper.
     17. Security architecture:
     18. Virtual Private Server (VPS) hosting, not local machines
     19. Two-account system: one for operations, one for immutable backups
     20. All logs are piped to a one-way backup account.
     21. "Go back six hours" restore button, in case things go wrong.
     22. Humans in the loop for critical actions (e.g., agent queues payments, human approves)
     
     

     The biggest investment mistake everyone is making

     To conclude, David talked about the biggest investment mistake everyone is making right now: not appreciating the exponential nature of what we're in and what is coming. He noted that the next 12 months will be unlike any 12 months in business history. He stated that we're entering a recursive self-improvement phase, in which software will write the next generation of itself. The singularity isn't theoretical; it's happening now.

     David's advice is to stop thinking six months ahead. The pace is too fast. Instead:

     1. Take baby steps to position yourself.
     2. Prepare to accelerate like never before
     3. Invest in agent infrastructure now, while it "doesn't suck too bad", it will only get dramatically better.
     
     

     Andrew's takeaways

     1. The transition period is awkward but temporary. Humans and machines must coexist for now, but we're heading toward a world where machines handle most drudge work, freeing humans for higher-level thinking.
     2. API-based agents are safer than screen-scraping. While scraping demonstrates what's possible, it violates Terms of Service and is unsustainable. API integration with guardrails is the professional approach.
     3. Forever memory changes everything. The ability to search through your entire life's conversations and have the agent permanently remember context transforms productivity and decision-making.
     4. Reverse prompting is a paradigm shift. Moving from taskmaster to collaborator—where the agent manages you toward your goals—fundamentally changes how work gets done.
     5. Exponential growth demands immediate action. Waiting to understand everything before starting means missing the wave. Begin with small, safe use cases and expand as capabilities mature.
     
     

     Actionable advice

     1. Start with simple use cases and expand gradually. Don't plan everything up front. Do your calendar, manage birthdays, and track expenses. Each month will reveal new possibilities.
     2. Separate personal from business. Maintain firewall segregation between your personal Chief of Staff and business Chief of Staff. Each business unit can be compartmentalized under the business agent.
     3. Think exponential, not linear. Most people underestimate the velocity of change ahead. Position yourself now to ride the wave rather than chase it later.
     4. Humans in the loop for critical decisions. Agents can research, recommend, and prepare, but major financial commitments should require human approval via text or voice confirmation.
     
     

     No. 1 goal for the next 12 months

     Claw Studio is David's primary focus. Listeners can explore resources at:

     1. com: White-glove OpenClaw installation and configuration
     2. io: Byron and other agent demonstrations
     
     

     David is producing video updates and executive briefings for companies, and a new PDF guide on getting started with OpenClaw is available on the website. To continue with his commitment to holistic performance, David is launching a longevity coaching program in April.

     [spp-transcript]

     Connect with David Siegel

     1. LinkedIn
     2. X
     3. YouTube
     4. Website
     
     

     Andrew’s books

     1. How to Start Building Your Wealth Investing in the Stock Market
     2. My Worst Investment Ever
     3. 9 Valuation Mistakes and How to Avoid Them
     4. Transform Your Business with Dr.Deming’s 14 Points
     
     

     Andrew’s online programs

     1. Valuation Master Class
     2. The Become a Better Investor Community
     3. How to Start Building Your Wealth Investing in the Stock Market
     4. Finance Made Ridiculously Simple
     5. FVMR Investing: Quantamental Investing Across the World
     6. Become a Great Presenter and Increase Your Influence
     7. Transform Your Business with Dr. Deming’s 14 Points
     8. Achieve Your Goals
     
     

     Connect with Andrew Stotz:

     1. astotz.com
     2. LinkedIn
     3. Facebook
     4. Instagram
     5. Threads
     6. X
     7. YouTube
     8. My Worst Investment Ever Podcast
     
     ]]>40311b64-44cf-490a-8cd2-5b2a8598eca0Tue, 24 Mar 2026 06:00:00 +070049:32falsefullAthena Brownson – What Happens When Trust Replaces Due DiligenceBIO: Athena Brownson is a Denver realtor, investor, developer, and former professional skier whose resilience through chronic illness fuels her refined, strategic, and client-focused approach to real estate.

     STORY: Athena lost $130,000 in her first development project when a builder she considered a friend vanished with the upfront funds. Her trust and incomplete due diligence led to a total loss, teaching her that personal relationships can create dangerous blind spots in business.

     LEARNING: Due diligence is non-negotiable. Trust is a liability.

     “A simple conversation with someone that we know, like, and trust is invaluable, because they can point out to us the blind spots that we may have missed in our excitement.”

     Athena Brownson

     Guest profile

     Athena Brownson is a Denver realtor, investor, developer, and former professional skier whose resilience through chronic illness fuels her refined, strategic, and client-focused approach to real estate.

     Worst investment ever

     Athena Brownson entered her first development project with confidence and a seemingly dream team. With a 45-year veteran developer—her father—by her side, she felt prepared. She had saved diligently, owned the land, and chose a builder she’d known for three years, a dear friend’s business partner.

     After multiple interviews where her father asked all the right questions, they felt secure. They signed a contract and paid $130,000 upfront for site clearing, asbestos abatement, and foundation work.

     Initial excitement turned to unease as progress was glacial. A blue fence went up, and some abatement started, but then communication stopped. Phone lines went dead. Subcontractors began calling Athena directly, asking why they hadn’t been paid.

     The devastating truth emerged: the builder had vanished with the funds. Athena later discovered she was one of eight victims of the same scam. Despite her real estate expertise and her father’s decades of experience, they had been outmaneuvered by a trusted contact.

     Lessons learned

     1. Due diligence is non-negotiable: Trust is not a replacement for verification. Athena’s key takeaway was the need for exhaustive due diligence: calling not just a few references, but a comprehensive list of past and current clients to hear the unfiltered story of their experiences.
     2. Friendship clouds judgment: A personal connection created a dangerous blind spot. It made her and her experienced team less likely to probe aggressively or assume the worst, a bias scammers often exploit.
     3. Assume the worst, hope for the best: The mindset must shift from “I trust you until you prove me wrong” to “Show me consistent, verifiable proof that you are trustworthy.” In business, healthy skepticism is a necessary form of self-defense.
     4. Measure twice, cut once: This adage applies to money and contracts. Double and triple-check every detail, every claim, and every line item before funds change hands.
     
     

     Andrew’s takeaways

     1. Money is life energy: Andrew referenced the classic book Your Money or Your Life, emphasizing that money represents hours of your life traded for it. Guarding it fiercely is an act of self-preservation.
     2. Trust is a liability: Stories like Athena’s and others show that misplaced trust is a common thread in catastrophic losses. Systems and verification must replace blind faith.
     3. Seek counsel, not confirmation: When making big decisions, actively seek advisors who will challenge you and point out blind spots, not just those who will validate your excitement.
     
     

     Actionable advice

     Athena advises investors to do these three things when vetting any partner:

     1. Demand a list of 10 past and current clients/vendors and call them all. Don’t settle for 2-3 curated references. Ask specific questions about communication, budgeting, and problem-solving.
     2. Before major investments, formally run the deal by a small group of mentors or experienced peers whose explicit role is to find flaws and ask the tough questions you might be avoiding.
     3. Impose a mandatory 48-72 hour “cooling-off” period between agreeing to a deal and signing or funding. Use that time to conduct the extra due diligence that your initial excitement may have skipped.
     
     

     Athena’s recommendations

     Athena’s number one recommendation is to invest in mentorship and continuous education. Whether through formal coaching, podcasts, masterclasses, or peer groups, constantly feed your knowledge.

     She advocates for finding a community that provides both accountability and the ability to see your own blind spots, which are invisible to you alone. For her, this approach, ingrained from her athletic career, is pivotal for professional growth and risk mitigation.

     No. 1 goal for the next 12 months

     Athena’s number one goal for the next 12 months is to deepen her impact by building a powerful, trusted referral network. She aims to serve more clients in building long-term wealth through strategic real estate and to expand her team. A core part of this mission is to pay forward the mentorship she received by guiding younger agents, helping them avoid the costly pitfalls she endured.

     Parting words

     “Don’t make rash decisions. Take your time and know that the right thing is going to come into place at the right time.”

     Athena Brownson

     [spp-transcript]

     Connect with Athena Brownson

     1. LinkedIn
     2. Instagram
     3. YouTube
     
     

     Andrew’s books

     1. How to Start Building Your Wealth Investing in the Stock Market
     2. My Worst Investment Ever
     3. 9 Valuation Mistakes and How to Avoid Them
     4. Transform Your Business with Dr.Deming’s 14 Points
     
     

     Andrew’s online programs

     1. Valuation Master Class
     2. The Become a Better Investor Community
     3. How to Start Building Your Wealth Investing in the Stock Market
     4. Finance Made Ridiculously Simple
     5. FVMR Investing: Quantamental Investing Across the World
     6. Become a Great Presenter and Increase Your Influence
     7. BIO: Athena Brownson is a Denver realtor, investor, developer, and former professional skier whose resilience through chronic illness fuels her refined, strategic, and client-focused approach to real estate.

        STORY: Athena lost $130,000 in her first development project when a builder she considered a friend vanished with the upfront funds. Her trust and incomplete due diligence led to a total loss, teaching her that personal relationships can create dangerous blind spots in business.

        LEARNING: Due diligence is non-negotiable. Trust is a liability.

        “A simple conversation with someone that we know, like, and trust is invaluable, because they can point out to us the blind spots that we may have missed in our excitement.”

        Athena Brownson

        Guest profile

        Athena Brownson is a Denver realtor, investor, developer, and former professional skier whose resilience through chronic illness fuels her refined, strategic, and client-focused approach to real estate.

        Worst investment ever

        Athena Brownson entered her first development project with confidence and a seemingly dream team. With a 45-year veteran developer—her father—by her side, she felt prepared. She had saved diligently, owned the land, and chose a builder she’d known for three years, a dear friend’s business partner.

        After multiple interviews where her father asked all the right questions, they felt secure. They signed a contract and paid $130,000 upfront for site clearing, asbestos abatement, and foundation work.

        Initial excitement turned to unease as progress was glacial. A blue fence went up, and some abatement started, but then communication stopped. Phone lines went dead. Subcontractors began calling Athena directly, asking why they hadn’t been paid.

        The devastating truth emerged: the builder had vanished with the funds. Athena later discovered she was one of eight victims of the same scam. Despite her real estate expertise and her father’s decades of experience, they had been outmaneuvered by a trusted contact.

        Lessons learned

        1. Due diligence is non-negotiable: Trust is not a replacement for verification. Athena’s key takeaway was the need for exhaustive due diligence: calling not just a few references, but a comprehensive list of past and current clients to hear the unfiltered story of their experiences.
        2. Friendship clouds judgment: A personal connection created a dangerous blind spot. It made her and her experienced team less likely to probe aggressively or assume the worst, a bias scammers often exploit.
        3. Assume the worst, hope for the best: The mindset must shift from “I trust you until you prove me wrong” to “Show me consistent, verifiable proof that you are trustworthy.” In business, healthy skepticism is a necessary form of self-defense.
        4. Measure twice, cut once: This adage applies to money and contracts. Double and triple-check every detail, every claim, and every line item before funds change hands.
        
        

        Andrew’s takeaways

        1. Money is life energy: Andrew referenced the classic book Your Money or Your Life, emphasizing that money represents hours of your life traded for it. Guarding it fiercely is an act of self-preservation.
        2. Trust is a liability: Stories like Athena’s and others show that misplaced trust is a common thread in catastrophic losses. Systems and verification must replace blind faith.
        3. Seek counsel, not confirmation: When making big decisions, actively seek advisors who will challenge you and point out blind spots, not just those who will validate your excitement.
        
        

        Actionable advice

        Athena advises investors to do these three things when vetting any partner:

        1. Demand a list of 10 past and current clients/vendors and call them all. Don’t settle for 2-3 curated references. Ask specific questions about communication, budgeting, and problem-solving.
        2. Before major investments, formally run the deal by a small group of mentors or experienced peers whose explicit role is to find flaws and ask the tough questions you might be avoiding.
        3. Impose a mandatory 48-72 hour “cooling-off” period between agreeing to a deal and signing or funding. Use that time to conduct the extra due diligence that your initial excitement may have skipped.
        
        

        Athena’s recommendations

        Athena’s number one recommendation is to invest in mentorship and continuous education. Whether through formal coaching, podcasts, masterclasses, or peer groups, constantly feed your knowledge.

        She advocates for finding a community that provides both accountability and the ability to see your own blind spots, which are invisible to you alone. For her, this approach, ingrained from her athletic career, is pivotal for professional growth and risk mitigation.

        No. 1 goal for the next 12 months

        Athena’s number one goal for the next 12 months is to deepen her impact by building a powerful, trusted referral network. She aims to serve more clients in building long-term wealth through strategic real estate and to expand her team. A core part of this mission is to pay forward the mentorship she received by guiding younger agents, helping them avoid the costly pitfalls she endured.

        Parting words

        “Don’t make rash decisions. Take your time and know that the right thing is going to come into place at the right time.”

        Athena Brownson

        [spp-transcript]

        Connect with Athena Brownson

        1. LinkedIn
        2. Instagram
        3. YouTube
        
        

        Andrew’s books

        1. How to Start Building Your Wealth Investing in the Stock Market
        2. My Worst Investment Ever
        3. 9 Valuation Mistakes and How to Avoid Them
        4. Transform Your Business with Dr.Deming’s 14 Points
        
        

        Andrew’s online programs

        1. Valuation Master Class
        2. The Become a Better Investor Community
        3. How to Start Building Your Wealth Investing in the Stock Market
        4. Finance Made Ridiculously Simple
        5. FVMR Investing: Quantamental Investing Across the World
        6. Become a Great Presenter and Increase Your Influence
        7. Transform Your Business with Dr. Deming’s 14 Points
        8. Achieve Your Goals
        
        

        Connect with Andrew Stotz:

        1. astotz.com
        2. LinkedIn
        3. Facebook
        4. Instagram
        5. Threads
        6. X
        7. YouTube
        8. My Worst Investment Ever Podcast
        
        ]]>52892805-6bd2-4e68-a41b-a325a963e1fbTue, 03 Feb 2026 06:00:00 +070031:56falsefullJon Ostenson – Top 10 Franchise Opportunities for 2026BIO: Jon is the Founder and CEO of FranBridge Consulting, a 2-time Inc. 5000 company, and a leading franchise consultant.

        STORY: Jon believes franchising remains one of the most effective ways to build durable income, especially when investors focus on operational discipline and unit economics. He shares his top franchise categories for 2026.

        LEARNING: Look for businesses with repeat customers, operational discipline, proven unit economics, and leadership teams that have already made their mistakes.

        Guest profile

        Jon Ostenson is the Founder and CEO of FranBridge Consulting, a 2-time Inc. 5000 company, and he is a top 1% franchise consultant. Jon is also the author of the bestselling book, Non-Food Franchising. Jon draws on his experience as a former Inc. 500 Franchise President and Multi-Brand Franchisee in helping his clients select their franchise investments.

        For many aspiring business owners, the biggest financial losses don't come from bad intentions. They come from underestimating complexity, overestimating scalability, or betting everything on an unproven idea. Jon Ostenson knows this lesson intimately.

        As the founder and CEO of FranBridge Consulting and franchise consultant, Jon has spent years helping entrepreneurs shortcut costly mistakes by investing in proven, non-food franchise models.

        In Episode 815: I Built a Million-Dollar Business That Never Made a Profit, he openly shared how he once built a million-dollar business that never made a profit. That experience now informs how he evaluates opportunities with discipline, structure, and risk control.

        Looking ahead to 2026, Jon believes franchising remains one of the most effective ways to build a durable income stream, especially when investors focus on operational discipline and unit economics. Below are his top franchise categories for 2026, and more importantly, why they help investors avoid the common traps that sink new businesses.

        Why Franchising Can Help Investors Avoid Big Mistakes

        One of the most common investment errors is assuming passion alone will overcome operational complexity. Many entrepreneurs love an idea but underestimate the systems, staffing, pricing discipline, and capital required to make it profitable.

        Franchising addresses this risk by offering something rare: a business model with historical data. Instead of guessing whether pricing works or whether customers will pay, franchisees can examine real-world performance, talk to existing owners, and follow systems that have already survived market cycles, helping investors feel confident in demand-driven, structured opportunities.

        Jon emphasizes that franchising is not about eliminating risk. It's about trading unbounded risk for structured risk, supported by systems, training, and benchmarks.

        1. Cost Mitigation Consulting: Profits Without Payroll

        Cost-mitigation franchises help small and medium-sized businesses reduce expenses by analyzing vendor contracts, utility bills, shipping costs, and other fees. Clients pay nothing up front and instead share a percentage of the savings.

        What makes this model compelling is its simplicity. There's no inventory, no employees required, and no large infrastructure investment. Franchisees focus on business-to-business sales while the franchisor provides analytical support and benchmarking tools.

        From an investment standpoint, this avoids two common mistakes: high fixed costs and overstaffing before revenue stabilizes.

        2. Freight Brokerage: Leveraging Collective Buying Power

        Shipping costs remain a pain point for businesses, and freight brokerage franchises sit neatly between companies and major carriers like UPS, FedEx, and DHL.

        Rather than competing on price alone, franchisees act as trusted advisors, simplifying logistics and negotiating better rates using collective buying power. Technology and systems are already in place, preventing the trial-and-error phase that sinks many startups.

        This model rewards consultative selling skills while insulating owners from volatile commodity pricing.

        3. Digital Billboard Advertising: Recurring Local Revenue

        Digital billboard franchises install advertising screens in high-traffic locations such as medical offices, oil change centers, and waiting rooms. The screens are free for host businesses, while advertisers pay for exposure.

        The appeal here lies in predictable recurring revenue and minimal staffing. Franchisees sell local advertising while the franchisor handles content delivery, technology, and procurement.

        It's a classic example of monetizing attention without carrying inventory or managing complex operations.

        4. Senior Fitness and Stretching Services: Demographics at Work

        With thousands of Americans turning 65 every day, senior-focused services remain one of the strongest secular growth trends. One franchise Jon highlights provides on-site stretching and fitness programs inside senior living communities.

        Revenue is recurring, demand is non-discretionary, and the business directly improves quality of life. For investors, this reduces reliance on consumer whims and economic cycles.

        5. Home Mobility Solutions: Aging in Place Is the Future

        Another senior-focused opportunity involves installing wheelchair ramps, stair lifts, and bathroom modifications to help seniors stay in their homes longer.

        Jon favors this franchise because the leadership team brings decades of industry experience, and market demand is structural rather than trendy. These services align closely with healthcare, reverse mortgages, and long-term aging trends.

        For investors, it's a reminder that boring, needs-based businesses often outperform exciting ideas.

        6. Pilates Studios: Premium Wellness With Predictable Revenue

        Pilates franchises continue to stand out as one of the strongest performers in the wellness space heading into 2026. Unlike trend-driven fitness concepts, Pilates benefits from longevity, broad demographic appeal, and a reputation for low-impact, high-value results. Clients range from young professionals to older adults focused on mobility, posture, and injury prevention.

        What makes this model attractive from an investment perspective is its membership-based recurring revenue and disciplined unit economics. Franchise systems have refined pricing, instructor certification, class capacity, and studio layout to maximise margins while maintaining quality. Jon highlights that these brands succeed not because fitness is exciting, but because their business models are structured, repeatable, and proven across multiple markets.

        For investors looking to avoid the mistake of underestimating operating complexity, Pilates franchises offer a clear framework for scaling without reinventing the wheel.

        7. Recovery and Wellness Studios: Riding the Longevity Economy

        Recovery-focused wellness franchises are another category Jon believes will accelerate into 2026. These studios offer services such as cold plunges, infrared saunas, cryotherapy, compression therapy, and contrast bathing, all designed to support recovery, performance, and long-term health.

        Unlike traditional spas, these franchises position themselves as ongoing wellness memberships rather than one-off luxury visits. Customers come weekly, sometimes multiple times per week, creating predictable cash flow and strong client retention. Demand is driven by athletes, busy professionals, and aging consumers who prioritise longevity and preventative health.

        From an investment standpoint, these franchises succeed when operators follow disciplined rollout plans, resist overbuilding too quickly, and rely on franchisor-tested marketing and pricing strategies. Jon notes that many independent wellness studios fail not because the demand isn't there, but because owners misjudge costs, staffing, or market readiness, mistakes that strong franchise systems are designed to prevent.

        8. Music Education Studios: Community-Based Recurring Income

        Music lesson franchises create centralized spaces where instructors teach children and adults under a standardized curriculum. Parents are willing to invest in their children regardless of economic conditions, making this category resilient.

        The franchise advantage lies in marketing systems, scheduling technology, and curriculum design. Owners focus on community engagement rather than building everything from scratch.

        9. Teen Driving Schools: Regulation Meets Opportunity

        In many US states, formal driver education is required for teens to obtain a driver's license. Yet the market remains fragmented and unsophisticated.

        Franchised teen driving schools offer standardized training, vetted instructors, and strong brand trust. For parents, safety matters. For investors, regulation-backed demand provides stability.

        10. Property Services: Flooring and Junk Hauling Reinvented

        Jon closes his list with two property services franchises that stand out due to operational innovation. One refinishes hardwood floors in a single day without sanding. The other reimagines junk hauling by charging by...]]>BIO: Jon is the Founder and CEO of FranBridge Consulting, a 2-time Inc. 5000 company, and a leading franchise consultant.

        STORY: Jon believes franchising remains one of the most effective ways to build durable income, especially when investors focus on operational discipline and unit economics. He shares his top franchise categories for 2026.

        LEARNING: Look for businesses with repeat customers, operational discipline, proven unit economics, and leadership teams that have already made their mistakes.

        Guest profile

        Jon Ostenson is the Founder and CEO of FranBridge Consulting, a 2-time Inc. 5000 company, and he is a top 1% franchise consultant. Jon is also the author of the bestselling book, Non-Food Franchising. Jon draws on his experience as a former Inc. 500 Franchise President and Multi-Brand Franchisee in helping his clients select their franchise investments.

        For many aspiring business owners, the biggest financial losses don't come from bad intentions. They come from underestimating complexity, overestimating scalability, or betting everything on an unproven idea. Jon Ostenson knows this lesson intimately.

        As the founder and CEO of FranBridge Consulting and franchise consultant, Jon has spent years helping entrepreneurs shortcut costly mistakes by investing in proven, non-food franchise models.

        In Episode 815: I Built a Million-Dollar Business That Never Made a Profit, he openly shared how he once built a million-dollar business that never made a profit. That experience now informs how he evaluates opportunities with discipline, structure, and risk control.

        Looking ahead to 2026, Jon believes franchising remains one of the most effective ways to build a durable income stream, especially when investors focus on operational discipline and unit economics. Below are his top franchise categories for 2026, and more importantly, why they help investors avoid the common traps that sink new businesses.

        Why Franchising Can Help Investors Avoid Big Mistakes

        One of the most common investment errors is assuming passion alone will overcome operational complexity. Many entrepreneurs love an idea but underestimate the systems, staffing, pricing discipline, and capital required to make it profitable.

        Franchising addresses this risk by offering something rare: a business model with historical data. Instead of guessing whether pricing works or whether customers will pay, franchisees can examine real-world performance, talk to existing owners, and follow systems that have already survived market cycles, helping investors feel confident in demand-driven, structured opportunities.

        Jon emphasizes that franchising is not about eliminating risk. It's about trading unbounded risk for structured risk, supported by systems, training, and benchmarks.

        1. Cost Mitigation Consulting: Profits Without Payroll

        Cost-mitigation franchises help small and medium-sized businesses reduce expenses by analyzing vendor contracts, utility bills, shipping costs, and other fees. Clients pay nothing up front and instead share a percentage of the savings.

        What makes this model compelling is its simplicity. There's no inventory, no employees required, and no large infrastructure investment. Franchisees focus on business-to-business sales while the franchisor provides analytical support and benchmarking tools.

        From an investment standpoint, this avoids two common mistakes: high fixed costs and overstaffing before revenue stabilizes.

        2. Freight Brokerage: Leveraging Collective Buying Power

        Shipping costs remain a pain point for businesses, and freight brokerage franchises sit neatly between companies and major carriers like UPS, FedEx, and DHL.

        Rather than competing on price alone, franchisees act as trusted advisors, simplifying logistics and negotiating better rates using collective buying power. Technology and systems are already in place, preventing the trial-and-error phase that sinks many startups.

        This model rewards consultative selling skills while insulating owners from volatile commodity pricing.

        3. Digital Billboard Advertising: Recurring Local Revenue

        Digital billboard franchises install advertising screens in high-traffic locations such as medical offices, oil change centers, and waiting rooms. The screens are free for host businesses, while advertisers pay for exposure.

        The appeal here lies in predictable recurring revenue and minimal staffing. Franchisees sell local advertising while the franchisor handles content delivery, technology, and procurement.

        It's a classic example of monetizing attention without carrying inventory or managing complex operations.

        4. Senior Fitness and Stretching Services: Demographics at Work

        With thousands of Americans turning 65 every day, senior-focused services remain one of the strongest secular growth trends. One franchise Jon highlights provides on-site stretching and fitness programs inside senior living communities.

        Revenue is recurring, demand is non-discretionary, and the business directly improves quality of life. For investors, this reduces reliance on consumer whims and economic cycles.

        5. Home Mobility Solutions: Aging in Place Is the Future

        Another senior-focused opportunity involves installing wheelchair ramps, stair lifts, and bathroom modifications to help seniors stay in their homes longer.

        Jon favors this franchise because the leadership team brings decades of industry experience, and market demand is structural rather than trendy. These services align closely with healthcare, reverse mortgages, and long-term aging trends.

        For investors, it's a reminder that boring, needs-based businesses often outperform exciting ideas.

        6. Pilates Studios: Premium Wellness With Predictable Revenue

        Pilates franchises continue to stand out as one of the strongest performers in the wellness space heading into 2026. Unlike trend-driven fitness concepts, Pilates benefits from longevity, broad demographic appeal, and a reputation for low-impact, high-value results. Clients range from young professionals to older adults focused on mobility, posture, and injury prevention.

        What makes this model attractive from an investment perspective is its membership-based recurring revenue and disciplined unit economics. Franchise systems have refined pricing, instructor certification, class capacity, and studio layout to maximise margins while maintaining quality. Jon highlights that these brands succeed not because fitness is exciting, but because their business models are structured, repeatable, and proven across multiple markets.

        For investors looking to avoid the mistake of underestimating operating complexity, Pilates franchises offer a clear framework for scaling without reinventing the wheel.

        7. Recovery and Wellness Studios: Riding the Longevity Economy

        Recovery-focused wellness franchises are another category Jon believes will accelerate into 2026. These studios offer services such as cold plunges, infrared saunas, cryotherapy, compression therapy, and contrast bathing, all designed to support recovery, performance, and long-term health.

        Unlike traditional spas, these franchises position themselves as ongoing wellness memberships rather than one-off luxury visits. Customers come weekly, sometimes multiple times per week, creating predictable cash flow and strong client retention. Demand is driven by athletes, busy professionals, and aging consumers who prioritise longevity and preventative health.

        From an investment standpoint, these franchises succeed when operators follow disciplined rollout plans, resist overbuilding too quickly, and rely on franchisor-tested marketing and pricing strategies. Jon notes that many independent wellness studios fail not because the demand isn't there, but because owners misjudge costs, staffing, or market readiness, mistakes that strong franchise systems are designed to prevent.

        8. Music Education Studios: Community-Based Recurring Income

        Music lesson franchises create centralized spaces where instructors teach children and adults under a standardized curriculum. Parents are willing to invest in their children regardless of economic conditions, making this category resilient.

        The franchise advantage lies in marketing systems, scheduling technology, and curriculum design. Owners focus on community engagement rather than building everything from scratch.

        9. Teen Driving Schools: Regulation Meets Opportunity

        In many US states, formal driver education is required for teens to obtain a driver's license. Yet the market remains fragmented and unsophisticated.

        Franchised teen driving schools offer standardized training, vetted instructors, and strong brand trust. For parents, safety matters. For investors, regulation-backed demand provides stability.

        10. Property Services: Flooring and Junk Hauling Reinvented

        Jon closes his list with two property services franchises that stand out due to operational innovation. One refinishes hardwood floors in a single day without sanding. The other reimagines junk hauling by charging by weight rather than volume, dramatically improving margins.

        These businesses benefit from strong cash flow, fragmented competition, and clear differentiation. They also attract private equity interest, which supports higher exit multiples down the road.

        The Bigger Lesson: Avoiding the Same Investment Mistakes

        Across all ten opportunities, Jon's philosophy is consistent:

        1. Don't chase novelty.
        2. Don't underestimate complexity.
        3. Don't assume growth equals profit.
        
        

        Instead, look for businesses with repeat customers, operational discipline, proven unit economics, and leadership teams that have already made their mistakes.

        Franchising doesn't guarantee success, but it dramatically improves the odds by replacing guesswork with structure.

        Final Thought

        If there's one lesson Jon Ostenson's journey reinforces, it's this: the most expensive investment mistakes usually come from building alone. Learning from others' failures, using proven systems, and choosing businesses with real demand can mean the difference between surviving and thriving in 2026 and beyond.

        [spp-transcript]

        Connect with Jon Ostenson

        1. LinkedIn
        2. X
        3. Facebook
        4. YouTube
        5. Book
        6. Website
        
        

        Andrew’s books

        1. How to Start Building Your Wealth Investing in the Stock Market
        2. My Worst Investment Ever
        3. 9 Valuation Mistakes and How to Avoid Them
        4. Transform Your Business with Dr.Deming’s 14 Points
        
        

        Andrew’s online programs

        1. Valuation Master Class
        2. The Become a Better Investor Community
        3. How to Start Building Your Wealth Investing in the Stock Market
        4. Finance Made Ridiculously Simple
        5. FVMR Investing: Quantamental Investing Across the World
        6. Become a Great Presenter and Increase Your Influence
        7. Transform Your Business with Dr. Deming’s 14 Points
        8. Achieve Your Goals
        
        

        Connect with Andrew Stotz:

        1. astotz.com
        2. LinkedIn
        3. Facebook
        4. Instagram
        5. Threads
        6. X
        7. YouTube
        8. My Worst Investment Ever Podcast
        
        ]]>ddf0f809-87a2-4072-b51d-e78f8684e265Tue, 20 Jan 2026 06:00:00 +070040:42falsefullDavid Siegel – A Smart Idea Nobody WantedBIO: David Siegel is a Silicon Valley entrepreneur who has founded more than a dozen companies. He has written five books on technology and business, was once a candidate for the dean of Stanford Business School, and is now an AI thought leader leading an AI startup he hopes will pave the way for the agentic economy.

        STORY: David invested heavily in launching a longevity coaching business, believing people would pay to extend their lives through lifestyle change. Despite strong science, personal results, and significant marketing spend, demand proved nearly nonexistent.

        LEARNING: A great idea without real demand is still a bad investment.

        “There will be many new problems, and whenever there are new problems, there’s a new economic opportunity for many people.”

        David Siegel

        Guest profile

        David Siegel is a Silicon Valley entrepreneur who has founded more than a dozen companies. He has written five books on technology and business, was once a candidate for the dean of Stanford Business School, and is now an AI thought leader leading an AI startup he hopes will pave the way for the agentic economy.

        Worst investment ever

        After years of building companies and studying major technological shifts, David found himself pulled deeply into the longevity movement. This wasn’t casual curiosity. He read more than 20 books, radically transformed his lifestyle, and developed a deep understanding of insulin resistance, nutrition, exercise, and long-term health.

        The results were personal and visible. David was fit, disciplined, and energized. The idea that science could help people live 10 to 15 years longer, with a higher quality of life, felt not only possible but urgent. Helping others do the same seemed like a natural next chapter.

        Turning passion into a business

        Confident in both the science and his own experience, David decided to turn longevity coaching into a scalable business. His target audience was people in their 50s and 60s, individuals who were pre-diabetic or heading toward serious health issues and stood to benefit the most from early intervention.

        He approached the venture like a seasoned entrepreneur. He built funnels, ran Facebook ads, spoke at retirement communities, and spent months on discovery calls explaining how lifestyle changes could dramatically reduce the risk of cancer, Alzheimer’s, and diabetes.

        This wasn’t guesswork; it was disciplined execution.

        The painful reality check

        Then reality set in.

        Despite spending over $100,000 on advertising and investing countless hours in conversations, demand was almost nonexistent. People listened. They nodded. They agreed the logic made sense. Then they walked away.

        Many believed the healthcare system would save them. Others hoped for a pill instead of discipline. Even those clearly facing insulin resistance weren’t willing to make sustained lifestyle changes.

        The most sobering realization wasn’t about marketing or pricing. It was this: most people don’t actually want to live longer if it requires consistent effort.

        Accepting the loss

        In the end, only about one percent of the people David spoke to were already doing the work and didn’t need coaching. Everyone else opted out, fully aware of the consequences.

        The investment failed not because the science was wrong, but because the market wasn’t there. David ultimately gave the information away for free and walked away from the business, having learned an expensive but clarifying lesson about belief versus demand.

        Lessons learned

        1. Even the most compelling solution will fail if it requires behavior that people are unwilling to change.
        2. Logic, evidence, and outcomes don’t matter if the market emotionally resists effort.
        3. A great idea without real demand is still a bad investment.
        
        

        Andrew’s takeaways

        1. Andrew highlights that people consistently search for shortcuts rather than long-term solutions. Whether in health or investing, most people prefer convenience over discipline, even when the stakes are life-altering.
        
        

        Actionable advice

        Before scaling any idea, test for real demand, not polite interest. Ask whether people are willing to pay, change their habits, and put in effort. If behavior change is central to your offering, validate that reality early or risk learning the hard way.

        David’s recommendations

        David encourages understanding your own health data, particularly insulin resistance, through proper testing, such as an oral glucose tolerance test. While the business failed, the knowledge remains powerful and freely available for those willing to act.

        Parting words

        “Keep looking for new problems that didn’t exist six months ago and jump in after them.”

        David Siegel

        [spp-transcript]

        Connect with David Siegel

        1. LinkedIn
        2. X
        3. YouTube
        4. Website
        
        

        Andrew’s books

        1. How to Start Building Your Wealth Investing in the Stock Market
        2. My Worst Investment Ever
        3. 9 Valuation Mistakes and How to Avoid Them
        4. Transform Your Business with Dr.Deming’s 14 Points
        
        

        Andrew’s online programs

        1. Valuation Master Class
        2. The Become a Better Investor Community
        3. How to Start Building Your Wealth Investing in the Stock Market
        4. Finance Made Ridiculously Simple
        5. FVMR Investing: Quantamental Investing Across the World
        6. Become a Great Presenter and Increase Your Influence
        7. Transform Your Business with Dr. Deming’s 14 Points
        8. Achieve Your Goals
        
        

        Connect with Andrew Stotz:

        1. astotz.com
        2. LinkedIn
        3. Facebook
        BIO: David Siegel is a Silicon Valley entrepreneur who has founded more than a dozen companies. He has written five books on technology and business, was once a candidate for the dean of Stanford Business School, and is now an AI thought leader leading an AI startup he hopes will pave the way for the agentic economy.

        STORY: David invested heavily in launching a longevity coaching business, believing people would pay to extend their lives through lifestyle change. Despite strong science, personal results, and significant marketing spend, demand proved nearly nonexistent.

        LEARNING: A great idea without real demand is still a bad investment.

        “There will be many new problems, and whenever there are new problems, there’s a new economic opportunity for many people.”

        David Siegel

        Guest profile

        David Siegel is a Silicon Valley entrepreneur who has founded more than a dozen companies. He has written five books on technology and business, was once a candidate for the dean of Stanford Business School, and is now an AI thought leader leading an AI startup he hopes will pave the way for the agentic economy.

        Worst investment ever

        After years of building companies and studying major technological shifts, David found himself pulled deeply into the longevity movement. This wasn’t casual curiosity. He read more than 20 books, radically transformed his lifestyle, and developed a deep understanding of insulin resistance, nutrition, exercise, and long-term health.

        The results were personal and visible. David was fit, disciplined, and energized. The idea that science could help people live 10 to 15 years longer, with a higher quality of life, felt not only possible but urgent. Helping others do the same seemed like a natural next chapter.

        Turning passion into a business

        Confident in both the science and his own experience, David decided to turn longevity coaching into a scalable business. His target audience was people in their 50s and 60s, individuals who were pre-diabetic or heading toward serious health issues and stood to benefit the most from early intervention.

        He approached the venture like a seasoned entrepreneur. He built funnels, ran Facebook ads, spoke at retirement communities, and spent months on discovery calls explaining how lifestyle changes could dramatically reduce the risk of cancer, Alzheimer’s, and diabetes.

        This wasn’t guesswork; it was disciplined execution.

        The painful reality check

        Then reality set in.

        Despite spending over $100,000 on advertising and investing countless hours in conversations, demand was almost nonexistent. People listened. They nodded. They agreed the logic made sense. Then they walked away.

        Many believed the healthcare system would save them. Others hoped for a pill instead of discipline. Even those clearly facing insulin resistance weren’t willing to make sustained lifestyle changes.

        The most sobering realization wasn’t about marketing or pricing. It was this: most people don’t actually want to live longer if it requires consistent effort.

        Accepting the loss

        In the end, only about one percent of the people David spoke to were already doing the work and didn’t need coaching. Everyone else opted out, fully aware of the consequences.

        The investment failed not because the science was wrong, but because the market wasn’t there. David ultimately gave the information away for free and walked away from the business, having learned an expensive but clarifying lesson about belief versus demand.

        Lessons learned

        1. Even the most compelling solution will fail if it requires behavior that people are unwilling to change.
        2. Logic, evidence, and outcomes don’t matter if the market emotionally resists effort.
        3. A great idea without real demand is still a bad investment.
        
        

        Andrew’s takeaways

        1. Andrew highlights that people consistently search for shortcuts rather than long-term solutions. Whether in health or investing, most people prefer convenience over discipline, even when the stakes are life-altering.
        
        

        Actionable advice

        Before scaling any idea, test for real demand, not polite interest. Ask whether people are willing to pay, change their habits, and put in effort. If behavior change is central to your offering, validate that reality early or risk learning the hard way.

        David’s recommendations

        David encourages understanding your own health data, particularly insulin resistance, through proper testing, such as an oral glucose tolerance test. While the business failed, the knowledge remains powerful and freely available for those willing to act.

        Parting words

        “Keep looking for new problems that didn’t exist six months ago and jump in after them.”

        David Siegel

        [spp-transcript]

        Connect with David Siegel

        1. LinkedIn
        2. X
        3. YouTube
        4. Website
        
        

        Andrew’s books

        1. How to Start Building Your Wealth Investing in the Stock Market
        2. My Worst Investment Ever
        3. 9 Valuation Mistakes and How to Avoid Them
        4. Transform Your Business with Dr.Deming’s 14 Points
        
        

        Andrew’s online programs

        1. Valuation Master Class
        2. The Become a Better Investor Community
        3. How to Start Building Your Wealth Investing in the Stock Market
        4. Finance Made Ridiculously Simple
        5. FVMR Investing: Quantamental Investing Across the World
        6. Become a Great Presenter and Increase Your Influence
        7. Transform Your Business with Dr. Deming’s 14 Points
        8. Achieve Your Goals
        
        

        Connect with Andrew Stotz:

        1. astotz.com
        2. LinkedIn
        3. Facebook
        4. Instagram
        5. Threads
        6. X
        7. YouTube
        8. My Worst Investment Ever Podcast
        
        ]]>10cc0d56-b786-4442-a3fe-65010934cf39Tue, 06 Jan 2026 06:00:00 +070048:29falsefullJon Ostenson – I Built a Million-Dollar Business That Never Made a ProfitBIO: Jon is the Founder and CEO of FranBridge Consulting, a 2-time Inc. 5000 company, and he is a top 1% franchise consultant.

        STORY: Jon co-founded a marketing and call-center business that appeared successful on the surface, growing to millions in revenue and dozens of employees. However, excessive customization and an inability to charge prices that matched rising costs meant the business never became sustainably profitable.

        LEARNING: Profitability is oxygen. Knowing when to admit you’re wrong matters just as much as knowing how to start.

        “Humble yourself and admit when you’re wrong, course correct, and pivot.”

        Jon Ostenson

        Guest profile

        Jon Ostenson is the Founder and CEO of FranBridge Consulting, a 2-time Inc. 5000 company, and he is a top 1% franchise consultant. Jon is also the author of the bestselling book, Non-Food Franchising. Jon draws on his experience as a former Inc. 500 Franchise President and Multi-Brand Franchisee in helping his clients select their franchise investments.

        Worst investment ever

        Leaving the corporate world felt like freedom. After years of structure, predictability, and steady paychecks, you finally get to build something of your own. That was precisely where Jon found himself: grateful for his corporate experience, energized by the idea of business ownership, and eager to prove he could create something meaningful on his own terms.

        A promising partnership and a compelling business vision

        Shortly after leaving corporate life, Jon partnered with a colleague to launch a marketing and sales company. He owned 60 percent of the business and ran day-to-day operations, while his partner held the remaining 40 percent.

        The vision was compelling. The company would help franchise businesses grow by handling their marketing, answering inbound calls through an in-house call center, and booking appointments directly for clients. The promise was simple: make the phones ring and convert those calls into revenue.

        Early momentum and the illusion of success

        At first, it worked. The business grew quickly, attracting a strong leadership team and building a culture Jon was proud of. With around 35 employees and annual revenues of $3 million to $4 million, the company appeared successful from the outside. The team was energized, clients were signing on, and the pace was exciting.

        When growth didn’t translate into profit

        But beneath the surface, there was a quiet, persistent problem.

        The business wasn’t profitable.

        Despite all the effort, the long hours, and the constant tweaking, the company hovered around breakeven. Some months it lost money. Others it barely scraped by. Payroll was always looming, and profitability felt just out of reach. Jon tried adjusting pricing, shifting emphasis between marketing and call center services, and introducing new technology to increase value.

        But every fix only delayed the inevitable question he didn’t want to answer: What if the model itself was broken?

        The hidden cost of customization and complexity

        The core issue turned out to be customization. The business was designed to scale by serving franchise systems with repeatable processes. Instead, each franchisee insisted their market was different, their staff was unique, and their customers required special handling. Wanting to please early clients and drive revenue, Jon said yes. Again and again.

        Over time, the company became highly customized, operationally complex, and increasingly expensive to run. Pricing no longer matched costs. The more the business grew, the harder it became to make money. What looked like top-line success was masking a model that couldn’t sustain itself.

        The hard decision to walk away with integrity

        Eventually, Jon made the difficult decision to wind down the business. There was no dramatic exit or acquisition, but there was integrity. The team helped place employees in new roles and transitioned clients responsibly. Still, it was a painful experience.

        The failure wasn’t just financial; it was an ego hit. This was Jon’s first true experience of business ownership, and letting it go meant admitting that the original idea wasn’t as strong as he believed.

        Lessons learned

        1. The biggest lesson came from contrast. After running his own startup without a proven product-market fit, Jon developed a deep appreciation for franchising. Unlike a startup built on assumptions, franchises offer historical data, real performance benchmarks, and access to owners who have already walked the path. You can see results before you ever invest.
        2. There were personal lessons, too. Knowing when to admit you’re wrong matters just as much as knowing how to start. Humility, course correction, and the willingness to pivot are not weaknesses in entrepreneurship; they’re survival skills.
        3. Profitability, Jon learned, is oxygen. A business that can’t consistently operate in the black eventually suffocates, no matter how exciting the vision or how talented the team.
        
        

        Andrew’s takeaways

        1. One of the most important disciplines for any business owner is accurately closing the books each month. That means reviewing not just the profit and loss statement, but also the balance sheet. If your accountant can’t do that, it’s time for a new one. Monthly financial clarity allows you to identify problems early, before they become fatal.
        2. Another insight comes from scale. Based on analysis of tens of thousands of companies globally, Andrew points to $7.5 million in annual revenue as a critical threshold. Below that level, it’s tough to afford the management talent and infrastructure required to run a scalable business. If you can’t get there efficiently, it may be time to rethink the model.
        3. Finally, complexity is the silent killer. Businesses naturally drift toward offering more products, more services, and more custom solutions. Every added layer increases costs and erodes margins. Only disciplined leadership can stop complexity from overwhelming profitability.
        
        

        Actionable advice

        If you’re building a business, be honest about whether you’re chasing revenue or building something scalable. Early customization can help you survive, but staying there too long can trap you in a low-margin cycle that’s hard to escape.

        Focus on creating profitable top-line growth, not just growth for its own sake. Learn to say no, even when opportunities feel exciting. And remember: there is no perfect time to start a business. The best way to learn is to get in the game early, without betting everything, and build experience that you can compound over time.

        Jon’s recommendations

        Jon recommends starting with education and proven frameworks. He offers a free downloadable copy of his book, Non-Food Franchising, in a concise 90-page guide. The book has received strong feedback and provides practical insights for anyone considering business ownership.

        Listeners can download the PDF or audio version by visiting FranBridgeConsulting.com and sharing their email address. Those who prefer a physical copy can purchase it on Amazon, with all proceeds supporting Hope International.

        No.1 goal for the next 12 months

        Jon’s goal for the next 12 months is to grow passive income across multiple asset classes, including franchising. His goal is to build sustainable revenue streams that create freedom across all areas of life: faith, family, fitness, finances, and future ventures.

        Passive income, for Jon, isn’t just about money. It’s about capacity—the ability to choose how you spend your time and energy.

        Parting words

        “There’s never a good time to start a business. Get off the couch, dip your toe in the water, read our book, get in the game, and start thinking about it.”

        Jon Ostenson

        [spp-transcript]

        Connect with Jon Ostenson

        1. LinkedIn
        2. Twitter
        3. Facebook
        4. BIO: Jon is the Founder and CEO of FranBridge Consulting, a 2-time Inc. 5000 company, and he is a top 1% franchise consultant.

           STORY: Jon co-founded a marketing and call-center business that appeared successful on the surface, growing to millions in revenue and dozens of employees. However, excessive customization and an inability to charge prices that matched rising costs meant the business never became sustainably profitable.

           LEARNING: Profitability is oxygen. Knowing when to admit you’re wrong matters just as much as knowing how to start.

           “Humble yourself and admit when you’re wrong, course correct, and pivot.”

           Jon Ostenson

           Guest profile

           Jon Ostenson is the Founder and CEO of FranBridge Consulting, a 2-time Inc. 5000 company, and he is a top 1% franchise consultant. Jon is also the author of the bestselling book, Non-Food Franchising. Jon draws on his experience as a former Inc. 500 Franchise President and Multi-Brand Franchisee in helping his clients select their franchise investments.

           Worst investment ever

           Leaving the corporate world felt like freedom. After years of structure, predictability, and steady paychecks, you finally get to build something of your own. That was precisely where Jon found himself: grateful for his corporate experience, energized by the idea of business ownership, and eager to prove he could create something meaningful on his own terms.

           A promising partnership and a compelling business vision

           Shortly after leaving corporate life, Jon partnered with a colleague to launch a marketing and sales company. He owned 60 percent of the business and ran day-to-day operations, while his partner held the remaining 40 percent.

           The vision was compelling. The company would help franchise businesses grow by handling their marketing, answering inbound calls through an in-house call center, and booking appointments directly for clients. The promise was simple: make the phones ring and convert those calls into revenue.

           Early momentum and the illusion of success

           At first, it worked. The business grew quickly, attracting a strong leadership team and building a culture Jon was proud of. With around 35 employees and annual revenues of $3 million to $4 million, the company appeared successful from the outside. The team was energized, clients were signing on, and the pace was exciting.

           When growth didn’t translate into profit

           But beneath the surface, there was a quiet, persistent problem.

           The business wasn’t profitable.

           Despite all the effort, the long hours, and the constant tweaking, the company hovered around breakeven. Some months it lost money. Others it barely scraped by. Payroll was always looming, and profitability felt just out of reach. Jon tried adjusting pricing, shifting emphasis between marketing and call center services, and introducing new technology to increase value.

           But every fix only delayed the inevitable question he didn’t want to answer: What if the model itself was broken?

           The hidden cost of customization and complexity

           The core issue turned out to be customization. The business was designed to scale by serving franchise systems with repeatable processes. Instead, each franchisee insisted their market was different, their staff was unique, and their customers required special handling. Wanting to please early clients and drive revenue, Jon said yes. Again and again.

           Over time, the company became highly customized, operationally complex, and increasingly expensive to run. Pricing no longer matched costs. The more the business grew, the harder it became to make money. What looked like top-line success was masking a model that couldn’t sustain itself.

           The hard decision to walk away with integrity

           Eventually, Jon made the difficult decision to wind down the business. There was no dramatic exit or acquisition, but there was integrity. The team helped place employees in new roles and transitioned clients responsibly. Still, it was a painful experience.

           The failure wasn’t just financial; it was an ego hit. This was Jon’s first true experience of business ownership, and letting it go meant admitting that the original idea wasn’t as strong as he believed.

           Lessons learned

           1. The biggest lesson came from contrast. After running his own startup without a proven product-market fit, Jon developed a deep appreciation for franchising. Unlike a startup built on assumptions, franchises offer historical data, real performance benchmarks, and access to owners who have already walked the path. You can see results before you ever invest.
           2. There were personal lessons, too. Knowing when to admit you’re wrong matters just as much as knowing how to start. Humility, course correction, and the willingness to pivot are not weaknesses in entrepreneurship; they’re survival skills.
           3. Profitability, Jon learned, is oxygen. A business that can’t consistently operate in the black eventually suffocates, no matter how exciting the vision or how talented the team.
           
           

           Andrew’s takeaways

           1. One of the most important disciplines for any business owner is accurately closing the books each month. That means reviewing not just the profit and loss statement, but also the balance sheet. If your accountant can’t do that, it’s time for a new one. Monthly financial clarity allows you to identify problems early, before they become fatal.
           2. Another insight comes from scale. Based on analysis of tens of thousands of companies globally, Andrew points to $7.5 million in annual revenue as a critical threshold. Below that level, it’s tough to afford the management talent and infrastructure required to run a scalable business. If you can’t get there efficiently, it may be time to rethink the model.
           3. Finally, complexity is the silent killer. Businesses naturally drift toward offering more products, more services, and more custom solutions. Every added layer increases costs and erodes margins. Only disciplined leadership can stop complexity from overwhelming profitability.
           
           

           Actionable advice

           If you’re building a business, be honest about whether you’re chasing revenue or building something scalable. Early customization can help you survive, but staying there too long can trap you in a low-margin cycle that’s hard to escape.

           Focus on creating profitable top-line growth, not just growth for its own sake. Learn to say no, even when opportunities feel exciting. And remember: there is no perfect time to start a business. The best way to learn is to get in the game early, without betting everything, and build experience that you can compound over time.

           Jon’s recommendations

           Jon recommends starting with education and proven frameworks. He offers a free downloadable copy of his book, Non-Food Franchising, in a concise 90-page guide. The book has received strong feedback and provides practical insights for anyone considering business ownership.

           Listeners can download the PDF or audio version by visiting FranBridgeConsulting.com and sharing their email address. Those who prefer a physical copy can purchase it on Amazon, with all proceeds supporting Hope International.

           No.1 goal for the next 12 months

           Jon’s goal for the next 12 months is to grow passive income across multiple asset classes, including franchising. His goal is to build sustainable revenue streams that create freedom across all areas of life: faith, family, fitness, finances, and future ventures.

           Passive income, for Jon, isn’t just about money. It’s about capacity—the ability to choose how you spend your time and energy.

           Parting words

           “There’s never a good time to start a business. Get off the couch, dip your toe in the water, read our book, get in the game, and start thinking about it.”

           Jon Ostenson

           [spp-transcript]

           Connect with Jon Ostenson

           1. LinkedIn
           2. Twitter
           3. Facebook
           4. YouTube
           5. Book
           6. Website
           
           

           Andrew’s books

           1. How to Start Building Your Wealth Investing in the Stock Market
           2. My Worst Investment Ever
           3. 9 Valuation Mistakes and How to Avoid Them
           4. Transform Your Business with Dr.Deming’s 14 Points
           
           

           Andrew’s online programs

           1. Valuation Master Class
           2. The Become a Better Investor Community
           3. How to Start Building Your Wealth Investing in the Stock Market
           4. Finance Made Ridiculously Simple
           5. FVMR Investing: Quantamental Investing Across the World
           6. Become a Great Presenter and Increase Your Influence
           7. Transform Your Business with Dr. Deming’s 14 Points
           8. Achieve Your Goals
           
           

           Connect with Andrew Stotz:

           1. astotz.com
           2. LinkedIn
           3. Facebook
           4. Instagram
           5. Threads
           6. X
           7. YouTube
           8. My Worst Investment Ever Podcast
           
           ]]>3416cf19-4cd3-42a1-852e-a6b9cbe4a0f1Tue, 23 Dec 2025 06:00:00 +070026:29falsefullEdwin Endlich – Early Doesn't Always Mean RightBIO: Edwin Endlich is the Chief Marketing Officer of Wysh and President of the National Alliance for Financial Literacy and Inclusion.

           STORY: Edwin’s worst investment was buying Tilray stock at $143 during the early hype of legal cannabis investing. Swept up in the excitement of a “new frontier,” he held on as the price crashed—eventually selling at around 30 cents and losing over 99% of his investment.

           LEARNING: The fundamentals always apply, even in new or exciting industries. Don’t let hype replace due diligence.

            

           “We’re in this AI conversation, let’s not forget the fundamentals of the market. Learn from what has happened in this space before. And don’t get too cocky.”

           Edwin Endlich

            

           Guest profile

           Edwin Endlich is the Chief Marketing Officer of Wysh and President of the National Alliance for Financial Literacy and Inclusion. Edwin has spent his career at the intersection of marketing, fintech, and AI, helping financial institutions tell more human stories in an increasingly digital world. He’s passionate about making financial protection simple, accessible, and even a little more fun — proving you don’t need buzzwords or hype to make banking and technology relevant.

           Worst investment ever

           There’s nothing quite like the rush of feeling early—early to a trend, early to a movement, early to a once-in-a-lifetime opportunity. That’s precisely what Edwin felt in 2015–2016, when investing in legal cannabis became possible in parts of the United States.

           For the first time, regular people could invest in a newly legalized industry. It felt like history happening in real time, a frontier market ready to explode. Edwin and his friends didn’t want to miss out, especially when companies were going public, and their share prices seemed destined to skyrocket.

           One of those stocks was Tilray. At $143 a share, Edwin was convinced he was buying the future. He imagined stock splits, booming demand, and a cannabis empire rising from the ground floor. Instead, he watched that $143 tumble month after month, until he finally sold it for around 30 cents. The emotional rollercoaster of hope, disappointment, and finally acceptance was a journey Edwin will never forget.

           A 99.3% loss.

           He now calls it his worst investment—not just because of the financial hit, but because of how powerfully excitement and hype clouded his judgment.

           Lessons learned

           • Every investor thinks their situation is unique. But in reality, the same patterns repeat again and again.
           • Markets take time to mature.
           • Regulation can shift overnight.
           • Early doesn’t always mean right.
           • Excitement is not a strategy.
           
           

           Andrew’s takeaways

           • A portfolio isn’t just about diversification by industry or geography; it’s also about diversifying across stages of maturity.
           • Stable, well-regulated companies like Coca-Cola or Pepsi behave very differently from early-stage, hype-driven industries, such as the cannabis sector.
           • Even large companies, with teams of top analysts, often get it wrong.
           
           

           Actionable advice

           If Edwin could offer one piece of advice to anyone starry-eyed over the next big thing, it would be this:

           Do your due diligence. Seriously.

           Before you invest in anything—especially something exciting, futuristic, or rapidly trending—slow down and ask:

           • Has this been done before?
           • What can I learn from past bubbles?
           • What does history say about similar innovations?
           • Am I investing in fundamentals—or feelings?
           
           

           Whether it’s cannabis in 2016 or AI in 2024, the pattern is the same. Booms become bubbles. Investors overestimate how fast an industry will mature. And emotion often wins over discipline. But with the right mindset and discipline, you can avoid these pitfalls.

           Edwin’s recommendations

           Edwin encourages people to empower themselves with real financial knowledge. That’s why he co-founded the National Alliance for Financial Literacy and Inclusion (NAFLI)—a nonprofit dedicated to helping individuals understand money, investing, and financial products.

           Whether you’re new to investing or leading a financial institution, NAFLI offers education, tools, and resources to help individuals make more informed financial decisions.

           No.1 goal for the next 12 months

           Edwin’s goal for the next 12 months is to have a full, uninterrupted conversation with his daughter, one that lasts longer than 10 minutes and isn’t broken by phones, notifications, or distractions. Edwin wants to rebuild community and presence—starting at home.

           Parting words

            

           “Stay focused and look to the past.”

           Edwin Endlich

            

           [spp-transcript]

            

           Connect with Edwin Endlich

           • LinkedIn
           • Website
           
           

           Andrew’s books

           • How to Start Building Your Wealth Investing in the Stock Market
           • My Worst Investment Ever
           • 9 Valuation Mistakes and How to Avoid Them
           • Transform Your Business with Dr.Deming’s 14 Points
           
           

           Andrew’s online programs

           • Valuation Master Class
           • The Become a Better Investor Community
           • How to Start Building Your Wealth Investing in the Stock Market
           • Finance Made Ridiculously Simple
           • FVMR Investing: Quantamental Investing Across the World
           • Become a Great Presenter and Increase Your Influence
           • Transform Your Business with Dr. Deming’s 14 Points
           • Achieve Your Goals
           
           

           Connect with Andrew Stotz:

           • astotz.com
           • LinkedIn
           • Facebook
           • Instagram
           • Threads
           • X
           • YouTube
           • My Worst Investment Ever Podcast
           
           ]]>BIO: Edwin Endlich is the Chief Marketing Officer of Wysh and President of the National Alliance for Financial Literacy and Inclusion.

           STORY: Edwin’s worst investment was buying Tilray stock at $143 during the early hype of legal cannabis investing. Swept up in the excitement of a “new frontier,” he held on as the price crashed—eventually selling at around 30 cents and losing over 99% of his investment.

           LEARNING: The fundamentals always apply, even in new or exciting industries. Don’t let hype replace due diligence.

            

           “We’re in this AI conversation, let’s not forget the fundamentals of the market. Learn from what has happened in this space before. And don’t get too cocky.”

           Edwin Endlich

            

           Guest profile

           Edwin Endlich is the Chief Marketing Officer of Wysh and President of the National Alliance for Financial Literacy and Inclusion. Edwin has spent his career at the intersection of marketing, fintech, and AI, helping financial institutions tell more human stories in an increasingly digital world. He’s passionate about making financial protection simple, accessible, and even a little more fun — proving you don’t need buzzwords or hype to make banking and technology relevant.

           Worst investment ever

           There’s nothing quite like the rush of feeling early—early to a trend, early to a movement, early to a once-in-a-lifetime opportunity. That’s precisely what Edwin felt in 2015–2016, when investing in legal cannabis became possible in parts of the United States.

           For the first time, regular people could invest in a newly legalized industry. It felt like history happening in real time, a frontier market ready to explode. Edwin and his friends didn’t want to miss out, especially when companies were going public, and their share prices seemed destined to skyrocket.

           One of those stocks was Tilray. At $143 a share, Edwin was convinced he was buying the future. He imagined stock splits, booming demand, and a cannabis empire rising from the ground floor. Instead, he watched that $143 tumble month after month, until he finally sold it for around 30 cents. The emotional rollercoaster of hope, disappointment, and finally acceptance was a journey Edwin will never forget.

           A 99.3% loss.

           He now calls it his worst investment—not just because of the financial hit, but because of how powerfully excitement and hype clouded his judgment.

           Lessons learned

           • Every investor thinks their situation is unique. But in reality, the same patterns repeat again and again.
           • Markets take time to mature.
           • Regulation can shift overnight.
           • Early doesn’t always mean right.
           • Excitement is not a strategy.
           
           

           Andrew’s takeaways

           • A portfolio isn’t just about diversification by industry or geography; it’s also about diversifying across stages of maturity.
           • Stable, well-regulated companies like Coca-Cola or Pepsi behave very differently from early-stage, hype-driven industries, such as the cannabis sector.
           • Even large companies, with teams of top analysts, often get it wrong.
           
           

           Actionable advice

           If Edwin could offer one piece of advice to anyone starry-eyed over the next big thing, it would be this:

           Do your due diligence. Seriously.

           Before you invest in anything—especially something exciting, futuristic, or rapidly trending—slow down and ask:

           • Has this been done before?
           • What can I learn from past bubbles?
           • What does history say about similar innovations?
           • Am I investing in fundamentals—or feelings?
           
           

           Whether it’s cannabis in 2016 or AI in 2024, the pattern is the same. Booms become bubbles. Investors overestimate how fast an industry will mature. And emotion often wins over discipline. But with the right mindset and discipline, you can avoid these pitfalls.

           Edwin’s recommendations

           Edwin encourages people to empower themselves with real financial knowledge. That’s why he co-founded the National Alliance for Financial Literacy and Inclusion (NAFLI)—a nonprofit dedicated to helping individuals understand money, investing, and financial products.

           Whether you’re new to investing or leading a financial institution, NAFLI offers education, tools, and resources to help individuals make more informed financial decisions.

           No.1 goal for the next 12 months

           Edwin’s goal for the next 12 months is to have a full, uninterrupted conversation with his daughter, one that lasts longer than 10 minutes and isn’t broken by phones, notifications, or distractions. Edwin wants to rebuild community and presence—starting at home.

           Parting words

            

           “Stay focused and look to the past.”

           Edwin Endlich

            

           [spp-transcript]

            

           Connect with Edwin Endlich

           • LinkedIn
           • Website
           
           

           Andrew’s books

           • How to Start Building Your Wealth Investing in the Stock Market
           • My Worst Investment Ever
           • 9 Valuation Mistakes and How to Avoid Them
           • Transform Your Business with Dr.Deming’s 14 Points
           
           

           Andrew’s online programs

           • Valuation Master Class
           • The Become a Better Investor Community
           • How to Start Building Your Wealth Investing in the Stock Market
           • Finance Made Ridiculously Simple
           • FVMR Investing: Quantamental Investing Across the World
           • Become a Great Presenter and Increase Your Influence
           • Transform Your Business with Dr. Deming’s 14 Points
           • Achieve Your Goals
           
           

           Connect with Andrew Stotz:

           • astotz.com
           • LinkedIn
           • Facebook
           • Instagram
           • Threads
           • X
           • YouTube
           • My Worst Investment Ever Podcast
           
           ]]>934f074d-afe4-49aa-b74f-6e3b7e74ec62Tue, 02 Dec 2025 06:00:00 +070021:19falsefullScott Alldridge – Hot Coffee, Cold Reality: The $10,000 Drone Delivery MistakeBIO: Scott Alldridge is CEO of IP Services and President of the IT Process Institute, a bestselling author of the VisibleOps series, and a Certified Chief Information Security Officer.

           STORY: Scott’s worst investment was a stake in a startup promising to deliver hot coffee by drone. Excited by the futuristic idea, he invested before the concept was proven—but the project quickly crashed when the FAA banned drone deliveries and a prototype failed spectacularly.

           LEARNING: Being first doesn’t always mean being right. Due diligence is non-negotiable.

            

           “You don’t have to jump in. Being the first with the most doesn’t matter if it’s a bad idea—you’ll lose money anyway.”

           Scott Alldridge

            

           Guest profile

           Scott Alldridge is CEO of IP Services and President of the IT Process Institute, a bestselling author of the VisibleOps series, and a Certified Chief Information Security Officer. He holds an MBA in cybersecurity and has over 30 years of experience in IT and cybersecurity leadership. Scott empowers organizations to achieve resilience through process excellence, Zero Trust, and AI-driven security.

           Worst investment ever

           If you live in the Pacific Northwest, coffee isn’t just a drink; it’s a way of life. Seattle is home to Starbucks, and in Oregon, coffee culture runs deep. So when Scott was pitched an idea that combined coffee and technology—delivering hot coffee via drone—he couldn’t resist.

           The concept sounded revolutionary: push a button on your phone, and a drone drops off your piping-hot Americano right at your doorstep. It felt like the future—part Amazon innovation, part TED Talk dream.

           Excited, Scott invested for a 3% stake in the startup. The founders promised a caffeinated empire built on convenience and cutting-edge tech.

           But just three months later, the buzz wore off. The FAA issued a cease-and-desist order on all drone delivery experiments, particularly those involving liquids.

           And then came the final straw: the company’s prototype drone spilled an entire cup of hot coffee mid-flight, grounding both the drone and Scott’s hopes. The “coffee drone revolution” turned into a $10,000 lesson in wishful thinking. Delivering hot coffee by drone was never going to fly—literally.

           Lessons learned

           • Being first doesn’t always mean being right.
           • It’s tempting to jump into the next big idea, especially when it sounds exciting and visionary. However, early-stage innovation carries significant risk, especially when the concept hasn’t been tested or proven.
           • Enthusiasm can cloud judgment. Instead of investing based on a slick pitch deck or futuristic concept, it’s smarter to wait until an idea is validated, tested, and compliant with regulations.
           
           

           Andrew’s takeaways

           • Every idea looks brilliant until reality—and regulation—show up.
           • Even in large corporations, where top analysts and executives lead multi-million-dollar mergers, success isn’t guaranteed. Only about 20% of them added value within three to five years.
           • Business is hard, and due diligence is non-negotiable.
           
           

           Actionable advice

           Always do your due diligence. Before investing in any idea—no matter how exciting—slow down and dig deep:

           • Validate the concept. Is there a working prototype, or just a fancy pitch?
           • Check the regulations, especially if the business operates in a grey area (like drones or cannabis).
           • Assess the risk. What happens if laws, markets, or consumer behaviour change?
           • Stay patient. If it’s truly a good idea, it will still be good when it’s proven.
           
           

           Scott’s recommendations

           Scott recommends his Amazon bestseller, Visible Ops Cybersecurity: Practical Ways to Enhance Your Cybersecurity Posture, which breaks down complex IT security concepts into real-world strategies that leaders can actually apply.

           For executives who don’t speak “tech,” he’s also written The Visible Ops Executive Companion Guide, a concise 105-page edition with zero “geek speak”—just actionable guidance.

           And coming soon: Visible Ops AI: Artificial Intelligence Governance with Practical Guidance, where Scott explores how businesses can safely and responsibly integrate AI while protecting data integrity.

           No.1 goal for the next 12 months

           Scott’s goal for the next 12 months is to double down on two things: growth and impact.

           On the business side, his goal is to expand the top-line revenue of his IT services firm and bring in new client partnerships. But there’s also a bigger mission driving him—making the world a safer place through smarter, more disciplined cybersecurity practices.

           Parting words

            

           “Thank you for having me today. Let’s keep the world a cyber-safe place.”

           Scott Alldridge

            

           [spp-transcript]

            

           Connect with Scott Alldridge

           • LinkedIn
           • Instagram
           • Facebook
           • Website
           • Book
           
           

           Andrew’s books

           • How to Start Building Your Wealth Investing in the Stock Market
           • My Worst Investment Ever
           • 9 Valuation Mistakes and How to Avoid Them
           • Transform Your Business with Dr.Deming’s 14 Points
           
           

           Andrew’s online programs

           • Valuation Master Class
           • The Become a Better Investor Community
           • How to Start Building Your Wealth Investing in the Stock Market
           • Finance Made Ridiculously Simple
           • FVMR Investing: Quantamental Investing Across the World
           • Become a Great Presenter and Increase Your Influence
           • Transform Your Business with Dr. Deming’s 14 Points
           • Achieve Your Goals
           
           

           Connect with Andrew Stotz:

           • astotz.com
           • LinkedIn
           • Facebook
           • Instagram
           • Threads
           • X
           • YouTube
           • My Worst Investment Ever Podcast
           
           ]]>BIO: Scott Alldridge is CEO of IP Services and President of the IT Process Institute, a bestselling author of the VisibleOps series, and a Certified Chief Information Security Officer.

           STORY: Scott’s worst investment was a stake in a startup promising to deliver hot coffee by drone. Excited by the futuristic idea, he invested before the concept was proven—but the project quickly crashed when the FAA banned drone deliveries and a prototype failed spectacularly.

           LEARNING: Being first doesn’t always mean being right. Due diligence is non-negotiable.

            

           “You don’t have to jump in. Being the first with the most doesn’t matter if it’s a bad idea—you’ll lose money anyway.”

           Scott Alldridge

            

           Guest profile

           Scott Alldridge is CEO of IP Services and President of the IT Process Institute, a bestselling author of the VisibleOps series, and a Certified Chief Information Security Officer. He holds an MBA in cybersecurity and has over 30 years of experience in IT and cybersecurity leadership. Scott empowers organizations to achieve resilience through process excellence, Zero Trust, and AI-driven security.

           Worst investment ever

           If you live in the Pacific Northwest, coffee isn’t just a drink; it’s a way of life. Seattle is home to Starbucks, and in Oregon, coffee culture runs deep. So when Scott was pitched an idea that combined coffee and technology—delivering hot coffee via drone—he couldn’t resist.

           The concept sounded revolutionary: push a button on your phone, and a drone drops off your piping-hot Americano right at your doorstep. It felt like the future—part Amazon innovation, part TED Talk dream.

           Excited, Scott invested for a 3% stake in the startup. The founders promised a caffeinated empire built on convenience and cutting-edge tech.

           But just three months later, the buzz wore off. The FAA issued a cease-and-desist order on all drone delivery experiments, particularly those involving liquids.

           And then came the final straw: the company’s prototype drone spilled an entire cup of hot coffee mid-flight, grounding both the drone and Scott’s hopes. The “coffee drone revolution” turned into a $10,000 lesson in wishful thinking. Delivering hot coffee by drone was never going to fly—literally.

           Lessons learned

           • Being first doesn’t always mean being right.
           • It’s tempting to jump into the next big idea, especially when it sounds exciting and visionary. However, early-stage innovation carries significant risk, especially when the concept hasn’t been tested or proven.
           • Enthusiasm can cloud judgment. Instead of investing based on a slick pitch deck or futuristic concept, it’s smarter to wait until an idea is validated, tested, and compliant with regulations.
           
           

           Andrew’s takeaways

           • Every idea looks brilliant until reality—and regulation—show up.
           • Even in large corporations, where top analysts and executives lead multi-million-dollar mergers, success isn’t guaranteed. Only about 20% of them added value within three to five years.
           • Business is hard, and due diligence is non-negotiable.
           
           

           Actionable advice

           Always do your due diligence. Before investing in any idea—no matter how exciting—slow down and dig deep:

           • Validate the concept. Is there a working prototype, or just a fancy pitch?
           • Check the regulations, especially if the business operates in a grey area (like drones or cannabis).
           • Assess the risk. What happens if laws, markets, or consumer behaviour change?
           • Stay patient. If it’s truly a good idea, it will still be good when it’s proven.
           
           

           Scott’s recommendations

           Scott recommends his Amazon bestseller, Visible Ops Cybersecurity: Practical Ways to Enhance Your Cybersecurity Posture, which breaks down complex IT security concepts into real-world strategies that leaders can actually apply.

           For executives who don’t speak “tech,” he’s also written The Visible Ops Executive Companion Guide, a concise 105-page edition with zero “geek speak”—just actionable guidance.

           And coming soon: Visible Ops AI: Artificial Intelligence Governance with Practical Guidance, where Scott explores how businesses can safely and responsibly integrate AI while protecting data integrity.

           No.1 goal for the next 12 months

           Scott’s goal for the next 12 months is to double down on two things: growth and impact.

           On the business side, his goal is to expand the top-line revenue of his IT services firm and bring in new client partnerships. But there’s also a bigger mission driving him—making the world a safer place through smarter, more disciplined cybersecurity practices.

           Parting words

            

           “Thank you for having me today. Let’s keep the world a cyber-safe place.”

           Scott Alldridge

            

           [spp-transcript]

            

           Connect with Scott Alldridge

           • LinkedIn
           • Instagram
           • Facebook
           • Website
           • Book
           
           

           Andrew’s books

           • How to Start Building Your Wealth Investing in the Stock Market
           • My Worst Investment Ever
           • 9 Valuation Mistakes and How to Avoid Them
           • Transform Your Business with Dr.Deming’s 14 Points
           
           

           Andrew’s online programs

           • Valuation Master Class
           • The Become a Better Investor Community
           • How to Start Building Your Wealth Investing in the Stock Market
           • Finance Made Ridiculously Simple
           • FVMR Investing: Quantamental Investing Across the World
           • Become a Great Presenter and Increase Your Influence
           • Transform Your Business with Dr. Deming’s 14 Points
           • Achieve Your Goals
           
           

           Connect with Andrew Stotz:

           • astotz.com
           • LinkedIn
           • Facebook
           • Instagram
           • Threads
           • X
           • YouTube
           • My Worst Investment Ever Podcast
           
           ]]>9f26214c-2f83-4232-8c5f-f8940e54e547Tue, 11 Nov 2025 06:00:00 +070028:50falsefullDr. Thomas Powell – The One Rule You Must Never Break as an Investor (Even for Friends)BIO: Thomas J. Powell, founder of The Powell Perspective™, is a seasoned entrepreneur, investor, and advocate for founders, bringing clarity, strategy, and resilience to leaders building at scale.

           STORY: Thomas invested $3.6M in a friend’s cannabis company, where he ignored his own due diligence framework. Because he skipped key governance protections and didn’t document alignment or exit terms, the investment became frustrating, hard to control, and nearly impossible to fix—proving that breaking your own rules is the most expensive mistake.

           LEARNING: Never mix friendship and business. Make sure both you and the founder are solving the same problem.

            

           “They say good fences make good neighbors, good documents keep good friendships.”

           Thomas Powell

            

           Guest profile

           Imagine navigating the high-stakes world of capital, strategy, and legacy with a guide who has raised billions and structured ventures worldwide. Thomas J. Powell, founder of The Powell Perspective™, is a seasoned entrepreneur, investor, and advocate for founders, bringing clarity, strategy, and resilience to leaders building at scale.

           Worst investment ever

           You’ve probably heard the saying, “Never mix friendship and business.” Thomas learned that lesson the hard way.

           His story starts with good intentions. When his kids’ grandmother battled breast cancer, cannabis was the only thing that eased her treatment side effects. So when medical marijuana became legal in a few US states, investing in the cannabis industry felt like the right thing to do.

           But here’s where things went wrong.

           A close friend brought him the deal, and because of that personal connection, Thomas skipped many of the due diligence steps he usually followed through his family office. No detailed governance clauses. No proper reporting framework. No accountability structure.

           It wasn’t a small investment either—about $3.6 million. As time went on, the cracks began to show. The company missed financial reports, accounting systems were weak, and when COVID hit, things only got messier. To make matters worse, taking over the business wasn’t even an option since he didn’t have a cannabis license. The emotional toll of this situation was significant, as Thomas had to face the reality of his investment failing due to trusting a friend blindly.

           The worst part? Having to look a friend in the eye, knowing he’d broken his own investment rules.

           Lessons learned

           • Verify alignment: Make sure both you and the founder are solving the same problem, and that you share the same exit goals. Ask questions like, “If someone offered to buy this company for $25 million today, would you sell?” If your answers don’t match, you’re not aligned.
           • Watch the hubris: Just because you’re smart or successful doesn’t mean you can see around every corner. Understand the legal and regulatory landscape before investing, especially in industries like cannabis, where compliance is complex.
           • Enforce accountability: Set clear reporting expectations from day one and include consequences for missed deadlines. Thomas admits that if his deal had stricter enforcement clauses, it would’ve saved him time, money, and frustration later on.
           
           

           Andrew’s takeaways

           • Many startups underpay themselves. It might sound noble, but it actually distorts valuation and creates problems later.
           • Make sure founders are paying themselves a market-rate salary. That way, when the business is valued or acquired, there are no nasty surprises about hidden costs.
           • Define roles clearly. Being a founder is different from being an employee. A salary compensates for your work; ownership rewards your risk. Mixing the two confuses things.
           
           

           Actionable advice

           Align the capital and exit terms from day one—and write them down, even on a napkin. You don’t need a 30-page legal contract to start. Even a handwritten summary that defines the key terms, goals, and triggers for selling or exiting can prevent misunderstandings later. Because once the ink dries, or worse, once the money’s wired, it’s too late to wish you’d had that conversation.

           Thomas’s recommendations

           Thomas recommends these books, principles, and resources for smarter investing.

           • Read The Richest Man in Babylon – A timeless classic that teaches simple, lasting lessons about money management and investing in what you understand.
           • Invest in problems you understand. Don’t chase hype. If you know how an industry works, you’ll see both the risks and opportunities clearly.
           • Take advice from people with a “bigger pile.” In other words, learn from those who’ve already achieved more than you in that field. Theory is cheap—experience is priceless.
           • Use structured tools. Thomas’s Founders Office provides frameworks that evaluate pitch decks for both founders and investors, helping you spot weaknesses and strengths before committing capital.
           
           

           No.1 goal for the next 12 months

           Thomas’s goal for the next 12 months is to expand his Founders Office cohort program, connecting entrepreneurs and investors to create better capital alignment. He’s passionate about free enterprise and founder advocacy, believing that capitalism—done right—can lift people out of poverty and fuel innovation worldwide. Whether in the US, Europe, or Sub-Saharan Africa, his mission is the same: empower founders and investors to build lasting, ethical wealth together.

           Parting words

            

           “Learn from other people’s experiences. When you see someone make a mistake, don’t repeat it because we don’t learn from the wins, we learn from the failures.”

           Thomas Powell

            

           [spp-transcript]

            

           Connect with Dr. Thomas Powell

           • LinkedIn
           • Instagram
           • Website
           • Master Class
           
           

           Andrew’s books

           • How to Start Building Your Wealth Investing in the Stock Market
           • My Worst Investment Ever
           • 9 Valuation Mistakes and How to Avoid Them
           • Transform Your Business with Dr.Deming’s 14 Points
           
           

           Andrew’s online programs

           • Valuation Master Class
           • The Become a Better Investor Community
           • How to Start Building Your Wealth Investing in the Stock Market
           • Finance Made Ridiculously Simple
           • FVMR Investing: Quantamental Investing Across the World
           • Become a Great Presenter and Increase Your Influence
           • Transform Your Business with Dr. Deming’s 14 Points
           • Achieve Your Goals
           
           

           Connect with Andrew Stotz:

           • astotz.com
           • LinkedIn
           • Facebook
           • Instagram
           • Threads
           • BIO: Thomas J. Powell, founder of The Powell Perspective™, is a seasoned entrepreneur, investor, and advocate for founders, bringing clarity, strategy, and resilience to leaders building at scale.

             STORY: Thomas invested $3.6M in a friend’s cannabis company, where he ignored his own due diligence framework. Because he skipped key governance protections and didn’t document alignment or exit terms, the investment became frustrating, hard to control, and nearly impossible to fix—proving that breaking your own rules is the most expensive mistake.

             LEARNING: Never mix friendship and business. Make sure both you and the founder are solving the same problem.

              

             “They say good fences make good neighbors, good documents keep good friendships.”

             Thomas Powell

              

             Guest profile

             Imagine navigating the high-stakes world of capital, strategy, and legacy with a guide who has raised billions and structured ventures worldwide. Thomas J. Powell, founder of The Powell Perspective™, is a seasoned entrepreneur, investor, and advocate for founders, bringing clarity, strategy, and resilience to leaders building at scale.

             Worst investment ever

             You’ve probably heard the saying, “Never mix friendship and business.” Thomas learned that lesson the hard way.

             His story starts with good intentions. When his kids’ grandmother battled breast cancer, cannabis was the only thing that eased her treatment side effects. So when medical marijuana became legal in a few US states, investing in the cannabis industry felt like the right thing to do.

             But here’s where things went wrong.

             A close friend brought him the deal, and because of that personal connection, Thomas skipped many of the due diligence steps he usually followed through his family office. No detailed governance clauses. No proper reporting framework. No accountability structure.

             It wasn’t a small investment either—about $3.6 million. As time went on, the cracks began to show. The company missed financial reports, accounting systems were weak, and when COVID hit, things only got messier. To make matters worse, taking over the business wasn’t even an option since he didn’t have a cannabis license. The emotional toll of this situation was significant, as Thomas had to face the reality of his investment failing due to trusting a friend blindly.

             The worst part? Having to look a friend in the eye, knowing he’d broken his own investment rules.

             Lessons learned

             • Verify alignment: Make sure both you and the founder are solving the same problem, and that you share the same exit goals. Ask questions like, “If someone offered to buy this company for $25 million today, would you sell?” If your answers don’t match, you’re not aligned.
             • Watch the hubris: Just because you’re smart or successful doesn’t mean you can see around every corner. Understand the legal and regulatory landscape before investing, especially in industries like cannabis, where compliance is complex.
             • Enforce accountability: Set clear reporting expectations from day one and include consequences for missed deadlines. Thomas admits that if his deal had stricter enforcement clauses, it would’ve saved him time, money, and frustration later on.
             
             

             Andrew’s takeaways

             • Many startups underpay themselves. It might sound noble, but it actually distorts valuation and creates problems later.
             • Make sure founders are paying themselves a market-rate salary. That way, when the business is valued or acquired, there are no nasty surprises about hidden costs.
             • Define roles clearly. Being a founder is different from being an employee. A salary compensates for your work; ownership rewards your risk. Mixing the two confuses things.
             
             

             Actionable advice

             Align the capital and exit terms from day one—and write them down, even on a napkin. You don’t need a 30-page legal contract to start. Even a handwritten summary that defines the key terms, goals, and triggers for selling or exiting can prevent misunderstandings later. Because once the ink dries, or worse, once the money’s wired, it’s too late to wish you’d had that conversation.

             Thomas’s recommendations

             Thomas recommends these books, principles, and resources for smarter investing.

             • Read The Richest Man in Babylon – A timeless classic that teaches simple, lasting lessons about money management and investing in what you understand.
             • Invest in problems you understand. Don’t chase hype. If you know how an industry works, you’ll see both the risks and opportunities clearly.
             • Take advice from people with a “bigger pile.” In other words, learn from those who’ve already achieved more than you in that field. Theory is cheap—experience is priceless.
             • Use structured tools. Thomas’s Founders Office provides frameworks that evaluate pitch decks for both founders and investors, helping you spot weaknesses and strengths before committing capital.
             
             

             No.1 goal for the next 12 months

             Thomas’s goal for the next 12 months is to expand his Founders Office cohort program, connecting entrepreneurs and investors to create better capital alignment. He’s passionate about free enterprise and founder advocacy, believing that capitalism—done right—can lift people out of poverty and fuel innovation worldwide. Whether in the US, Europe, or Sub-Saharan Africa, his mission is the same: empower founders and investors to build lasting, ethical wealth together.

             Parting words

              

             “Learn from other people’s experiences. When you see someone make a mistake, don’t repeat it because we don’t learn from the wins, we learn from the failures.”

             Thomas Powell

              

             [spp-transcript]

              

             Connect with Dr. Thomas Powell

             • LinkedIn
             • Instagram
             • Website
             • Master Class
             
             

             Andrew’s books

             • How to Start Building Your Wealth Investing in the Stock Market
             • My Worst Investment Ever
             • 9 Valuation Mistakes and How to Avoid Them
             • Transform Your Business with Dr.Deming’s 14 Points
             
             

             Andrew’s online programs

             • Valuation Master Class
             • The Become a Better Investor Community
             • How to Start Building Your Wealth Investing in the Stock Market
             • Finance Made Ridiculously Simple
             • FVMR Investing: Quantamental Investing Across the World
             • Become a Great Presenter and Increase Your Influence
             • Transform Your Business with Dr. Deming’s 14 Points
             • Achieve Your Goals
             
             

             Connect with Andrew Stotz:

             • astotz.com
             • LinkedIn
             • Facebook
             • Instagram
             • Threads
             • X
             • YouTube
             • My Worst Investment Ever Podcast
             
             ]]>2cadcaca-33f3-45be-ae26-f07b489ca888Tue, 21 Oct 2025 06:00:00 +070023:15falsefullDan Novaes – The Treasury Strategy That Cost $100 MillionBIO: As Co-Founder & CEO of Mode Mobile, Dan Novaes is leading the transformation of how people interact with technology. His “Earn As You Go” software empowers millions of consumers to turn daily habits into passive income.

             STORY: Dan decided to take the bold move of turning his treasury into a long-term crypto strategy. What started as $2 million in Bitcoin and Ethereum ballooned to $30 million, but the 2022 crash and business pressures forced him to liquidate at low prices—missing out on what could have been a $100 million windfall.

             LEARNING: Don’t chase aggressive expansion without a clear path to profitability. Stick to your core business. Separate your business from speculative bets.

              

             “Everyone has a plan until they get punched in the face. Take a moment of deep thinking every week when things are going well, think about everything that could go wrong, and then reassess your position.”

             Dan Novaes

              

             Guest profile

             As Co-Founder & CEO of Mode Mobile, Dan Novaes is leading the transformation of how people interact with technology. His “Earn As You Go” software empowers millions of consumers to turn daily habits into passive income. Under his leadership, Mode achieved 32,481% revenue growth from 2019 to 2022 and ranked #1 in Software on Deloitte’s Technology Fast 500 in North America.

             Worst investment ever

             In today’s rapidly evolving and highly interconnected business world, companies are increasingly relying on external partnerships to drive growth and innovation.

             Dan’s story begins in the early days of crypto. His company had raised funds through Bitcoin and Ethereum when Bitcoin was valued at just a few thousand dollars and Ethereum at only a few hundred. This early success in the crypto market was a testament to the potential for significant growth that these investments could bring.

             Once the business had a comfortable runway, Dan made a bold move—he turned their treasury, which is the accumulated profits and cash reserves, into a long-term crypto strategy, much like what companies like MicroStrategy would later become known for.

             Riding the wave

             At first, the decision looked genius. That $1–2 million ballooned into $30 million. Dan was on CNBC, celebrating as Bitcoin crossed $10,000, and his company seemed unstoppable. They never had to fundraise again—until the 2022 crash.

             The crash

             In 2022, Bitcoin’s price fell from $63,000 to $18,000, and pressure mounted. Compounding the pain, many of Dan’s advertising partners went bankrupt, leaving unpaid bills. This was a significant blow to the company’s financial stability. To survive, Dan’s company had to liquidate almost the entire treasury at depressed prices.

             Had Dan managed his growth and financials more cautiously, that crypto position could have grown to $100 million or more. Instead, he walked away with far less—and a bitter lesson.

             Lessons learned

             • Growth at all costs is dangerous. Chasing aggressive expansion without a clear path to profitability can leave your company vulnerable when market conditions shift.
             • Profit-taking matters. Riding the wave without ever securing gains turned paper wealth into a forced liquidation.
             • Stick to your core business.
             • Discipline is everything. Not letting market euphoria dictate strategy is critical to long-term survival.
             
             

             Andrew’s takeaways

             • Separate your business from speculative bets. Don’t gamble with your excess cash on foreign exchange trades. Instead, hedge your risks because trading currencies isn’t your core business.
             • Have cash discipline for survival through decades of ups and downs.
             • Guard your cash, respect your core business, and don’t confuse speculative opportunities with sustainable operations.
             
             

             Actionable advice

             Take time every week for deep thinking. When things are going well, take a moment to ask: What could go wrong? By slowing down and imagining worst-case scenarios, you can prepare contingency plans before you get “punched in the face” by reality. This proactive approach to risk management will keep you prepared for any eventuality.

             Dan’s recommendations

             Dan recommends building the habit of scheduled deep thinking. Carve out one or two hours weekly—whether it’s through running or quiet reflection. The practice isn’t just for investing; it sharpens decision-making across life and business.

             No.1 goal for the next 12 months

             Dan’s goal for the next 12 months is to double revenue and triple EBITDA through acquiring and growing new businesses. It’s a bold target, but one grounded in the hard lessons of the past. This time, growth will come with more balance, more discipline, and a stronger focus on sustainability.

             Parting words

              

             “Thank you for having me. Feel free to reach out.”

             Dan Novaes

              

             [spp-transcript]

              

             Connect with Dan Novaes

             • LinkedIn
             • Website
             
             

             Andrew’s books

             • How to Start Building Your Wealth Investing in the Stock Market
             • My Worst Investment Ever
             • 9 Valuation Mistakes and How to Avoid Them
             • Transform Your Business with Dr.Deming’s 14 Points
             
             

             Andrew’s online programs

             • Valuation Master Class
             • The Become a Better Investor Community
             • How to Start Building Your Wealth Investing in the Stock Market
             • Finance Made Ridiculously Simple
             • FVMR Investing: Quantamental Investing Across the World
             • Become a Great Presenter and Increase Your Influence
             • Transform Your Business with Dr. Deming’s 14 Points
             • Achieve Your Goals
             
             

             Connect with Andrew Stotz:

             • astotz.com
             • LinkedIn
             • Facebook
             • Instagram
             • Threads
             • X
             • YouTube
             • My Worst Investment Ever Podcast
             
             ]]>BIO: As Co-Founder & CEO of Mode Mobile, Dan Novaes is leading the transformation of how people interact with technology. His “Earn As You Go” software empowers millions of consumers to turn daily habits into passive income.

             STORY: Dan decided to take the bold move of turning his treasury into a long-term crypto strategy. What started as $2 million in Bitcoin and Ethereum ballooned to $30 million, but the 2022 crash and business pressures forced him to liquidate at low prices—missing out on what could have been a $100 million windfall.

             LEARNING: Don’t chase aggressive expansion without a clear path to profitability. Stick to your core business. Separate your business from speculative bets.

              

             “Everyone has a plan until they get punched in the face. Take a moment of deep thinking every week when things are going well, think about everything that could go wrong, and then reassess your position.”

             Dan Novaes

              

             Guest profile

             As Co-Founder & CEO of Mode Mobile, Dan Novaes is leading the transformation of how people interact with technology. His “Earn As You Go” software empowers millions of consumers to turn daily habits into passive income. Under his leadership, Mode achieved 32,481% revenue growth from 2019 to 2022 and ranked #1 in Software on Deloitte’s Technology Fast 500 in North America.

             Worst investment ever

             In today’s rapidly evolving and highly interconnected business world, companies are increasingly relying on external partnerships to drive growth and innovation.

             Dan’s story begins in the early days of crypto. His company had raised funds through Bitcoin and Ethereum when Bitcoin was valued at just a few thousand dollars and Ethereum at only a few hundred. This early success in the crypto market was a testament to the potential for significant growth that these investments could bring.

             Once the business had a comfortable runway, Dan made a bold move—he turned their treasury, which is the accumulated profits and cash reserves, into a long-term crypto strategy, much like what companies like MicroStrategy would later become known for.

             Riding the wave

             At first, the decision looked genius. That $1–2 million ballooned into $30 million. Dan was on CNBC, celebrating as Bitcoin crossed $10,000, and his company seemed unstoppable. They never had to fundraise again—until the 2022 crash.

             The crash

             In 2022, Bitcoin’s price fell from $63,000 to $18,000, and pressure mounted. Compounding the pain, many of Dan’s advertising partners went bankrupt, leaving unpaid bills. This was a significant blow to the company’s financial stability. To survive, Dan’s company had to liquidate almost the entire treasury at depressed prices.

             Had Dan managed his growth and financials more cautiously, that crypto position could have grown to $100 million or more. Instead, he walked away with far less—and a bitter lesson.

             Lessons learned

             • Growth at all costs is dangerous. Chasing aggressive expansion without a clear path to profitability can leave your company vulnerable when market conditions shift.
             • Profit-taking matters. Riding the wave without ever securing gains turned paper wealth into a forced liquidation.
             • Stick to your core business.
             • Discipline is everything. Not letting market euphoria dictate strategy is critical to long-term survival.
             
             

             Andrew’s takeaways

             • Separate your business from speculative bets. Don’t gamble with your excess cash on foreign exchange trades. Instead, hedge your risks because trading currencies isn’t your core business.
             • Have cash discipline for survival through decades of ups and downs.
             • Guard your cash, respect your core business, and don’t confuse speculative opportunities with sustainable operations.
             
             

             Actionable advice

             Take time every week for deep thinking. When things are going well, take a moment to ask: What could go wrong? By slowing down and imagining worst-case scenarios, you can prepare contingency plans before you get “punched in the face” by reality. This proactive approach to risk management will keep you prepared for any eventuality.

             Dan’s recommendations

             Dan recommends building the habit of scheduled deep thinking. Carve out one or two hours weekly—whether it’s through running or quiet reflection. The practice isn’t just for investing; it sharpens decision-making across life and business.

             No.1 goal for the next 12 months

             Dan’s goal for the next 12 months is to double revenue and triple EBITDA through acquiring and growing new businesses. It’s a bold target, but one grounded in the hard lessons of the past. This time, growth will come with more balance, more discipline, and a stronger focus on sustainability.

             Parting words

              

             “Thank you for having me. Feel free to reach out.”

             Dan Novaes

              

             [spp-transcript]

              

             Connect with Dan Novaes

             • LinkedIn
             • Website
             
             

             Andrew’s books

             • How to Start Building Your Wealth Investing in the Stock Market
             • My Worst Investment Ever
             • 9 Valuation Mistakes and How to Avoid Them
             • Transform Your Business with Dr.Deming’s 14 Points
             
             

             Andrew’s online programs

             • Valuation Master Class
             • The Become a Better Investor Community
             • How to Start Building Your Wealth Investing in the Stock Market
             • Finance Made Ridiculously Simple
             • FVMR Investing: Quantamental Investing Across the World
             • Become a Great Presenter and Increase Your Influence
             • Transform Your Business with Dr. Deming’s 14 Points
             • Achieve Your Goals
             
             

             Connect with Andrew Stotz:

             • astotz.com
             • LinkedIn
             • Facebook
             • Instagram
             • Threads
             • X
             • YouTube
             • My Worst Investment Ever Podcast
             
             ]]>b0a24695-73d6-4fdb-b293-39e87047be2cTue, 09 Sep 2025 06:00:00 +070028:03falsefullDr. Gilbert Guzman – The $1M Lesson I Learned by Not Launching My StartupBIO: Dr. Gilbert  A. Guzmán is a business strategist and systems thinker. He is the founder of IntraQ AI, a SaaS solution designed to eliminate knowledge gaps within the workplace, and the author of Atomic Impact: Systems for Transformative Productivity.

             STORY: In 2012, Gilbert  envisioned a portable charger vending system for airports, universities, and theaters—a “Redbox for power.” He over-engineered, over-researched, and waited for “perfect”—while another company launched the same concept. By the time he moved, they dominated airports with a first-mover advantage.

             LEARNING: Jump in and get things going. Don’t be afraid to fail. Iterate, and get your product to market.

              

             “Don’t be afraid to iterate. Maintain the course, and you’ll see your product through.”

             Dr. Gilbert A. Guzmán

              

             Guest profile

             Dr. Gilbert A. Guzmán is a business strategist and systems thinker. He is the founder of IntraQ AI, a SaaS solution designed to eliminate knowledge gaps within the workplace, and the author of Atomic Impact: Systems for Transformative Productivity, which you can get for free using the code: Stotz.

             With a doctorate in business and experience leading large teams, he helps organizations boost productivity through practical systems built for real-world constraints. His work bridges people, data, and technology for lasting operational success.

             Worst investment ever

             In 2012, Gilbert  envisioned a portable charger vending system for airports, universities, and theaters—a “Redbox for power.” Users would rent charged batteries and return them to kiosks for reuse.

             Ironically, Gilbert is a very impatient man, but when it comes to business ideas, he takes his sweet time, sometimes too long. This is exactly what happened with the portable charger idea.

             Gilbert over-engineered, over-researched, and waited for “perfect”—while Fuel Rod launched the same concept. By the time he moved, they dominated airports with a first-mover advantage. He invented the wheel but didn’t roll it.

             Lessons learned

             • Jump in, do what you need to do, stay up late, work hard, do the research, and get things going. Ultimately, everything will come to fruition.
             • Manage your risks.
             • You can earn back cash, but you can’t earn back lost time.
             • In startups, a bad launch always beats no launch. Waiting for no flaws means 100% flaw: no product.
             • You can’t be a risk-averse leader.
             
             

             Andrew’s takeaways

             • MVPs beat masterpieces because if you’re not embarrassed by the first version of your product, you launched too late.
             • The market doesn’t care who invented a product—it cares who shipped it.
             
             

             Actionable advice

             • Don’t be afraid to fail. Iterate, get your product to market, and find out if it makes sense and is relevant.
             • Don’t get scared of the big names, the Googles of the world, and think that they will crush you.
             • You don’t have to be horizontal. You can go vertical. You can find a niche and dedicate your time to it.
             
             

             Gilbert’s recommendations

             Gilbert recommends his e-book Atomic Impact: Systems for Transformative Productivity (remember to use code Stotz for a free copy).

             He also recommends visiting his website for additional resources. Additionally, reading Edwards Deming’s Out of the Crisis can help you apply systems thinking to your personal and work life, ultimately changing the way you view life, society, and work, and becoming a little more solution-oriented.

             No.1 goal for the next 12 months

             Gilbert’s goal for the next 12 months is to further enhance the success of Atomic Impact and IntraQ AI by creating speaking engagements and workshops that will reinvigorate the concepts he has developed and transform the way people work.

             Parting words

              

             “I appreciate you having me on, Andrew. It’s been a pleasure. I look forward to the future. Go split some atoms.”

             Gilbert

              

             [spp-transcript]

              

             Connect with Dr. Gilbert Guzman

             • LinkedIn
             • Podcast
             • YouTube
             • Blog 
             • Website
             • Books
             
             

             Andrew’s books

             • How to Start Building Your Wealth Investing in the Stock Market
             • My Worst Investment Ever
             • 9 Valuation Mistakes and How to Avoid Them
             • Transform Your Business with Dr.Deming’s 14 Points
             
             

             Andrew’s online programs

             • Valuation Master Class
             • The Become a Better Investor Community
             • How to Start Building Your Wealth Investing in the Stock Market
             • Finance Made Ridiculously Simple
             • FVMR Investing: Quantamental Investing Across the World
             • Become a Great Presenter and Increase Your Influence
             • Transform Your Business with Dr. Deming’s 14 Points
             • Achieve Your Goals
             
             

             Connect with Andrew Stotz:

             • astotz.com
             • LinkedIn
             • Facebook
             • Instagram
             • Threads
             • X
             • YouTube
             • My Worst Investment Ever Podcast
             
             ]]>BIO: Dr. Gilbert  A. Guzmán is a business strategist and systems thinker. He is the founder of IntraQ AI, a SaaS solution designed to eliminate knowledge gaps within the workplace, and the author of Atomic Impact: Systems for Transformative Productivity.

             STORY: In 2012, Gilbert  envisioned a portable charger vending system for airports, universities, and theaters—a “Redbox for power.” He over-engineered, over-researched, and waited for “perfect”—while another company launched the same concept. By the time he moved, they dominated airports with a first-mover advantage.

             LEARNING: Jump in and get things going. Don’t be afraid to fail. Iterate, and get your product to market.

              

             “Don’t be afraid to iterate. Maintain the course, and you’ll see your product through.”

             Dr. Gilbert A. Guzmán

              

             Guest profile

             Dr. Gilbert A. Guzmán is a business strategist and systems thinker. He is the founder of IntraQ AI, a SaaS solution designed to eliminate knowledge gaps within the workplace, and the author of Atomic Impact: Systems for Transformative Productivity, which you can get for free using the code: Stotz.

             With a doctorate in business and experience leading large teams, he helps organizations boost productivity through practical systems built for real-world constraints. His work bridges people, data, and technology for lasting operational success.

             Worst investment ever

             In 2012, Gilbert  envisioned a portable charger vending system for airports, universities, and theaters—a “Redbox for power.” Users would rent charged batteries and return them to kiosks for reuse.

             Ironically, Gilbert is a very impatient man, but when it comes to business ideas, he takes his sweet time, sometimes too long. This is exactly what happened with the portable charger idea.

             Gilbert over-engineered, over-researched, and waited for “perfect”—while Fuel Rod launched the same concept. By the time he moved, they dominated airports with a first-mover advantage. He invented the wheel but didn’t roll it.

             Lessons learned

             • Jump in, do what you need to do, stay up late, work hard, do the research, and get things going. Ultimately, everything will come to fruition.
             • Manage your risks.
             • You can earn back cash, but you can’t earn back lost time.
             • In startups, a bad launch always beats no launch. Waiting for no flaws means 100% flaw: no product.
             • You can’t be a risk-averse leader.
             
             

             Andrew’s takeaways

             • MVPs beat masterpieces because if you’re not embarrassed by the first version of your product, you launched too late.
             • The market doesn’t care who invented a product—it cares who shipped it.
             
             

             Actionable advice

             • Don’t be afraid to fail. Iterate, get your product to market, and find out if it makes sense and is relevant.
             • Don’t get scared of the big names, the Googles of the world, and think that they will crush you.
             • You don’t have to be horizontal. You can go vertical. You can find a niche and dedicate your time to it.
             
             

             Gilbert’s recommendations

             Gilbert recommends his e-book Atomic Impact: Systems for Transformative Productivity (remember to use code Stotz for a free copy).

             He also recommends visiting his website for additional resources. Additionally, reading Edwards Deming’s Out of the Crisis can help you apply systems thinking to your personal and work life, ultimately changing the way you view life, society, and work, and becoming a little more solution-oriented.

             No.1 goal for the next 12 months

             Gilbert’s goal for the next 12 months is to further enhance the success of Atomic Impact and IntraQ AI by creating speaking engagements and workshops that will reinvigorate the concepts he has developed and transform the way people work.

             Parting words

              

             “I appreciate you having me on, Andrew. It’s been a pleasure. I look forward to the future. Go split some atoms.”

             Gilbert

              

             [spp-transcript]

              

             Connect with Dr. Gilbert Guzman

             • LinkedIn
             • Podcast
             • YouTube
             • Blog 
             • Website
             • Books
             
             

             Andrew’s books

             • How to Start Building Your Wealth Investing in the Stock Market
             • My Worst Investment Ever
             • 9 Valuation Mistakes and How to Avoid Them
             • Transform Your Business with Dr.Deming’s 14 Points
             
             

             Andrew’s online programs

             • Valuation Master Class
             • The Become a Better Investor Community
             • How to Start Building Your Wealth Investing in the Stock Market
             • Finance Made Ridiculously Simple
             • FVMR Investing: Quantamental Investing Across the World
             • Become a Great Presenter and Increase Your Influence
             • Transform Your Business with Dr. Deming’s 14 Points
             • Achieve Your Goals
             
             

             Connect with Andrew Stotz:

             • astotz.com
             • LinkedIn
             • Facebook
             • Instagram
             • Threads
             • X
             • YouTube
             • My Worst Investment Ever Podcast
             
             ]]>bf0cecbb-79ff-48e4-b8d2-d90b66dc29a3Tue, 26 Aug 2025 06:00:00 +070047:13falsefullEnrich Your Future Conclusion: Larry’s Timeless Guide to Smarter InvestingIn this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they conclude the lessons from the book.

             LEARNING: Investing isn’t about chasing the next hot stock—it’s about building a resilient, well-diversified portfolio you can live with in good times and bad.

              

             “Once you have enough, stop playing the game as if you don’t. Reduce risk, enjoy life, and make your money serve you—not the other way around.”

             Larry Swedroe

              

             In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

             Larry deeply understands the world of academic research and investing, especially risk. In this series, they conclude on the lessons from the book.

             Enrich Your Future: Larry’s Timeless Guide to Smarter Investing

             If you’ve ever wondered how to cut through the noise of investment hype and build a portfolio that actually works for you, Larry’s Enrich Your Future is the blueprint you’ve been looking for. Here’s a distilled look at the wisdom from his book.

             Start with core principles

             Larry insists there are only a handful of fundamental truths in investing—and if you master them, you’ll avoid most costly mistakes:

             • Markets are highly efficient – While not perfect, markets price assets so effectively that consistently beating them on a risk-adjusted basis is near impossible. So don’t engage in individual security selection or market timing.
             • All risk assets offer similar risk-adjusted returns – Whether it’s US stocks, Thai stocks, or corporate bonds, the relationship between risk and return holds steady over time. Invest in assets based upon your ability, willingness, and need to take risks. If you’re willing to take more risk and have the ability and maybe the need to, then you can load up on more risky, higher expected-returning assets. It doesn’t mean they’re better assets; rather, they have higher expected returns at the cost of higher risk.
             • Diversification is non-negotiable – Since all risk assets have similar risk-adjusted returns, it makes no sense to concentrate all of your risk in one basket. Concentrating your risk in a single asset class or geography is a recipe for trouble.
             
             

             Build a portfolio that fits YOU

             Forget cookie-cutter solutions—Larry believes the “right” portfolio depends on three factors:

             1. Ability to take risk – Your financial capacity to weather market downturns is influenced by factors like investment horizon and job stability.
             2. Willingness to take risk – Your psychological comfort level with market volatility.
             3. Need to take risk – Whether you require high returns to meet your financial goals.
             
             

             Larry’s rule? Let the lowest of these three determine your equity exposure. If you don’t need to take big risks, don’t.

             Think global, but stay rational

             A total global market portfolio is an ideal starting point—currently about 65% US, 27% developed international, and 8% emerging markets. Adjust only slightly if you have a reasoned view, but avoid drastic tilts that imply you “know better” than the market.

             Beyond stocks and bonds

             Larry is a big believer in alternative investments—if you can access them at reasonable costs. These include:

             • Private credit – Lending directly to companies, often with double-digit returns and lower volatility than equities.
             • Reinsurance – Returns tied to natural disaster risks, uncorrelated with stock markets.
             • Infrastructure funds – Assets like toll roads, dams, and utilities with stable cash flows.
             
             

             His own portfolio now includes a significant allocation to alternatives, reducing reliance on traditional stocks and bonds.

             Focus on risk sources, not just labels

             Instead of obsessing over “asset classes,” Larry advises analysing the risks each investment brings—economic cycle risk, credit risk, inflation risk—and blending assets with low correlations to one another.

             Integrate factors, don’t isolate them

             While factor investing (such as value, small-cap, quality, and momentum) is powerful, buying single-factor funds separately can create costly and contradictory trades. Larry favours integrated factor funds that combine multiple factors into one systematic strategy, reducing costs and improving efficiency.

             Master your behaviour

             Even the best portfolio fails if you can’t stick with it. Larry warns that there is no one right portfolio. The right portfolio for you is the one you are most likely to stick with.

             That means:

             • Avoid assets you can’t hold for at least 10–15 years.
             • Expect long stretches of underperformance from every risk asset.
             • Continue to buy during downturns to maintain your target allocation.
             
             

             Don’t DIY unless you’re truly qualified

             Less than 1% of investors have the skill, time, and emotional discipline to manage their investments entirely on their own. Larry recommends working with a true fiduciary adviser—one who:

             • Is paid only by you (no commissions).
             • Invests in the same funds they recommend.
             • Backs every decision with empirical evidence.
             
             

             Education beats ignorance every time

             You don’t need to read all 18 of Larry’s books, but three or four will give you the foundational knowledge to make better decisions. Investing ignorance, he warns, is far costlier than the price of a good book.

             The takeaway

             Enrich Your Future: The Keys to Successful Investing isn’t about chasing the next hot stock—it’s about building a resilient, well-diversified portfolio you can live with in good times and bad. Follow Larry’s principles, and you’ll not only protect your wealth but also position yourself for long-term financial peace of mind.

             As Larry himself says:

             “Once you have enough, stop playing the game as if you don’t. Reduce risk, enjoy life, and make your money serve you—not the other way around.”

             Did you miss out on the previous chapters? Check them out:

             Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

             • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
             • Enrich Your Future 02: How Markets Set Prices
             • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
             • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
             • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
             • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
             • Enrich Your Future 07: The Value of Security Analysis
             • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
             • Enrich Your Future 09: The Fed Model and the Money Illusion
             
             

             Part II: Strategic Portfolio Decisions

             • In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they conclude the lessons from the book.

               LEARNING: Investing isn’t about chasing the next hot stock—it’s about building a resilient, well-diversified portfolio you can live with in good times and bad.

                

               “Once you have enough, stop playing the game as if you don’t. Reduce risk, enjoy life, and make your money serve you—not the other way around.”

               Larry Swedroe

                

               In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

               Larry deeply understands the world of academic research and investing, especially risk. In this series, they conclude on the lessons from the book.

               Enrich Your Future: Larry’s Timeless Guide to Smarter Investing

               If you’ve ever wondered how to cut through the noise of investment hype and build a portfolio that actually works for you, Larry’s Enrich Your Future is the blueprint you’ve been looking for. Here’s a distilled look at the wisdom from his book.

               Start with core principles

               Larry insists there are only a handful of fundamental truths in investing—and if you master them, you’ll avoid most costly mistakes:

               • Markets are highly efficient – While not perfect, markets price assets so effectively that consistently beating them on a risk-adjusted basis is near impossible. So don’t engage in individual security selection or market timing.
               • All risk assets offer similar risk-adjusted returns – Whether it’s US stocks, Thai stocks, or corporate bonds, the relationship between risk and return holds steady over time. Invest in assets based upon your ability, willingness, and need to take risks. If you’re willing to take more risk and have the ability and maybe the need to, then you can load up on more risky, higher expected-returning assets. It doesn’t mean they’re better assets; rather, they have higher expected returns at the cost of higher risk.
               • Diversification is non-negotiable – Since all risk assets have similar risk-adjusted returns, it makes no sense to concentrate all of your risk in one basket. Concentrating your risk in a single asset class or geography is a recipe for trouble.
               
               

               Build a portfolio that fits YOU

               Forget cookie-cutter solutions—Larry believes the “right” portfolio depends on three factors:

               1. Ability to take risk – Your financial capacity to weather market downturns is influenced by factors like investment horizon and job stability.
               2. Willingness to take risk – Your psychological comfort level with market volatility.
               3. Need to take risk – Whether you require high returns to meet your financial goals.
               
               

               Larry’s rule? Let the lowest of these three determine your equity exposure. If you don’t need to take big risks, don’t.

               Think global, but stay rational

               A total global market portfolio is an ideal starting point—currently about 65% US, 27% developed international, and 8% emerging markets. Adjust only slightly if you have a reasoned view, but avoid drastic tilts that imply you “know better” than the market.

               Beyond stocks and bonds

               Larry is a big believer in alternative investments—if you can access them at reasonable costs. These include:

               • Private credit – Lending directly to companies, often with double-digit returns and lower volatility than equities.
               • Reinsurance – Returns tied to natural disaster risks, uncorrelated with stock markets.
               • Infrastructure funds – Assets like toll roads, dams, and utilities with stable cash flows.
               
               

               His own portfolio now includes a significant allocation to alternatives, reducing reliance on traditional stocks and bonds.

               Focus on risk sources, not just labels

               Instead of obsessing over “asset classes,” Larry advises analysing the risks each investment brings—economic cycle risk, credit risk, inflation risk—and blending assets with low correlations to one another.

               Integrate factors, don’t isolate them

               While factor investing (such as value, small-cap, quality, and momentum) is powerful, buying single-factor funds separately can create costly and contradictory trades. Larry favours integrated factor funds that combine multiple factors into one systematic strategy, reducing costs and improving efficiency.

               Master your behaviour

               Even the best portfolio fails if you can’t stick with it. Larry warns that there is no one right portfolio. The right portfolio for you is the one you are most likely to stick with.

               That means:

               • Avoid assets you can’t hold for at least 10–15 years.
               • Expect long stretches of underperformance from every risk asset.
               • Continue to buy during downturns to maintain your target allocation.
               
               

               Don’t DIY unless you’re truly qualified

               Less than 1% of investors have the skill, time, and emotional discipline to manage their investments entirely on their own. Larry recommends working with a true fiduciary adviser—one who:

               • Is paid only by you (no commissions).
               • Invests in the same funds they recommend.
               • Backs every decision with empirical evidence.
               
               

               Education beats ignorance every time

               You don’t need to read all 18 of Larry’s books, but three or four will give you the foundational knowledge to make better decisions. Investing ignorance, he warns, is far costlier than the price of a good book.

               The takeaway

               Enrich Your Future: The Keys to Successful Investing isn’t about chasing the next hot stock—it’s about building a resilient, well-diversified portfolio you can live with in good times and bad. Follow Larry’s principles, and you’ll not only protect your wealth but also position yourself for long-term financial peace of mind.

               As Larry himself says:

               “Once you have enough, stop playing the game as if you don’t. Reduce risk, enjoy life, and make your money serve you—not the other way around.”

               Did you miss out on the previous chapters? Check them out:

               Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

               • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
               • Enrich Your Future 02: How Markets Set Prices
               • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
               • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
               • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
               • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
               • Enrich Your Future 07: The Value of Security Analysis
               • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
               • Enrich Your Future 09: The Fed Model and the Money Illusion
               
               

               Part II: Strategic Portfolio Decisions

               • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
               • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
               • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
               • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
               • Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
               • Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
               • Enrich Your Future 16: The Estimated Return Is Not Inevitable
               • Enrich Your Future 17: Take a Portfolio Approach to Your Investments
               • Enrich Your Future 18: Build a Portfolio That Can Withstand the Black Swans
               • Enrich Your Future 19: The Gold Illusion: Why Investing in Gold May Not Be Safe
               • Enrich Your Future 20: Passive Investing Is the Key to Prudent Wealth Management
               
               

               Part III: Behavioral Finance: We Have Met the Enemy and He Is Us

               • Enrich Your Future 21: Think You Can Beat the Market? Think Again
               • Enrich Your Future 22: Some Risks Are Not Worth Taking
               • Enrich Your Future 23: Seeing Through the Frame: Making Better Investment Decisions
               • Enrich Your Future 24: Why Smart People Do Dumb Things
               • Enrich Your Future 25: Stock Crashes Happen—Be Prepared
               • Enrich Your Future 26: Should You Invest Now or Spread It Out?
               • Enrich Your Future 27: Pascal’s Wager: Betting on Consequences Over Probabilities
               • Enrich Your Future 28 & 29: How to Outsmart Your Investing Biases
               • Enrich Your Future 30: The Hidden Cost of Chasing Dividend Stocks
               • Enrich Your Future 31: Risk vs. Uncertainty: The Investor’s Blind Spot
               
               

               Part IV: Playing the Winner’s Game in Life and Investing

               • Enrich Your Future 32: Trying to Beat the Market Is a Fool’s Errand
               • Enrich Your Future 33: The Market Doesn’t Care How Smart You Are
               • Enrich Your Future 34: Embrace the Bear: Why Market Crashes Are Your Silent Ally
               • Enrich Your Future 35: Market Gurus Are Just Expensive Entertainers
               • Enrich Your Future 36: The Madness of Crowded Trades
               • Enrich Your Future 37 & 38: The Calendar Is a Crook & Hot Funds Are a Trap
               • Enrich Your Future 39: More Wealth Does Not Give You More Happiness
               • Enrich Your Future 40: Why Passive Investing Gives You Back What Wall Street Steals
               • Enrich Your Future 41 & 42: DIY Investing or Hire an Advisor? How to Avoid the Costliest Mistakes
               
               

               About Larry Swedroe

               Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

               Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

               Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

               Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                

               [spp-transcript]

                

               Connect with Larry Swedroe

               • LinkedIn
               • X
               • Website
               • Books
               
               

               Andrew’s books

               • How to Start Building Your Wealth Investing in the Stock Market
               • My Worst Investment Ever
               • 9 Valuation Mistakes and How to Avoid Them
               • Transform Your Business with Dr.Deming’s 14 Points
               
               

               Andrew’s online programs

               • Valuation Master...]]>0976c452-d552-4af9-8d95-d8dd8a942f4aTue, 19 Aug 2025 06:00:00 +070001:00:40falsefullEnrich Your Future 41 & 42: DIY Investing or Hire an Advisor? How to Avoid the Costliest MistakesIn this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 41: A Tale of Two Strategies and Chapter 42: How to Identify an Advisor You Can Trust.

                 LEARNING: Passive investing is still the winner. If something is worth doing, it’s worth paying someone to do it for you.

                  

                 “A good wealth advisor helps you build a plan and choose the best investment vehicles that’ll give you the best chance of achieving your life and financial goals.”

                 Larry Swedroe

                  

                 In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                 Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 41: A Tale of Two Strategies and Chapter 42: How to Identify an Advisor You Can Trust.

                 Chapter 41: A Tale of Two Strategies

                 In Chapter 41, Larry explains why investors who have implemented the types of passive strategies recommended in his book have experienced “the best of times.” On the other hand, for those who continue to play the game of active investing, it has generally been the “worst of times.”

                 “It was the best of times, it was the worst of times.” Charles Dickens may have been writing about the French Revolution, but Larry observes that that line rings true for today’s investors, too. Depending on how you approach the market, your experience can feel like either a triumph or a disaster.

                 If you’re betting on active management, it’s the worst of times

                 According to Larry, people who still believe in the promise of active fund managers as the winning strategy are likely to find themselves in the “season of Darkness.” Over the years, the ability of active managers to consistently outperform has dwindled significantly.

                 You may be surprised to learn that in 1998, when Charles Ellis wrote his famous book “Winning the Loser’s Game”, about 20% of actively managed funds produced statistically significant returns after adjusting for risk. That figure was already discouraging.

                 A later study in 2014 (Conviction in Equity Investing) found that the percentage of managers producing any net alpha had dropped from 20% in 1993 to just 1.6%.

                 Larry reminds investors who are holding on to the hope that active management will deliver the goods that they are swimming against a strong current. The odds aren’t in their favour—and neither are the expenses.

                 It’s the best of times for passive investors

                 If you’ve embraced passive investing, it’s the best of times. The resounding success of this strategy, backed by a wealth of data and real-world results, should instill a strong sense of confidence in your investment decisions.

                 For investors who believe that markets are efficient and that passive investing is the winning strategy, it has been the best of times. The availability of passively managed funds—index funds, exchange-traded funds (ETFs), and passive asset class funds-has dramatically increased. These funds cover a broader range of asset classes and factors, giving you more effective tools to diversify your portfolio.

                 Passive funds are not only inherently more tax-efficient because of their low turnover, but some are also specifically managed with tax efficiency in mind. And if you’re using ETF versions, they become even more efficient.

                 Then there’s the cost. Famous fund companies like BlackRock, Vanguard, and Fidelity are in fierce competition for your investment dollars. That competition has driven expense ratios down dramatically.

                 Chapter 42: How to Identify an Advisor You Can Trust

                 In Chapter 42, Larry provides guidance to those investors who believe they are best served by working with a financial advisor. He shares a roadmap to help them identify one they can trust.

                 In Larry’s opinion, investing is like home repairs.

                 There are two types of people: the do-it-yourselfers and those who hire professionals. You might fall into the DIY camp because you believe you can save money or because you enjoy the process.

                 But, Larry adds, some people who try to do it themselves simply shouldn’t. If you don’t have the right skills, the cost of fixing mistakes can be much greater than hiring a professional in the first place.

                 The Swedroe Principle

                 Here’s where Larry’s encouragement to use the Swedroe Principle comes in: If something is worth doing, it’s worth paying someone to do it for you. The Swedroe Principle advocates for the use of professional financial advisors for tasks that are complex or require specialized knowledge. This advice can empower you to make confident investment decisions.

                 You may value your free time. Maybe you just don’t enjoy managing investments. Or maybe, like many, you’ve come to realize that if something can be messed up, you’ll find a way to do it. Whatever the reason, Larry says it’s okay to admit that managing your finances on your own may not be the best route.

                 Studies show that few individuals possess both the knowledge and the discipline needed to be successful investors. If investing were compared to home repair skills, DIY investors would likely fare worse than DIY handypersons. And the financial consequences of poor investment decisions can be far greater than the cost of fixing a leaky faucet.

                 On the other hand, if you do recognize your limitations, you can still come out ahead—if you choose the right financial advisor.

                 How to identify a financial advisor you can trust

                 Choosing a financial advisor, Larry emphasizes, is one of the most important decisions you’ll ever make. Surveys show that, in addition to financial expertise, trust is at the top of the list of what people want in an advisor.

                 Trust is intangible and hard to measure, but it’s crucial. That’s why it’s important to ask the right questions and insist on the right commitments when choosing an advisor.

                 Larry shares a checklist to guide your decision. He says when interviewing an advisor, ask them to commit to the following:

                 1. Client-first philosophy: The advisor should demonstrate that their core principle is to act in your best interest.
                 2. Fiduciary duty: They must follow a fiduciary standard, the highest legal duty of care, which is very different from the “suitability standard” used by many brokers.
                 3. Fee-only compensation: They should earn no commissions—just fees paid directly by you. This avoids the temptation to recommend products that benefit them more than you.
                 4. Full disclosure: Any potential conflicts of interest must be clearly disclosed.
                 5. Evidence-based advice: Their investment philosophy should be grounded in rigorous academic research—not guesswork or opinions.
                 6. Client-centric service: Their only goal in offering solutions should be to serve your best interest.
                 7. Personal attention: They should build a strong personal relationship with you and provide access to a team of professionals.
                 8. Skin in the game: They should invest their own money based on the same principles they recommend to you.
                 9. Integrated planning: They should help you develop a plan that includes investments, estate planning, taxes, and risk management tailored to your unique needs.
                 10. Goal-oriented decisions: Every recommendation should be made with your long-term success in mind.
                 11. Qualified professionals: The people advising you should hold respected credentials like CFP, PFS, or similar.
                 
                 

                 Further reading

                 1. Eugene Fama and Kenneth French, “Luck versus Skill in the Cross-Section of Mutual Fund Returns,” The Journal of Finance (October 2010).
                 2. Mike Sebastian and Sudhakar Attaluri, “Conviction in Equity Investing,” The Journal of Portfolio Management (Summer 2014).
                 
                 

                 Did you miss out on the previous chapters? Check them out:

                 Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                 • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and...]]>In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 41: A Tale of Two Strategies and Chapter 42: How to Identify an Advisor You Can Trust.

                   LEARNING: Passive investing is still the winner. If something is worth doing, it’s worth paying someone to do it for you.

                    

                   “A good wealth advisor helps you build a plan and choose the best investment vehicles that’ll give you the best chance of achieving your life and financial goals.”

                   Larry Swedroe

                    

                   In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                   Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 41: A Tale of Two Strategies and Chapter 42: How to Identify an Advisor You Can Trust.

                   Chapter 41: A Tale of Two Strategies

                   In Chapter 41, Larry explains why investors who have implemented the types of passive strategies recommended in his book have experienced “the best of times.” On the other hand, for those who continue to play the game of active investing, it has generally been the “worst of times.”

                   “It was the best of times, it was the worst of times.” Charles Dickens may have been writing about the French Revolution, but Larry observes that that line rings true for today’s investors, too. Depending on how you approach the market, your experience can feel like either a triumph or a disaster.

                   If you’re betting on active management, it’s the worst of times

                   According to Larry, people who still believe in the promise of active fund managers as the winning strategy are likely to find themselves in the “season of Darkness.” Over the years, the ability of active managers to consistently outperform has dwindled significantly.

                   You may be surprised to learn that in 1998, when Charles Ellis wrote his famous book “Winning the Loser’s Game”, about 20% of actively managed funds produced statistically significant returns after adjusting for risk. That figure was already discouraging.

                   A later study in 2014 (Conviction in Equity Investing) found that the percentage of managers producing any net alpha had dropped from 20% in 1993 to just 1.6%.

                   Larry reminds investors who are holding on to the hope that active management will deliver the goods that they are swimming against a strong current. The odds aren’t in their favour—and neither are the expenses.

                   It’s the best of times for passive investors

                   If you’ve embraced passive investing, it’s the best of times. The resounding success of this strategy, backed by a wealth of data and real-world results, should instill a strong sense of confidence in your investment decisions.

                   For investors who believe that markets are efficient and that passive investing is the winning strategy, it has been the best of times. The availability of passively managed funds—index funds, exchange-traded funds (ETFs), and passive asset class funds-has dramatically increased. These funds cover a broader range of asset classes and factors, giving you more effective tools to diversify your portfolio.

                   Passive funds are not only inherently more tax-efficient because of their low turnover, but some are also specifically managed with tax efficiency in mind. And if you’re using ETF versions, they become even more efficient.

                   Then there’s the cost. Famous fund companies like BlackRock, Vanguard, and Fidelity are in fierce competition for your investment dollars. That competition has driven expense ratios down dramatically.

                   Chapter 42: How to Identify an Advisor You Can Trust

                   In Chapter 42, Larry provides guidance to those investors who believe they are best served by working with a financial advisor. He shares a roadmap to help them identify one they can trust.

                   In Larry’s opinion, investing is like home repairs.

                   There are two types of people: the do-it-yourselfers and those who hire professionals. You might fall into the DIY camp because you believe you can save money or because you enjoy the process.

                   But, Larry adds, some people who try to do it themselves simply shouldn’t. If you don’t have the right skills, the cost of fixing mistakes can be much greater than hiring a professional in the first place.

                   The Swedroe Principle

                   Here’s where Larry’s encouragement to use the Swedroe Principle comes in: If something is worth doing, it’s worth paying someone to do it for you. The Swedroe Principle advocates for the use of professional financial advisors for tasks that are complex or require specialized knowledge. This advice can empower you to make confident investment decisions.

                   You may value your free time. Maybe you just don’t enjoy managing investments. Or maybe, like many, you’ve come to realize that if something can be messed up, you’ll find a way to do it. Whatever the reason, Larry says it’s okay to admit that managing your finances on your own may not be the best route.

                   Studies show that few individuals possess both the knowledge and the discipline needed to be successful investors. If investing were compared to home repair skills, DIY investors would likely fare worse than DIY handypersons. And the financial consequences of poor investment decisions can be far greater than the cost of fixing a leaky faucet.

                   On the other hand, if you do recognize your limitations, you can still come out ahead—if you choose the right financial advisor.

                   How to identify a financial advisor you can trust

                   Choosing a financial advisor, Larry emphasizes, is one of the most important decisions you’ll ever make. Surveys show that, in addition to financial expertise, trust is at the top of the list of what people want in an advisor.

                   Trust is intangible and hard to measure, but it’s crucial. That’s why it’s important to ask the right questions and insist on the right commitments when choosing an advisor.

                   Larry shares a checklist to guide your decision. He says when interviewing an advisor, ask them to commit to the following:

                   1. Client-first philosophy: The advisor should demonstrate that their core principle is to act in your best interest.
                   2. Fiduciary duty: They must follow a fiduciary standard, the highest legal duty of care, which is very different from the “suitability standard” used by many brokers.
                   3. Fee-only compensation: They should earn no commissions—just fees paid directly by you. This avoids the temptation to recommend products that benefit them more than you.
                   4. Full disclosure: Any potential conflicts of interest must be clearly disclosed.
                   5. Evidence-based advice: Their investment philosophy should be grounded in rigorous academic research—not guesswork or opinions.
                   6. Client-centric service: Their only goal in offering solutions should be to serve your best interest.
                   7. Personal attention: They should build a strong personal relationship with you and provide access to a team of professionals.
                   8. Skin in the game: They should invest their own money based on the same principles they recommend to you.
                   9. Integrated planning: They should help you develop a plan that includes investments, estate planning, taxes, and risk management tailored to your unique needs.
                   10. Goal-oriented decisions: Every recommendation should be made with your long-term success in mind.
                   11. Qualified professionals: The people advising you should hold respected credentials like CFP, PFS, or similar.
                   
                   

                   Further reading

                   1. Eugene Fama and Kenneth French, “Luck versus Skill in the Cross-Section of Mutual Fund Returns,” The Journal of Finance (October 2010).
                   2. Mike Sebastian and Sudhakar Attaluri, “Conviction in Equity Investing,” The Journal of Portfolio Management (Summer 2014).
                   
                   

                   Did you miss out on the previous chapters? Check them out:

                   Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                   • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                   • Enrich Your Future 02: How Markets Set Prices
                   • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                   • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                   • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                   • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                   • Enrich Your Future 07: The Value of Security Analysis
                   • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                   • Enrich Your Future 09: The Fed Model and the Money Illusion
                   
                   

                   Part II: Strategic Portfolio Decisions

                   • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                   • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                   • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                   • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                   • Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
                   • Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
                   • Enrich Your Future 16: The Estimated Return Is Not Inevitable
                   • Enrich Your Future 17: Take a Portfolio Approach to Your Investments
                   • Enrich Your Future 18: Build a Portfolio That Can Withstand the Black Swans
                   • Enrich Your Future 19: The Gold Illusion: Why Investing in Gold May Not Be Safe
                   • Enrich Your Future 20: Passive Investing Is the Key to Prudent Wealth Management
                   
                   

                   Part III: Behavioral Finance: We Have Met the Enemy and He Is Us

                   • Enrich Your Future 21: Think You Can Beat the Market? Think Again
                   • Enrich Your Future 22: Some Risks Are Not Worth Taking
                   • Enrich Your Future 23: Seeing Through the Frame: Making Better Investment Decisions
                   • Enrich Your Future 24: Why Smart People Do Dumb Things
                   • Enrich Your Future 25: Stock Crashes Happen—Be Prepared
                   • Enrich Your Future 26: Should You Invest Now or Spread It Out?
                   • Enrich Your Future 27: Pascal’s Wager: Betting on Consequences Over Probabilities
                   • Enrich Your Future 28 & 29: How to Outsmart Your Investing Biases
                   • Enrich Your Future 30: The Hidden Cost of Chasing Dividend Stocks
                   • Enrich Your Future 31: Risk vs. Uncertainty: The Investor’s Blind Spot
                   
                   

                   Part IV: Playing the Winner’s Game in Life and Investing

                   • Enrich Your Future 32: Trying to Beat the Market Is a Fool’s Errand
                   • Enrich Your Future 33: The Market Doesn’t Care How Smart You Are
                   • Enrich Your Future 34: Embrace the Bear: Why Market Crashes Are Your Silent Ally
                   • Enrich Your Future 35: Market Gurus Are Just Expensive Entertainers
                   • Enrich Your Future 36: The Madness of Crowded Trades
                   • Enrich Your Future 37 & 38: The Calendar Is a Crook & Hot Funds Are a Trap
                   • Enrich Your Future 39: More Wealth Does Not Give You More Happiness
                   • Enrich Your Future 40: Why Passive Investing Gives You Back What Wall Street Steals
                   
                   

                   About Larry Swedroe

                   Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                   Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                   Larry’s dedication to helping others has made him a sought-after national speaker. He has made...]]>54c1c177-3176-4ab3-8d63-3eb930724ccdTue, 12 Aug 2025 06:00:00 +070030:42falsefullPieter Slegers – A Teen’s Investing Nightmare Becomes His Greatest TeacherBIO: Pieter Slegers is the founder of Compounding Quality Newsletter. Pieter worked for three years as a Belgian asset manager before focusing full-time on his investment newsletter, Compounding Quality, in July 2022. Compounding Quality has over 1 million followers across social media and nearly 500,000 email subscribers. The goal of the newsletter is to help other investors by focusing on Quality Investing.

                   STORY: At the age of 13, Peter convinced his parents to open a brokerage account. He picked the broker’s newest “hottest pick” stock—an oil/gas transport company. He invested everything, thinking the people running the company knew what they were doing. Weeks later, the 2008 financial crisis hit. Peter sold his stock after a year, taking a 60% loss.

                   LEARNING: Small losses are better than catastrophic ones. Knowledge is your only edge.

                    

                   “People who invest in individual stocks will make mistakes. There’s no doubt about that, but it’s way better to make a mistake with a few hundred dollars compared to $100,000.”

                   Pieter Slegers

                    

                   Guest profile

                   Pieter Slegers is the founder of Compounding Quality Newsletter. Pieter studied Financial Management at the KULeuven and graduated summa cum laude. He worked for three years as a Belgian asset manager before focusing full-time on his investment newsletter, Compounding Quality, in July 2022. Compounding Quality has over 1 million followers across social media and nearly 500,000 email subscribers. The goal of the newsletter is to help other investors by focusing on Quality Investing.

                   Worst investment ever

                   At the age of 13, Peter earned his first paycheck by stocking shelves at a supermarket. Eager to grow his savings, he persuaded his parents to open a brokerage account (a feat for minors in Belgium).

                   Despite his lack of investing knowledge, he diligently explored his broker’s platform for ideas. A new stock caught his eye on the broker’s “hot picks” list—an oil/gas transport company. He invested all his earnings, believing in the company’s potential.

                   Peter didn’t conduct any research, despite his limited knowledge of oil and gas and his complete lack of investing experience. He simply trusted the “hot pick”.

                   The crash

                   Weeks later, the 2008 financial crisis hit. Peter sold his stock after a year, taking a 60% loss. His family was not impressed by his poor investment skills and told him that investing was akin to gambling, and he should consider working for the government instead.

                   Pieter felt like such a failure. However, that $300 loss was his best investment. It hurt, but it taught him never to follow others blindly.

                   Lessons learned

                   • Small losses are better than catastrophic ones. Losing $300 at the age of 13 beats losing $300,000 when you’re 40. Early pain builds immunity to big mistakes.
                   • Knowledge is your only edge: If you don’t understand how a company makes money, you’re gambling, not investing.
                   • Failure fuels obsession. That loss made Pieter devour investing books, 10-Ks, and financial news. Pain became his mentor.
                   
                   

                   Andrew’s takeaways

                   • Allow young investors to make mistakes with small sums (e.g., companies they understand, such as Netflix or Coca-Cola).
                   • Humility beats hubris. 90% of professional investors at Goldman Sachs underperform. What makes you different? It’s your checklists, not confidence.
                   • Read biographies, study market history, and connect patterns. Wisdom compounds like interest.
                   
                   

                   Actionable advice

                   For parents guiding young investors, start with brands that they are familiar with and use in their daily lives, such as Coca-Cola, Netflix, and McDonald’s. When they drink a Coke, say: “You own a piece of this.”

                   Cap play money at 5% and limit high-risk bets to cash they can afford to lose. Encourage young investors to do their homework. If they can’t explain the business model in two sentences, they shouldn’t own it.

                   Pieter’s recommendations

                   Pieter recommends reading What I Learned About Investing From Darwin by Pulak Prasad if you want to perfect your investment skills. He also offers numerous free resources on CompoundingQuality.net.

                   Learning from others’ experiences, whether through books, online resources, or personal advice, is a valuable way to improve your own investing skills.

                   No.1 goal for the next 12 months

                   Pieter’s goal for the next 12 months is to continue his learning journey by reading books, listening to podcasts, and engaging in other educational activities. He understands that continuous learning is the key to successful investing.

                   Parting words

                    

                   “It’s amazing what Andrew is doing. I had a lovely time. Please give him a hand, send him an email, or support him in any way you can. If people have questions for me, I’m always happy to help via combining quality.”

                   Pieter Slegers

                    

                   [spp-transcript]

                    

                   Connect with Pieter Slegers

                   • LinkedIn 
                   • Website
                   
                   

                   Andrew’s books

                   • How to Start Building Your Wealth Investing in the Stock Market
                   • My Worst Investment Ever
                   • 9 Valuation Mistakes and How to Avoid Them
                   • Transform Your Business with Dr.Deming’s 14 Points
                   
                   

                   Andrew’s online programs

                   • Valuation Master Class
                   • The Become a Better Investor Community
                   • How to Start Building Your Wealth Investing in the Stock Market
                   • Finance Made Ridiculously Simple
                   • FVMR Investing: Quantamental Investing Across the World
                   • Become a Great Presenter and Increase Your Influence
                   • Transform Your Business with Dr. Deming’s 14 Points
                   • Achieve Your Goals
                   
                   

                   Connect with Andrew Stotz:

                   • astotz.com
                   • LinkedIn
                   • Facebook
                   • Instagram
                   • Threads
                   • X
                   • YouTube
                   • My Worst Investment Ever Podcast
                   
                   ]]>BIO: Pieter Slegers is the founder of Compounding Quality Newsletter. Pieter worked for three years as a Belgian asset manager before focusing full-time on his investment newsletter, Compounding Quality, in July 2022. Compounding Quality has over 1 million followers across social media and nearly 500,000 email subscribers. The goal of the newsletter is to help other investors by focusing on Quality Investing.

                   STORY: At the age of 13, Peter convinced his parents to open a brokerage account. He picked the broker’s newest “hottest pick” stock—an oil/gas transport company. He invested everything, thinking the people running the company knew what they were doing. Weeks later, the 2008 financial crisis hit. Peter sold his stock after a year, taking a 60% loss.

                   LEARNING: Small losses are better than catastrophic ones. Knowledge is your only edge.

                    

                   “People who invest in individual stocks will make mistakes. There’s no doubt about that, but it’s way better to make a mistake with a few hundred dollars compared to $100,000.”

                   Pieter Slegers

                    

                   Guest profile

                   Pieter Slegers is the founder of Compounding Quality Newsletter. Pieter studied Financial Management at the KULeuven and graduated summa cum laude. He worked for three years as a Belgian asset manager before focusing full-time on his investment newsletter, Compounding Quality, in July 2022. Compounding Quality has over 1 million followers across social media and nearly 500,000 email subscribers. The goal of the newsletter is to help other investors by focusing on Quality Investing.

                   Worst investment ever

                   At the age of 13, Peter earned his first paycheck by stocking shelves at a supermarket. Eager to grow his savings, he persuaded his parents to open a brokerage account (a feat for minors in Belgium).

                   Despite his lack of investing knowledge, he diligently explored his broker’s platform for ideas. A new stock caught his eye on the broker’s “hot picks” list—an oil/gas transport company. He invested all his earnings, believing in the company’s potential.

                   Peter didn’t conduct any research, despite his limited knowledge of oil and gas and his complete lack of investing experience. He simply trusted the “hot pick”.

                   The crash

                   Weeks later, the 2008 financial crisis hit. Peter sold his stock after a year, taking a 60% loss. His family was not impressed by his poor investment skills and told him that investing was akin to gambling, and he should consider working for the government instead.

                   Pieter felt like such a failure. However, that $300 loss was his best investment. It hurt, but it taught him never to follow others blindly.

                   Lessons learned

                   • Small losses are better than catastrophic ones. Losing $300 at the age of 13 beats losing $300,000 when you’re 40. Early pain builds immunity to big mistakes.
                   • Knowledge is your only edge: If you don’t understand how a company makes money, you’re gambling, not investing.
                   • Failure fuels obsession. That loss made Pieter devour investing books, 10-Ks, and financial news. Pain became his mentor.
                   
                   

                   Andrew’s takeaways

                   • Allow young investors to make mistakes with small sums (e.g., companies they understand, such as Netflix or Coca-Cola).
                   • Humility beats hubris. 90% of professional investors at Goldman Sachs underperform. What makes you different? It’s your checklists, not confidence.
                   • Read biographies, study market history, and connect patterns. Wisdom compounds like interest.
                   
                   

                   Actionable advice

                   For parents guiding young investors, start with brands that they are familiar with and use in their daily lives, such as Coca-Cola, Netflix, and McDonald’s. When they drink a Coke, say: “You own a piece of this.”

                   Cap play money at 5% and limit high-risk bets to cash they can afford to lose. Encourage young investors to do their homework. If they can’t explain the business model in two sentences, they shouldn’t own it.

                   Pieter’s recommendations

                   Pieter recommends reading What I Learned About Investing From Darwin by Pulak Prasad if you want to perfect your investment skills. He also offers numerous free resources on CompoundingQuality.net.

                   Learning from others’ experiences, whether through books, online resources, or personal advice, is a valuable way to improve your own investing skills.

                   No.1 goal for the next 12 months

                   Pieter’s goal for the next 12 months is to continue his learning journey by reading books, listening to podcasts, and engaging in other educational activities. He understands that continuous learning is the key to successful investing.

                   Parting words

                    

                   “It’s amazing what Andrew is doing. I had a lovely time. Please give him a hand, send him an email, or support him in any way you can. If people have questions for me, I’m always happy to help via combining quality.”

                   Pieter Slegers

                    

                   [spp-transcript]

                    

                   Connect with Pieter Slegers

                   • LinkedIn 
                   • Website
                   
                   

                   Andrew’s books

                   • How to Start Building Your Wealth Investing in the Stock Market
                   • My Worst Investment Ever
                   • 9 Valuation Mistakes and How to Avoid Them
                   • Transform Your Business with Dr.Deming’s 14 Points
                   
                   

                   Andrew’s online programs

                   • Valuation Master Class
                   • The Become a Better Investor Community
                   • How to Start Building Your Wealth Investing in the Stock Market
                   • Finance Made Ridiculously Simple
                   • FVMR Investing: Quantamental Investing Across the World
                   • Become a Great Presenter and Increase Your Influence
                   • Transform Your Business with Dr. Deming’s 14 Points
                   • Achieve Your Goals
                   
                   

                   Connect with Andrew Stotz:

                   • astotz.com
                   • LinkedIn
                   • Facebook
                   • Instagram
                   • Threads
                   • X
                   • YouTube
                   • My Worst Investment Ever Podcast
                   
                   ]]>e153fe45-a520-4132-83b9-895ae61ba2b0Tue, 05 Aug 2025 06:00:00 +070039:50falsefullEnrich Your Future 40: Why Passive Investing Gives You Back What Wall Street StealsIn this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 40: The Big Rocks.

                   LEARNING: Passive investing will give you the freedom you need.

                    

                   “Indexing and passive investing have the ‘disadvantage’ of being boring. I admit it. However, if anyone needs to get their excitement in life from investing, I’d suggest they might want to consider getting another life.”

                   Larry Swedroe

                    

                   In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                   Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 40: The Big Rocks.

                   Chapter 40: The Big Rocks

                   In Chapter 40, Larry explains why passive (systematic) investing is the winning strategy in life as well as investing.

                   Like all the other chapters in the book, this one begins with a story used as an analogy to help understand a financial issue. In this one, a time-management expert fills a mason jar with large rocks. “Full?” she asks. The class agrees. She adds gravel, sand, and water – each filling the spaces between. When a student suggests the lesson is about fitting more into busy schedules, she corrects them:

                   “If you don’t put the big rocks in first, they’ll never fit at all.”

                   The investor’s jar

                   Larry explains the metaphor’s profound implication for wealth:

                   • Big rocks = Family, health, growth, legacy
                   • Gravel = Stock charts, earnings analysis
                   • Sand = Financial news, market commentary
                   • Water = Trading forums, portfolio tinkering
                   
                   

                   Larry explains that active investors start with gravel and sand, leaving insufficient time for the big rocks. They spend much of their precious leisure time watching the latest business news, studying the latest charts, scanning and posting on Internet investment discussion boards, reading financial trade publications and newsletters, and so on. Their jars fill with noise, leaving no room for life’s essentials.

                   Passive investors, on the other hand, ignore the ”noise” (the sand, the gravel, and the water) and place big rocks first. Their strategy operates quietly, driven by low-cost index funds and disciplined rebalancing. The result? Their jars hold what truly enriches life, giving them a sense of freedom and independence.

                   Two stories, one lesson

                   1. The physician’s regret

                   During the 1990s bull market, a doctor would spend nights analyzing stocks after 12-hour shifts. He turned $10,000 into $100,000 – but his marriage was on the verge of collapse. His wife no longer had a husband; his child lost a parent to the glow of stock charts. When the tech bubble burst, the money vanished.

                   The wake-up call was brutal: He had traded first steps and bedtime stories for digits on a screen. After reading Larry’s book, he switched to passive investing, which helped him salvage both his finances and his family. Now, he was playing the winners’ game in life and investing.

                   2. The executive’s discovery

                   A Wharton MBA and corporate treasurer spent decades analyzing stocks after work. Upon adopting passive investing, he calculated a shocking truth: He wasted 6.5 weeks per year on futile research.

                   Worse, this “gravel” wasn’t neutral – trading fees, taxes, and behavioral errors eroded returns. By eliminating the noise, he reclaimed 500+ annual hours for family and passions.

                   Why boring is the bravest choice

                   Larry notes that indexing and passive investing have the ‘disadvantage’ of being boring. However, he continues, investing was never meant to be exciting despite what Wall Street and the financial media want you to believe. Investing is supposed to be about achieving your financial goals with the least amount of risk.

                   Making the ‘boring’ choice in investing can actually be empowering, as it puts you in control and builds confidence in your financial future. Larry further explains that indexing, and passive investing in general, not only allows you to earn market returns in a low-cost and tax-efficient manner but also frees you from spending any time at all watching CNBC and reading financial publications that are essentially no more than what Jane Bryant Quinn called “investment porn.”

                   Play a winner’s game

                   If you find that you need excitement from your investments, consider setting up a separate “entertainment” account. The assets inside that account should not exceed more than a few percent of your total portfolio. Invest the rest of your assets in what I believe to be the winner’s game.

                   Further reading

                   1. Paul Samuelson, Quoted in Jonathan Burton, Investment Titans (McGraw-Hill, 2001).
                   
                   

                   Did you miss out on the previous chapters? Check them out:

                   Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                   • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                   • Enrich Your Future 02: How Markets Set Prices
                   • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                   • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                   • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                   • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                   • Enrich Your Future 07: The Value of Security Analysis
                   • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                   • Enrich Your Future 09: The Fed Model and the Money Illusion
                   
                   

                   Part II: Strategic Portfolio Decisions

                   • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                   • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                   • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                   • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                   • Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
                   • Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
                   • Enrich...]]>In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 40: The Big Rocks.

                     LEARNING: Passive investing will give you the freedom you need.

                      

                     “Indexing and passive investing have the ‘disadvantage’ of being boring. I admit it. However, if anyone needs to get their excitement in life from investing, I’d suggest they might want to consider getting another life.”

                     Larry Swedroe

                      

                     In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                     Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 40: The Big Rocks.

                     Chapter 40: The Big Rocks

                     In Chapter 40, Larry explains why passive (systematic) investing is the winning strategy in life as well as investing.

                     Like all the other chapters in the book, this one begins with a story used as an analogy to help understand a financial issue. In this one, a time-management expert fills a mason jar with large rocks. “Full?” she asks. The class agrees. She adds gravel, sand, and water – each filling the spaces between. When a student suggests the lesson is about fitting more into busy schedules, she corrects them:

                     “If you don’t put the big rocks in first, they’ll never fit at all.”

                     The investor’s jar

                     Larry explains the metaphor’s profound implication for wealth:

                     • Big rocks = Family, health, growth, legacy
                     • Gravel = Stock charts, earnings analysis
                     • Sand = Financial news, market commentary
                     • Water = Trading forums, portfolio tinkering
                     
                     

                     Larry explains that active investors start with gravel and sand, leaving insufficient time for the big rocks. They spend much of their precious leisure time watching the latest business news, studying the latest charts, scanning and posting on Internet investment discussion boards, reading financial trade publications and newsletters, and so on. Their jars fill with noise, leaving no room for life’s essentials.

                     Passive investors, on the other hand, ignore the ”noise” (the sand, the gravel, and the water) and place big rocks first. Their strategy operates quietly, driven by low-cost index funds and disciplined rebalancing. The result? Their jars hold what truly enriches life, giving them a sense of freedom and independence.

                     Two stories, one lesson

                     1. The physician’s regret

                     During the 1990s bull market, a doctor would spend nights analyzing stocks after 12-hour shifts. He turned $10,000 into $100,000 – but his marriage was on the verge of collapse. His wife no longer had a husband; his child lost a parent to the glow of stock charts. When the tech bubble burst, the money vanished.

                     The wake-up call was brutal: He had traded first steps and bedtime stories for digits on a screen. After reading Larry’s book, he switched to passive investing, which helped him salvage both his finances and his family. Now, he was playing the winners’ game in life and investing.

                     2. The executive’s discovery

                     A Wharton MBA and corporate treasurer spent decades analyzing stocks after work. Upon adopting passive investing, he calculated a shocking truth: He wasted 6.5 weeks per year on futile research.

                     Worse, this “gravel” wasn’t neutral – trading fees, taxes, and behavioral errors eroded returns. By eliminating the noise, he reclaimed 500+ annual hours for family and passions.

                     Why boring is the bravest choice

                     Larry notes that indexing and passive investing have the ‘disadvantage’ of being boring. However, he continues, investing was never meant to be exciting despite what Wall Street and the financial media want you to believe. Investing is supposed to be about achieving your financial goals with the least amount of risk.

                     Making the ‘boring’ choice in investing can actually be empowering, as it puts you in control and builds confidence in your financial future. Larry further explains that indexing, and passive investing in general, not only allows you to earn market returns in a low-cost and tax-efficient manner but also frees you from spending any time at all watching CNBC and reading financial publications that are essentially no more than what Jane Bryant Quinn called “investment porn.”

                     Play a winner’s game

                     If you find that you need excitement from your investments, consider setting up a separate “entertainment” account. The assets inside that account should not exceed more than a few percent of your total portfolio. Invest the rest of your assets in what I believe to be the winner’s game.

                     Further reading

                     1. Paul Samuelson, Quoted in Jonathan Burton, Investment Titans (McGraw-Hill, 2001).
                     
                     

                     Did you miss out on the previous chapters? Check them out:

                     Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                     • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                     • Enrich Your Future 02: How Markets Set Prices
                     • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                     • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                     • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                     • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                     • Enrich Your Future 07: The Value of Security Analysis
                     • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                     • Enrich Your Future 09: The Fed Model and the Money Illusion
                     
                     

                     Part II: Strategic Portfolio Decisions

                     • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                     • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                     • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                     • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                     • Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
                     • Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
                     • Enrich Your Future 16: The Estimated Return Is Not Inevitable
                     • Enrich Your Future 17: Take a Portfolio Approach to Your Investments
                     • Enrich Your Future 18: Build a Portfolio That Can Withstand the Black Swans
                     • Enrich Your Future 19: The Gold Illusion: Why Investing in Gold May Not Be Safe
                     • Enrich Your Future 20: Passive Investing Is the Key to Prudent Wealth Management
                     
                     

                     Part III: Behavioral Finance: We Have Met the Enemy and He Is Us

                     • Enrich Your Future 21: Think You Can Beat the Market? Think Again
                     • Enrich Your Future 22: Some Risks Are Not Worth Taking
                     • Enrich Your Future 23: Seeing Through the Frame: Making Better Investment Decisions
                     • Enrich Your Future 24: Why Smart People Do Dumb Things
                     • Enrich Your Future 25: Stock Crashes Happen—Be Prepared
                     • Enrich Your Future 26: Should You Invest Now or Spread It Out?
                     • Enrich Your Future 27: Pascal’s Wager: Betting on Consequences Over Probabilities
                     • Enrich Your Future 28 & 29: How to Outsmart Your Investing Biases
                     • Enrich Your Future 30: The Hidden Cost of Chasing Dividend Stocks
                     • Enrich Your Future 31: Risk vs. Uncertainty: The Investor’s Blind Spot
                     
                     

                     Part IV: Playing the Winner’s Game in Life and Investing

                     • Enrich Your Future 32: Trying to Beat the Market Is a Fool’s Errand
                     • Enrich Your Future 33: The Market Doesn’t Care How Smart You Are
                     • Enrich Your Future 34: Embrace the Bear: Why Market Crashes Are Your Silent Ally
                     • Enrich Your Future 35: Market Gurus Are Just Expensive Entertainers
                     • Enrich Your Future 36: The Madness of Crowded Trades
                     • Enrich Your Future 37 & 38: The Calendar Is a Crook & Hot Funds Are a Trap
                     • Enrich Your Future 39: More Wealth Does Not Give You More Happiness
                     
                     

                     About Larry Swedroe

                     Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                     Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                     Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                     Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                      

                     [spp-transcript]

                      

                     Connect with Larry Swedroe

                     • LinkedIn
                     • X
                     • Website
                     • Books
                     
                     

                     Andrew’s books

                     • How to Start Building Your Wealth Investing in the Stock Market
                     • My Worst Investment Ever
                     • 9 Valuation Mistakes and How to Avoid Them
                     • Transform Your Business with Dr.Deming’s 14 Points
                     
                     

                     Andrew’s online programs

                     • Valuation Master Class
                     • The Become a Better Investor Community
                     • How to Start Building Your Wealth Investing in the Stock Market
                     • Finance Made Ridiculously Simple
                     • FVMR Investing: Quantamental Investing Across the World
                     • Become a Great Presenter and Increase Your Influence
                     • Transform Your Business with Dr. Deming’s 14 Points
                     • Achieve Your Goals
                     
                     

                     Connect with Andrew Stotz:

                     • astotz.com
                     • LinkedIn
                     • Facebook
                     • Instagram
                     • Threads
                     • X
                     • 0d99db60-cd5e-4319-a220-be617299e179Tue, 29 Jul 2025 06:00:00 +070016:31falsefullEnrich Your Future 39: More Wealth Does Not Give You More HappinessIn this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 39: Enough.

                       LEARNING: More wealth does not give you more happiness.

                        

                       “Prudent investors don’t take more risk than they have the ability, willingness, or need to take. If you’ve already won the game, why are you still playing?”

                       Larry Swedroe

                        

                       In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                       Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 39: Enough.

                       Chapter 39: Enough

                       In Chapter 39, Larry discusses the importance of knowing that you have “enough,” a concept that, once understood, can enlighten and guide your financial decisions.

                       In 2009, Larry conducted an investment seminar for the Tiger 21 Group, America’s most exclusive wealth management group. One of the issues the group asked him to address was: How do the wealthy think about risk, and how should they approach it? Larry’s answer exposed a terrifying paradox.

                       More wealth will not make you happier

                       According to Larry, self-made wealth follows a predictable script. Fortunes are built through extreme risk-taking: betting everything on one business, ignoring diversification, and trusting instinct over analysis. This breeds a dangerous confidence—the kind that whispers, “If I did it once, I can do it again.”

                       He explains that the utility of the wealth curve resembles an elephant from the side. It goes up quickly because when you have nothing, even a little extra money can significantly improve your life. If you’re homeless and someone gives you $25 to take a shower, get a meal, and stuff, that will make you much better off. But once you get to some level of net worth, like $2 million or $3 million, or whatever the number is for you, the extra wealth is better than less.

                       However, as you gain more wealth, your incremental level of happiness—just like the elephant’s back— flattens out. There’s virtually little or no improvement in your state of well-being and happiness.

                       The entrepreneur’s invisible trap

                       Larry stresses that wealth building and wealth preservation demand opposite mindsets. Those with the greatest ability to take risks (resources to absorb losses) and willingness (confidence from past wins) often overlook the third critical factor: need. And therein lies the trap.

                       The wealthiest individuals have a near-zero need for further risk. Yet, they continually strive for more and take on significant risks that may not ultimately lead to an enhanced level of happiness. In reality, they do not need to take such a substantial risk. They can dial down the risk in their portfolio and be much happier, sleep better, not worry about markets, and enjoy their life.

                       When $13 million evaporates

                       Larry recounts meeting a couple in 2003. Three years earlier, their portfolio stood at $13 million, with a heavy concentration in tech stocks. By 2003? $3 million. An 80% collapse.

                       “Would doubling to $26 million have changed your lives?” Larry asked.

                       “No,” they admitted.

                       “Then why risk everything for gains that wouldn’t matter?”

                       Their fatal error? Never defining their “enough.” When desires—a larger yacht, a vineyard, or “legacy” projects—morph into perceived needs, they artificially inflate risk tolerance. This ignites a destructive cycle: greater “needs” demand riskier bets, which invite catastrophic losses.

                       The science of “enough”

                       Larry points to research that reshapes wealth psychology: Beyond $75,000 per year (adjusted for inflation), happiness plateaus. After $10 million, diminishing returns accelerate violently. The billionaire’s third home brings no more joy than a latte at the bookstore.

                       This isn’t a theory. Psychologists confirm that true contentment comes from non-tradable assets. These are the experiences and relationships that money can’t buy. A walk in the park with your partner. Reading to grandchildren. The freedom to control your time. These cost little yet yield everything. A $100 bottle of wine? It can’t compete with a $10 one shared with friends.

                       Breaking the cycle

                       Larry prescribes four antidotes for Tiger 21’s members:

                       • First, ask: “If I lost 80% tomorrow, would my core lifestyle survive? Would my relationships?” If the answer chills you, you’re over-risked.
                       • Second, map your marginal utility of wealth. Draw a curve tracking wealth against life satisfaction. Where does the line flatten? That’s your “enough.” For most, it’s far lower than imagined.
                       • Third, build a “fortress portfolio.” Replace concentrated bets with global diversification. Swap illiquid moonshots for Treasury bonds and index funds. Protect capital like a museum guards its masterpieces.
                       • Fourth, demote desires. Luxury items must never masquerade as needs. That vineyard? A want—funded only if cash flows cover it without gambling capital.
                       
                       

                       The unbreakable wealth paradox

                       Larry concludes by emphasizing that building wealth requires courage. Preserving it requires the courage to say: “No more.” The difference between the rich and the ruined isn’t intelligence—it’s knowing when you have enough.

                       Did you miss out on the previous chapters? Check them out:

                       Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                       • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                       • Enrich Your Future 02: How Markets Set Prices
                       • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                       • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                       • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                       • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                       • Enrich Your Future 07: The Value of Security Analysis
                       • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                       • Enrich Your Future 09: The Fed Model and the Money Illusion
                       
                       

                       Part II: Strategic Portfolio Decisions

                       • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                       • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                       • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                       • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                       • Enrich Your Future 14: Stocks Are Risky No Matter How Long the...]]>In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 39: Enough.

                         LEARNING: More wealth does not give you more happiness.

                          

                         “Prudent investors don’t take more risk than they have the ability, willingness, or need to take. If you’ve already won the game, why are you still playing?”

                         Larry Swedroe

                          

                         In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                         Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 39: Enough.

                         Chapter 39: Enough

                         In Chapter 39, Larry discusses the importance of knowing that you have “enough,” a concept that, once understood, can enlighten and guide your financial decisions.

                         In 2009, Larry conducted an investment seminar for the Tiger 21 Group, America’s most exclusive wealth management group. One of the issues the group asked him to address was: How do the wealthy think about risk, and how should they approach it? Larry’s answer exposed a terrifying paradox.

                         More wealth will not make you happier

                         According to Larry, self-made wealth follows a predictable script. Fortunes are built through extreme risk-taking: betting everything on one business, ignoring diversification, and trusting instinct over analysis. This breeds a dangerous confidence—the kind that whispers, “If I did it once, I can do it again.”

                         He explains that the utility of the wealth curve resembles an elephant from the side. It goes up quickly because when you have nothing, even a little extra money can significantly improve your life. If you’re homeless and someone gives you $25 to take a shower, get a meal, and stuff, that will make you much better off. But once you get to some level of net worth, like $2 million or $3 million, or whatever the number is for you, the extra wealth is better than less.

                         However, as you gain more wealth, your incremental level of happiness—just like the elephant’s back— flattens out. There’s virtually little or no improvement in your state of well-being and happiness.

                         The entrepreneur’s invisible trap

                         Larry stresses that wealth building and wealth preservation demand opposite mindsets. Those with the greatest ability to take risks (resources to absorb losses) and willingness (confidence from past wins) often overlook the third critical factor: need. And therein lies the trap.

                         The wealthiest individuals have a near-zero need for further risk. Yet, they continually strive for more and take on significant risks that may not ultimately lead to an enhanced level of happiness. In reality, they do not need to take such a substantial risk. They can dial down the risk in their portfolio and be much happier, sleep better, not worry about markets, and enjoy their life.

                         When $13 million evaporates

                         Larry recounts meeting a couple in 2003. Three years earlier, their portfolio stood at $13 million, with a heavy concentration in tech stocks. By 2003? $3 million. An 80% collapse.

                         “Would doubling to $26 million have changed your lives?” Larry asked.

                         “No,” they admitted.

                         “Then why risk everything for gains that wouldn’t matter?”

                         Their fatal error? Never defining their “enough.” When desires—a larger yacht, a vineyard, or “legacy” projects—morph into perceived needs, they artificially inflate risk tolerance. This ignites a destructive cycle: greater “needs” demand riskier bets, which invite catastrophic losses.

                         The science of “enough”

                         Larry points to research that reshapes wealth psychology: Beyond $75,000 per year (adjusted for inflation), happiness plateaus. After $10 million, diminishing returns accelerate violently. The billionaire’s third home brings no more joy than a latte at the bookstore.

                         This isn’t a theory. Psychologists confirm that true contentment comes from non-tradable assets. These are the experiences and relationships that money can’t buy. A walk in the park with your partner. Reading to grandchildren. The freedom to control your time. These cost little yet yield everything. A $100 bottle of wine? It can’t compete with a $10 one shared with friends.

                         Breaking the cycle

                         Larry prescribes four antidotes for Tiger 21’s members:

                         • First, ask: “If I lost 80% tomorrow, would my core lifestyle survive? Would my relationships?” If the answer chills you, you’re over-risked.
                         • Second, map your marginal utility of wealth. Draw a curve tracking wealth against life satisfaction. Where does the line flatten? That’s your “enough.” For most, it’s far lower than imagined.
                         • Third, build a “fortress portfolio.” Replace concentrated bets with global diversification. Swap illiquid moonshots for Treasury bonds and index funds. Protect capital like a museum guards its masterpieces.
                         • Fourth, demote desires. Luxury items must never masquerade as needs. That vineyard? A want—funded only if cash flows cover it without gambling capital.
                         
                         

                         The unbreakable wealth paradox

                         Larry concludes by emphasizing that building wealth requires courage. Preserving it requires the courage to say: “No more.” The difference between the rich and the ruined isn’t intelligence—it’s knowing when you have enough.

                         Did you miss out on the previous chapters? Check them out:

                         Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                         • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                         • Enrich Your Future 02: How Markets Set Prices
                         • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                         • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                         • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                         • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                         • Enrich Your Future 07: The Value of Security Analysis
                         • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                         • Enrich Your Future 09: The Fed Model and the Money Illusion
                         
                         

                         Part II: Strategic Portfolio Decisions

                         • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                         • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                         • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                         • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                         • Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
                         • Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
                         • Enrich Your Future 16: The Estimated Return Is Not Inevitable
                         • Enrich Your Future 17: Take a Portfolio Approach to Your Investments
                         • Enrich Your Future 18: Build a Portfolio That Can Withstand the Black Swans
                         • Enrich Your Future 19: The Gold Illusion: Why Investing in Gold May Not Be Safe
                         • Enrich Your Future 20: Passive Investing Is the Key to Prudent Wealth Management
                         
                         

                         Part III: Behavioral Finance: We Have Met the Enemy and He Is Us

                         • Enrich Your Future 21: Think You Can Beat the Market? Think Again
                         • Enrich Your Future 22: Some Risks Are Not Worth Taking
                         • Enrich Your Future 23: Seeing Through the Frame: Making Better Investment Decisions
                         • Enrich Your Future 24: Why Smart People Do Dumb Things
                         • Enrich Your Future 25: Stock Crashes Happen—Be Prepared
                         • Enrich Your Future 26: Should You Invest Now or Spread It Out?
                         • Enrich Your Future 27: Pascal’s Wager: Betting on Consequences Over Probabilities
                         • Enrich Your Future 28 & 29: How to Outsmart Your Investing Biases
                         • Enrich Your Future 30: The Hidden Cost of Chasing Dividend Stocks
                         • Enrich Your Future 31: Risk vs. Uncertainty: The Investor’s Blind Spot
                         
                         

                         Part IV: Playing the Winner’s Game in Life and Investing

                         • Enrich Your Future 32: Trying to Beat the Market Is a Fool’s Errand
                         • Enrich Your Future 33: The Market Doesn’t Care How Smart You Are
                         • Enrich Your Future 34: Embrace the Bear: Why Market Crashes Are Your Silent Ally
                         • Enrich Your Future 35: Market Gurus Are Just Expensive Entertainers
                         • Enrich Your Future 36: The Madness of Crowded Trades
                         • Enrich Your Future 37 & 38: The Calendar Is a Crook & Hot Funds Are a Trap
                         
                         

                         About Larry Swedroe

                         Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                         Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                         Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                         Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                          

                         [spp-transcript]

                          

                         Connect with Larry Swedroe

                         • LinkedIn
                         • X
                         • Website
                         • Books
                         
                         

                         Andrew’s books

                         • How to Start Building Your Wealth Investing in the Stock Market
                         • My Worst Investment Ever
                         • 9 Valuation Mistakes and How to Avoid Them
                         • Transform Your Business with Dr.Deming’s 14 Points
                         
                         

                         Andrew’s online programs

                         • Valuation Master Class
                         • The Become a Better Investor Community
                         • How to Start Building Your Wealth Investing in the Stock Market
                         • Finance Made Ridiculously Simple
                         • FVMR Investing: Quantamental Investing Across the World
                         • Become a Great Presenter and Increase Your Influence
                         • Transform Your Business with Dr. Deming’s 14 Points
                         • Achieve Your Goals
                         
                         

                         Connect with Andrew Stotz:

                         • astotz.com
                         • LinkedIn
                         • Facebook
                         • Instagram
                         • e7398114-1e8e-4e14-aa5e-de13c55f776fTue, 22 Jul 2025 06:00:00 +070013:10falsefullBlair LaCorte – How Greed, Pride, and Friendship Cost Me EverythingBIO: Blair LaCorte is a dynamic executive with experience across entertainment, aviation, AI, aerospace, consulting, and more.

                           STORY: Blair shares three catastrophic investment failures and the life-altering lessons that rewired his approach to wealth.

                           LEARNING: Chase knowledge, not hype, and don’t let greed hijack logic. Invest with friends only if you’re willing to lose both.

                            

                           “The worst investment that you can make is to put your time into something that you don’t enjoy or that you know is not going to work out.”

                           Blair LaCorte

                            

                           Guest profile

                           Blair LaCorte is a dynamic executive with experience across entertainment, aviation, AI, aerospace, consulting, and more. He has held CEO roles at companies such as PRG, XOJET, and Autodesk, and led startups to successful IPOs. Currently, he’s training as an astronaut for Virgin Galactic and is Vice Chairman at the Buck Institute.

                           Worst investment ever

                           Fresh out of college at 22, Blair met a smooth-talking investor who flaunted his “lifetime monthly checks” from an oil well. Blinded by dollar signs and zero industry knowledge, he poured his savings into a single well.

                           Blair ignored basic due diligence, diversification, and warnings about low-quality reserves. It was all about greed. He had seen someone make money where they got paid every month for the rest of their life, as long as the well lasted.

                           The greed kept him in and kept him investing in the well. At the end of the day, the oil was of below-average quality and was not as much as they thought it would be. Blair’s ignorance caused him a 100% loss. The well underperformed, and his greed trapped him in a sinking ship. Blair even commissioned a plaque to memorialize his shame—a daily reminder that “easy money” is a predator in disguise.

                           Burning $200k and a friendship

                           After Blair’s first IPO success in 1999, his roommate pitched him on Coffee.com—a visionary play on single-origin beans (decades before it became trendy). Blair invested early, then panicked as losses mounted. When the roommate begged for more capital, he refused because he did not think it would succeed, but guilt kept him from cutting ties.

                           After a while, the startup imploded. Worse? Blair’s friend never spoke to him again. He learned the hard truth from this unwise investment: mixing money with friendship is financial suicide.

                           The $59.50 ego tax

                           At the peak of the dot-com boom, Blair had just scored a top-tier IPO. His broker urgently called and advised him to sell immediately at $59.50 as he believed the boom would not last. But pride convinced him that the broker was just chasing commissions.

                           Blair held stubbornly as the stock bled out to $2. He lost $570,000 in vaporized gains. Blair’s ego had bet against reality, and reality won.

                           Lessons learned

                           • Chase knowledge, not hype, and don’t let greed hijack logic. If you don’t understand how the money is made, you’re the exit strategy for someone else.
                           • Friends + money = atomic risk. Invest with friends only if you’re willing to lose both on the same day.
                           • Pride is the silent portfolio killer. The market doesn’t care about your ego, and exit signals don’t negotiate.
                           • Your time is your ultimate currency. Grinding your years into a dying venture to ‘prove a point’ is the costliest investment of all.
                           
                           

                           Andrew’s takeaways

                           • Macro trumps micro. Brilliant ideas fail if they’re too early or too late. Always ask: “Is the world ready for this?”
                           • Preserve capital like your life depends on it. A young you can risk time; an older you must protect capital.
                           • Passive high-risk bets (like an oil well) are gambling. Invest where you can influence outcomes.
                           
                           

                           Actionable advice

                           When temptation knocks:

                           • Demand the “Why You?” clause. If a “sure thing” lands in your lap, ask: Why me? Why now? What do they know that I don’t?
                           • Map the macro weather by using tools like Google Trends, industry reports, and Fed data to pressure-test timing.
                           • Cap the bleeding by allocating a max of 5% of net worth to high-risk plays. Set automatic exit triggers (e.g., “Sell if -25%”).
                           • Sign contracts, define failure clauses, and never mix personal loans with equity, especially if investing with pals.
                           
                           

                           Blair’s recommendations

                           Blair recommends checking out PPE Mastermind Talks (available for free at PPEmastermind.com) to learn business tactics from battle-tested CEOs. He also recommends reading biographies, examining companies’ histories, and watching documentaries or listening to speakers that prompt you to think differently about things, to accelerate your ability to learn.

                           No.1 goal for the next 12 months

                           Blair’s goal for the next 12 months is radical self-care. Blair wants to do things for himself without feeling guilty.

                           Parting words

                            

                           “Go out there and have fun, it’s a privilege. Approximately 50% of the world’s population lives on a subsistence level. Another 25% don’t get to make the decisions. If you have the financial or mental capability to try new things, you’re blessed. So go out there and have some fun.”

                           Blair LaCorte

                            

                           [spp-transcript]

                            

                           Connect with Blair LaCorte

                           • LinkedIn
                           • Facebook
                           • Website
                           
                           

                           Andrew’s books

                           • How to Start Building Your Wealth Investing in the Stock Market
                           • My Worst Investment Ever
                           • 9 Valuation Mistakes and How to Avoid Them
                           • Transform Your Business with Dr.Deming’s 14 Points
                           
                           

                           Andrew’s online programs

                           • Valuation Master Class
                           • The Become a Better Investor Community
                           • How to Start Building Your Wealth Investing in the Stock Market
                           • Finance Made Ridiculously Simple
                           • FVMR Investing: Quantamental Investing Across the World
                           • Become a Great Presenter and Increase Your Influence
                           • Transform Your Business with Dr. Deming’s 14 Points
                           • Achieve Your Goals
                           
                           

                           Connect with Andrew Stotz:

                           • astotz.com
                           • LinkedIn
                           • Facebook
                           • Instagram
                           • Threads
                           • X
                           • YouTube
                           • My Worst Investment Ever Podcast
                           
                           ]]>BIO: Blair LaCorte is a dynamic executive with experience across entertainment, aviation, AI, aerospace, consulting, and more.

                           STORY: Blair shares three catastrophic investment failures and the life-altering lessons that rewired his approach to wealth.

                           LEARNING: Chase knowledge, not hype, and don’t let greed hijack logic. Invest with friends only if you’re willing to lose both.

                            

                           “The worst investment that you can make is to put your time into something that you don’t enjoy or that you know is not going to work out.”

                           Blair LaCorte

                            

                           Guest profile

                           Blair LaCorte is a dynamic executive with experience across entertainment, aviation, AI, aerospace, consulting, and more. He has held CEO roles at companies such as PRG, XOJET, and Autodesk, and led startups to successful IPOs. Currently, he’s training as an astronaut for Virgin Galactic and is Vice Chairman at the Buck Institute.

                           Worst investment ever

                           Fresh out of college at 22, Blair met a smooth-talking investor who flaunted his “lifetime monthly checks” from an oil well. Blinded by dollar signs and zero industry knowledge, he poured his savings into a single well.

                           Blair ignored basic due diligence, diversification, and warnings about low-quality reserves. It was all about greed. He had seen someone make money where they got paid every month for the rest of their life, as long as the well lasted.

                           The greed kept him in and kept him investing in the well. At the end of the day, the oil was of below-average quality and was not as much as they thought it would be. Blair’s ignorance caused him a 100% loss. The well underperformed, and his greed trapped him in a sinking ship. Blair even commissioned a plaque to memorialize his shame—a daily reminder that “easy money” is a predator in disguise.

                           Burning $200k and a friendship

                           After Blair’s first IPO success in 1999, his roommate pitched him on Coffee.com—a visionary play on single-origin beans (decades before it became trendy). Blair invested early, then panicked as losses mounted. When the roommate begged for more capital, he refused because he did not think it would succeed, but guilt kept him from cutting ties.

                           After a while, the startup imploded. Worse? Blair’s friend never spoke to him again. He learned the hard truth from this unwise investment: mixing money with friendship is financial suicide.

                           The $59.50 ego tax

                           At the peak of the dot-com boom, Blair had just scored a top-tier IPO. His broker urgently called and advised him to sell immediately at $59.50 as he believed the boom would not last. But pride convinced him that the broker was just chasing commissions.

                           Blair held stubbornly as the stock bled out to $2. He lost $570,000 in vaporized gains. Blair’s ego had bet against reality, and reality won.

                           Lessons learned

                           • Chase knowledge, not hype, and don’t let greed hijack logic. If you don’t understand how the money is made, you’re the exit strategy for someone else.
                           • Friends + money = atomic risk. Invest with friends only if you’re willing to lose both on the same day.
                           • Pride is the silent portfolio killer. The market doesn’t care about your ego, and exit signals don’t negotiate.
                           • Your time is your ultimate currency. Grinding your years into a dying venture to ‘prove a point’ is the costliest investment of all.
                           
                           

                           Andrew’s takeaways

                           • Macro trumps micro. Brilliant ideas fail if they’re too early or too late. Always ask: “Is the world ready for this?”
                           • Preserve capital like your life depends on it. A young you can risk time; an older you must protect capital.
                           • Passive high-risk bets (like an oil well) are gambling. Invest where you can influence outcomes.
                           
                           

                           Actionable advice

                           When temptation knocks:

                           • Demand the “Why You?” clause. If a “sure thing” lands in your lap, ask: Why me? Why now? What do they know that I don’t?
                           • Map the macro weather by using tools like Google Trends, industry reports, and Fed data to pressure-test timing.
                           • Cap the bleeding by allocating a max of 5% of net worth to high-risk plays. Set automatic exit triggers (e.g., “Sell if -25%”).
                           • Sign contracts, define failure clauses, and never mix personal loans with equity, especially if investing with pals.
                           
                           

                           Blair’s recommendations

                           Blair recommends checking out PPE Mastermind Talks (available for free at PPEmastermind.com) to learn business tactics from battle-tested CEOs. He also recommends reading biographies, examining companies’ histories, and watching documentaries or listening to speakers that prompt you to think differently about things, to accelerate your ability to learn.

                           No.1 goal for the next 12 months

                           Blair’s goal for the next 12 months is radical self-care. Blair wants to do things for himself without feeling guilty.

                           Parting words

                            

                           “Go out there and have fun, it’s a privilege. Approximately 50% of the world’s population lives on a subsistence level. Another 25% don’t get to make the decisions. If you have the financial or mental capability to try new things, you’re blessed. So go out there and have some fun.”

                           Blair LaCorte

                            

                           [spp-transcript]

                            

                           Connect with Blair LaCorte

                           • LinkedIn
                           • Facebook
                           • Website
                           
                           

                           Andrew’s books

                           • How to Start Building Your Wealth Investing in the Stock Market
                           • My Worst Investment Ever
                           • 9 Valuation Mistakes and How to Avoid Them
                           • Transform Your Business with Dr.Deming’s 14 Points
                           
                           

                           Andrew’s online programs

                           • Valuation Master Class
                           • The Become a Better Investor Community
                           • How to Start Building Your Wealth Investing in the Stock Market
                           • Finance Made Ridiculously Simple
                           • FVMR Investing: Quantamental Investing Across the World
                           • Become a Great Presenter and Increase Your Influence
                           • Transform Your Business with Dr. Deming’s 14 Points
                           • Achieve Your Goals
                           
                           

                           Connect with Andrew Stotz:

                           • astotz.com
                           • LinkedIn
                           • Facebook
                           • Instagram
                           • Threads
                           • X
                           • YouTube
                           • My Worst Investment Ever Podcast
                           
                           ]]>70e14584-49a3-48bd-8341-97937126186aTue, 15 Jul 2025 06:00:00 +070039:37falsefullEnrich Your Future 37 & 38: The Calendar Is a Crook & Hot Funds Are a TrapIn this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 37: Sell in May and Go Away: Financial Astrology and Chapter 38: Chasing Spectacular Fund Performance.

                           LEARNING: Calendars don’t drive returns. Winners ignore hot funds.

                            

                           “For you to believe in a strategy, there should be some economically logical reason for it to persist, so you can be confident it isn’t just some random outcome.”

                           Larry Swedroe

                            

                           In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                           Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 37: Sell in May and Go Away: Financial Astrology and Chapter 38: Chasing Spectacular Fund Performance.

                           Chapter 37: Sell in May and Go Away: Financial Astrology

                           In chapter 37, Larry explains why the idea of selling stocks in May and switching to cash, then buying back in November, is not a sound strategy.

                           What financial advisers insist on repeating, in Larry’s view, is: “Sell in May, go to cash, and reinvest in November.” It makes sense and is even logical. And, as the adage has it, numbers don’t lie. Figures, backed by reliable data, show that stocks gain more from November through April (a 5.7% average premium) than from May through October (a 2.6% average premium). So why not time the market?

                           Busting the myth

                           Larry dismantles this advice, revealing that the ‘Sell in May’ strategy, despite its apparent logic, is a myth. He points out that stocks still outperform cash even during the May to October period, with stocks beating T-bills by 2.6% annually.

                           Selling stocks prematurely leads to missed gains, and the strategy of switching investments underperforms a simple buy-and-hold approach. In fact, a ‘Sell in May’ strategy yielded an average annual return of 8.3% from 1926 to 2023, while simply holding the S&P 500 returned 10.2%—a significant 1.9% yearly gap.

                           Larry adds that Taxes and fees make the strategy worse. Trading converts long-term gains (lower tax) into short-term gains (higher tax). Transaction costs always pile up.

                           Additionally, this strategy is rarely effective. Before 2022, the last “win” was 2011. A single outlier (2022’s bear market) does not make a strategy worthwhile.

                           The fatal flaw

                           According to Larry, one of the fundamental rules of finance is that expected return and risk are positively correlated. So if stocks actually do worse than cash between May and October, they’d need to be less risky for these six months, which is absurd because volatility doesn’t take summer vacations.

                           Why do people believe in this flawed strategy?

                           Larry notes four reasons why people still believe in this flawed investment strategy:

                           • Recency bias: Media hypes the strategy after rare wins (like 2022).
                           • Pattern-seeking: Humans confuse coincidence with cause.
                           • “Free lunch” fantasy: Active investors crave simple shortcuts.
                           
                           

                           The proper investment to follow

                           Larry’s advice is to:

                           • Ignore the noise. Calendars don’t drive returns.
                           • Stay invested. Missing just 10 best days in 30 years slashes returns by 50%.
                           • Focus on what matters: Diversification, low costs, and tax efficiency.
                           
                           

                           Bottom line: The “Sell in May” strategy is a form of financial astrology. It confuses seasonal patterns with strategy. The market’s not a magic 8-ball. Stop gambling on folklore—and start compounding.

                           Chapter 38: Chasing Spectacular Fund Performance

                           In chapter 38, Larry explains why chasing spectacular performance is not a prudent investment strategy.

                           He starts the article by highlighting that 2020 was a phenomenal year for hot funds. During that year, 18 US stock funds posted gains of over 100%, attracting $19 billion in investor dollars in pursuit of recent performance. Their prior records seemed unstoppable—17 of 18 had reigned supreme over markets for three straight years.

                           The brutal reality

                           A landmark Morningstar study by Jeffrey Ptak looked into equity funds that gained more than 100% in a calendar year. He found that of the 123 stock funds that gained at least 100% between 1990 and 2016, just 24 made money in the three years following their phenomenal return.

                           More adversely, the average fund subsequently lost around 17% each year. Ptak also found that funds that failed in the years before their big gain were far more likely to earn more money during the years after that big year, compared to money that had been profitable during the period preceding their big gain.

                           Why do hot funds implode?

                           There are a few reasons why hot funds could implode. One is overvalued bets. For instance, the 2020 superstars held stocks trading at 3x the valuation of the Nasdaq 100. Another reason is the reversion to the mean. Extreme returns are statistical outliers, not a result of skill. Lastly, the crowd effect. Inflows surge after gains, forcing managers to buy at high prices.

                           The index fund quietly wins

                           Larry observes that while speculators chased fireworks, Fidelity’s Total Market Index (FSKAX) returned 20.8% in 2020, beating 80% of active funds in its category. It did this with a 0.01% fee, 1/100th the cost of typical active funds.

                           In conclusion, Larry reminds investors that the race to spectacular returns is a marathon, not a sprint. Winners ignore the fireworks.

                           Further reading

                           1. Jeffrey Ptak, “What Happens After Fund Managers Crush It?” The Evidence Based Investor, January 18, 2001.
                           
                           

                           Did you miss out on the previous chapters? Check them out:

                           Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                           • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                           • Enrich Your Future 02: How Markets Set Prices
                           • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                           • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                           • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                           • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                           • Enrich Your Future 07: The Value of Security Analysis
                           • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                           • Enrich Your Future 09: The Fed Model and the Money Illusion
                           
                           

                           Part II: Strategic Portfolio Decisions

                           • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                           • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of...]]>In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 37: Sell in May and Go Away: Financial Astrology and Chapter 38: Chasing Spectacular Fund Performance.

                             LEARNING: Calendars don’t drive returns. Winners ignore hot funds.

                              

                             “For you to believe in a strategy, there should be some economically logical reason for it to persist, so you can be confident it isn’t just some random outcome.”

                             Larry Swedroe

                              

                             In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                             Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 37: Sell in May and Go Away: Financial Astrology and Chapter 38: Chasing Spectacular Fund Performance.

                             Chapter 37: Sell in May and Go Away: Financial Astrology

                             In chapter 37, Larry explains why the idea of selling stocks in May and switching to cash, then buying back in November, is not a sound strategy.

                             What financial advisers insist on repeating, in Larry’s view, is: “Sell in May, go to cash, and reinvest in November.” It makes sense and is even logical. And, as the adage has it, numbers don’t lie. Figures, backed by reliable data, show that stocks gain more from November through April (a 5.7% average premium) than from May through October (a 2.6% average premium). So why not time the market?

                             Busting the myth

                             Larry dismantles this advice, revealing that the ‘Sell in May’ strategy, despite its apparent logic, is a myth. He points out that stocks still outperform cash even during the May to October period, with stocks beating T-bills by 2.6% annually.

                             Selling stocks prematurely leads to missed gains, and the strategy of switching investments underperforms a simple buy-and-hold approach. In fact, a ‘Sell in May’ strategy yielded an average annual return of 8.3% from 1926 to 2023, while simply holding the S&P 500 returned 10.2%—a significant 1.9% yearly gap.

                             Larry adds that Taxes and fees make the strategy worse. Trading converts long-term gains (lower tax) into short-term gains (higher tax). Transaction costs always pile up.

                             Additionally, this strategy is rarely effective. Before 2022, the last “win” was 2011. A single outlier (2022’s bear market) does not make a strategy worthwhile.

                             The fatal flaw

                             According to Larry, one of the fundamental rules of finance is that expected return and risk are positively correlated. So if stocks actually do worse than cash between May and October, they’d need to be less risky for these six months, which is absurd because volatility doesn’t take summer vacations.

                             Why do people believe in this flawed strategy?

                             Larry notes four reasons why people still believe in this flawed investment strategy:

                             • Recency bias: Media hypes the strategy after rare wins (like 2022).
                             • Pattern-seeking: Humans confuse coincidence with cause.
                             • “Free lunch” fantasy: Active investors crave simple shortcuts.
                             
                             

                             The proper investment to follow

                             Larry’s advice is to:

                             • Ignore the noise. Calendars don’t drive returns.
                             • Stay invested. Missing just 10 best days in 30 years slashes returns by 50%.
                             • Focus on what matters: Diversification, low costs, and tax efficiency.
                             
                             

                             Bottom line: The “Sell in May” strategy is a form of financial astrology. It confuses seasonal patterns with strategy. The market’s not a magic 8-ball. Stop gambling on folklore—and start compounding.

                             Chapter 38: Chasing Spectacular Fund Performance

                             In chapter 38, Larry explains why chasing spectacular performance is not a prudent investment strategy.

                             He starts the article by highlighting that 2020 was a phenomenal year for hot funds. During that year, 18 US stock funds posted gains of over 100%, attracting $19 billion in investor dollars in pursuit of recent performance. Their prior records seemed unstoppable—17 of 18 had reigned supreme over markets for three straight years.

                             The brutal reality

                             A landmark Morningstar study by Jeffrey Ptak looked into equity funds that gained more than 100% in a calendar year. He found that of the 123 stock funds that gained at least 100% between 1990 and 2016, just 24 made money in the three years following their phenomenal return.

                             More adversely, the average fund subsequently lost around 17% each year. Ptak also found that funds that failed in the years before their big gain were far more likely to earn more money during the years after that big year, compared to money that had been profitable during the period preceding their big gain.

                             Why do hot funds implode?

                             There are a few reasons why hot funds could implode. One is overvalued bets. For instance, the 2020 superstars held stocks trading at 3x the valuation of the Nasdaq 100. Another reason is the reversion to the mean. Extreme returns are statistical outliers, not a result of skill. Lastly, the crowd effect. Inflows surge after gains, forcing managers to buy at high prices.

                             The index fund quietly wins

                             Larry observes that while speculators chased fireworks, Fidelity’s Total Market Index (FSKAX) returned 20.8% in 2020, beating 80% of active funds in its category. It did this with a 0.01% fee, 1/100th the cost of typical active funds.

                             In conclusion, Larry reminds investors that the race to spectacular returns is a marathon, not a sprint. Winners ignore the fireworks.

                             Further reading

                             1. Jeffrey Ptak, “What Happens After Fund Managers Crush It?” The Evidence Based Investor, January 18, 2001.
                             
                             

                             Did you miss out on the previous chapters? Check them out:

                             Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                             • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                             • Enrich Your Future 02: How Markets Set Prices
                             • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                             • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                             • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                             • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                             • Enrich Your Future 07: The Value of Security Analysis
                             • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                             • Enrich Your Future 09: The Fed Model and the Money Illusion
                             
                             

                             Part II: Strategic Portfolio Decisions

                             • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                             • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                             • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                             • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                             • Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
                             • Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
                             • Enrich Your Future 16: The Estimated Return Is Not Inevitable
                             • Enrich Your Future 17: Take a Portfolio Approach to Your Investments
                             • Enrich Your Future 18: Build a Portfolio That Can Withstand the Black Swans
                             • Enrich Your Future 19: The Gold Illusion: Why Investing in Gold May Not Be Safe
                             • Enrich Your Future 20: Passive Investing Is the Key to Prudent Wealth Management
                             
                             

                             Part III: Behavioral Finance: We Have Met the Enemy and He Is Us

                             • Enrich Your Future 21: Think You Can Beat the Market? Think Again
                             • Enrich Your Future 22: Some Risks Are Not Worth Taking
                             • Enrich Your Future 23: Seeing Through the Frame: Making Better Investment Decisions
                             • Enrich Your Future 24: Why Smart People Do Dumb Things
                             • Enrich Your Future 25: Stock Crashes Happen—Be Prepared
                             • Enrich Your Future 26: Should You Invest Now or Spread It Out?
                             • Enrich Your Future 27: Pascal’s Wager: Betting on Consequences Over Probabilities
                             • Enrich Your Future 28 & 29: How to Outsmart Your Investing Biases
                             • Enrich Your Future 30: The Hidden Cost of Chasing Dividend Stocks
                             • Enrich Your Future 31: Risk vs. Uncertainty: The Investor’s Blind Spot
                             
                             

                             Part IV: Playing the Winner’s Game in Life and Investing

                             • Enrich Your Future 32: Trying to Beat the Market Is a Fool’s Errand
                             • Enrich Your Future 33: The Market Doesn’t Care How Smart You Are
                             • Enrich Your Future 34: Embrace the Bear: Why Market Crashes Are Your Silent Ally
                             • Enrich Your Future 35: Market Gurus Are Just Expensive Entertainers
                             • Enrich Your Future 36: The Madness of Crowded Trades
                             
                             

                             About Larry Swedroe

                             Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                             Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                             Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                             Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                              

                             [spp-transcript]

                              

                             Connect with Larry Swedroe

                             • LinkedIn
                             • X
                             • Website
                             • Books
                             
                             

                             Andrew’s books

                             • How to Start Building Your Wealth Investing in the Stock Market
                             • My Worst Investment Ever
                             • 9 Valuation Mistakes and How to Avoid Them
                             • Transform Your Business with Dr.Deming’s 14 Points
                             
                             

                             Andrew’s online programs

                             • Valuation Master Class
                             • The Become a Better Investor Community
                             • How to Start Building Your Wealth Investing in the Stock Market
                             • Finance Made Ridiculously Simple
                             • FVMR Investing: Quantamental Investing Across the World
                             • Become a Great Presenter and Increase Your Influence
                             • Transform Your Business with Dr. Deming’s 14 Points
                             • Achieve Your Goals
                             
                             

                             Connect with Andrew...]]>5c47ecaf-b88a-4ba5-9446-adf9d32fa9dfTue, 08 Jul 2025 06:00:00 +070018:32falsefullEnrich Your Future 36: The Madness of Crowded TradesIn this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 36: Fashions and Investment Folly.

                             LEARNING: Do not be swayed by herd mentality.

                              

                             “Markets can remain irrational longer than you can remain solvent. So do not bet against bubbles, because they can get bigger and bigger, totally irrational eventually, like a rubber band that gets stretched too far, it snaps back, and all those fake gains that weren’t fundamentally based get erased and investors get wiped out.”

                             Larry Swedroe

                              

                             In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                             Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 36: Fashions and Investment Folly.

                             Chapter 36: Fashions and Investment Folly

                             In this chapter, Larry explains why investors allow themselves to be influenced by the herd mentality or the madness of crowds.

                             Perfectly rational people can be influenced by a herd mentality

                             When it comes to investing, otherwise perfectly rational people can be influenced by a herd mentality. The potential for significant financial rewards plays on the human emotions of greed and envy. In investing, as in fashion, fluctuations in attitudes often spread widely without any apparent logic.

                             Larry notes that one of the most remarkable statistics about the world of investing is that there are many more mutual funds than stocks, and there are also more hedge fund managers than stocks. There are also thousands of separate account managers. The question is: Why are there so many managers and so many funds?

                             Effects of recency bias

                             According to Larry, there are several explanations for the high number of managers and funds. The first is the all-too-human tendency to fall subject to “recency.” This is the tendency to give too much weight to recent experience while ignoring the lessons of long-term historical evidence. Larry says that investors subject to recency bias make the mistake of extrapolating the most recent past into the future, almost as if it is preordained that the recent trend will continue.

                             The result is that whenever a hot sector emerges, investors rush to jump on the bandwagon, and money flows into that sector. Inevitably, the fad (fashion) passes and ends badly. The bubble inevitably bursts.

                             Investment ads create demand where there is none

                             Another reason, Larry notes, is that the advertising machines of Wall Street’s investment firms are great at developing products to meet demand. The record indicates they are even great at creating demand where none should exist.

                             The internet became the greatest craze of all, and internet funds were designed to exploit the demand. Investors lost more fortunes in the craze. The latest fashions include cloud computing, electric vehicles, and artificial intelligence.

                             However, this trend, at least for mutual funds, has changed, and there are now fewer funds than there were at the height of the internet frenzy. This is a result of many poor performers being either merged out of existence (to erase their track record) or closed due to a lack of sufficient funds to keep them operational.

                             Inconsistent performance by active managers

                             Another reason for the proliferation of funds is that Wall Street machines recognize active managers’ track records as inconsistent (and often poor) performance. Thus, a family of funds may create several funds in the same category, hoping that at least one will be randomly hot at any given time.

                             How to beat herd mentality

                             To overcome herd mentality, Larry advises investors to craft a comprehensive investment plan that factors in their risk tolerance. By building a globally diversified portfolio and sticking to this plan, investors can navigate the market’s noise and emotional triggers, such as greed and envy during bull markets and fear and panic during bear markets.

                             He also adds that investors will benefit more from using passively managed funds to implement the plan; this is the only way to ensure they do not underperform the market. Minimizing this risk gives them the best chance to achieve their goals. If investors adopt the winner’s game of passive investing, they will no longer have to spend time searching for that hot fund. They can spend time on far more critical issues.

                             Further reading

                             1. Charles MacKay, Extraordinary Popular Delusions and the Madness
                             2. Quoted in Edward Chancellor, Devil Take the Hindmost, (Farrar, Straus and Giroux, 1999).

                             
                             

                             Did you miss out on the previous chapters? Check them out:

                             Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                             • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                             • Enrich Your Future 02: How Markets Set Prices
                             • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                             • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                             • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                             • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                             • Enrich Your Future 07: The Value of Security Analysis
                             • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                             • Enrich Your Future 09: The Fed Model and the Money Illusion

                             
                             

                             Part II: Strategic Portfolio Decisions

                             • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                             • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                             • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                             • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                             • Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
                             • Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
                             • In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 36: Fashions and Investment Folly.

                               LEARNING: Do not be swayed by herd mentality.

                                

                               “Markets can remain irrational longer than you can remain solvent. So do not bet against bubbles, because they can get bigger and bigger, totally irrational eventually, like a rubber band that gets stretched too far, it snaps back, and all those fake gains that weren’t fundamentally based get erased and investors get wiped out.”

                               Larry Swedroe

                                

                               In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                               Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 36: Fashions and Investment Folly.

                               Chapter 36: Fashions and Investment Folly

                               In this chapter, Larry explains why investors allow themselves to be influenced by the herd mentality or the madness of crowds.

                               Perfectly rational people can be influenced by a herd mentality

                               When it comes to investing, otherwise perfectly rational people can be influenced by a herd mentality. The potential for significant financial rewards plays on the human emotions of greed and envy. In investing, as in fashion, fluctuations in attitudes often spread widely without any apparent logic.

                               Larry notes that one of the most remarkable statistics about the world of investing is that there are many more mutual funds than stocks, and there are also more hedge fund managers than stocks. There are also thousands of separate account managers. The question is: Why are there so many managers and so many funds?

                               Effects of recency bias

                               According to Larry, there are several explanations for the high number of managers and funds. The first is the all-too-human tendency to fall subject to “recency.” This is the tendency to give too much weight to recent experience while ignoring the lessons of long-term historical evidence. Larry says that investors subject to recency bias make the mistake of extrapolating the most recent past into the future, almost as if it is preordained that the recent trend will continue.

                               The result is that whenever a hot sector emerges, investors rush to jump on the bandwagon, and money flows into that sector. Inevitably, the fad (fashion) passes and ends badly. The bubble inevitably bursts.

                               Investment ads create demand where there is none

                               Another reason, Larry notes, is that the advertising machines of Wall Street’s investment firms are great at developing products to meet demand. The record indicates they are even great at creating demand where none should exist.

                               The internet became the greatest craze of all, and internet funds were designed to exploit the demand. Investors lost more fortunes in the craze. The latest fashions include cloud computing, electric vehicles, and artificial intelligence.

                               However, this trend, at least for mutual funds, has changed, and there are now fewer funds than there were at the height of the internet frenzy. This is a result of many poor performers being either merged out of existence (to erase their track record) or closed due to a lack of sufficient funds to keep them operational.

                               Inconsistent performance by active managers

                               Another reason for the proliferation of funds is that Wall Street machines recognize active managers’ track records as inconsistent (and often poor) performance. Thus, a family of funds may create several funds in the same category, hoping that at least one will be randomly hot at any given time.

                               How to beat herd mentality

                               To overcome herd mentality, Larry advises investors to craft a comprehensive investment plan that factors in their risk tolerance. By building a globally diversified portfolio and sticking to this plan, investors can navigate the market’s noise and emotional triggers, such as greed and envy during bull markets and fear and panic during bear markets.

                               He also adds that investors will benefit more from using passively managed funds to implement the plan; this is the only way to ensure they do not underperform the market. Minimizing this risk gives them the best chance to achieve their goals. If investors adopt the winner’s game of passive investing, they will no longer have to spend time searching for that hot fund. They can spend time on far more critical issues.

                               Further reading

                               1. Charles MacKay, Extraordinary Popular Delusions and the Madness
                               2. Quoted in Edward Chancellor, Devil Take the Hindmost, (Farrar, Straus and Giroux, 1999).
                               
                               

                               Did you miss out on the previous chapters? Check them out:

                               Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                               • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                               • Enrich Your Future 02: How Markets Set Prices
                               • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                               • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                               • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                               • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                               • Enrich Your Future 07: The Value of Security Analysis
                               • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                               • Enrich Your Future 09: The Fed Model and the Money Illusion
                               
                               

                               Part II: Strategic Portfolio Decisions

                               • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                               • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                               • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                               • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                               • Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
                               • Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
                               • Enrich Your Future 16: The Estimated Return Is Not Inevitable
                               • Enrich Your Future 17: Take a Portfolio Approach to Your Investments
                               • Enrich Your Future 18: Build a Portfolio That Can Withstand the Black Swans
                               • Enrich Your Future 19: The Gold Illusion: Why Investing in Gold May Not Be Safe
                               • Enrich Your Future 20: Passive Investing Is the Key to Prudent Wealth Management
                               
                               

                               Part III: Behavioral Finance: We Have Met the Enemy and He Is Us

                               • Enrich Your Future 21: Think You Can Beat the Market? Think Again
                               • Enrich Your Future 22: Some Risks Are Not Worth Taking
                               • Enrich Your Future 23: Seeing Through the Frame: Making Better Investment Decisions
                               • Enrich Your Future 24: Why Smart People Do Dumb Things
                               • Enrich Your Future 25: Stock Crashes Happen—Be Prepared
                               • Enrich Your Future 26: Should You Invest Now or Spread It Out?
                               • Enrich Your Future 27: Pascal’s Wager: Betting on Consequences Over Probabilities
                               • Enrich Your Future 28 & 29: How to Outsmart Your Investing Biases
                               • Enrich Your Future 30: The Hidden Cost of Chasing Dividend Stocks
                               • Enrich Your Future 31: Risk vs. Uncertainty: The Investor’s Blind Spot
                               
                               

                               Part IV: Playing the Winner’s Game in Life and Investing

                               • Enrich Your Future 32: Trying to Beat the Market Is a Fool’s Errand
                               • Enrich Your Future 33: The Market Doesn’t Care How Smart You Are
                               • Enrich Your Future 34: Embrace the Bear: Why Market Crashes Are Your Silent Ally
                               • Enrich Your Future 35: Market Gurus Are Just Expensive Entertainers
                               
                               

                               About Larry Swedroe

                               Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                               Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                               Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                               Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                

                               [spp-transcript]

                                

                               Connect with Larry Swedroe

                               • LinkedIn
                               • X
                               • Website
                               • Books
                               
                               

                               Andrew’s books

                               • How to Start Building Your Wealth Investing in the Stock Market
                               • My Worst Investment Ever
                               • 9 Valuation Mistakes and How to Avoid Them
                               • Transform Your Business with Dr.Deming’s 14 Points
                               
                               

                               Andrew’s online programs

                               • Valuation Master Class
                               • The Become a Better Investor Community
                               • How to Start Building Your Wealth Investing in the Stock Market
                               • Finance Made Ridiculously Simple
                               • FVMR Investing: Quantamental Investing Across the World
                               • Become a Great Presenter and Increase Your Influence
                               • Transform Your Business with Dr. Deming’s 14 Points
                               • Achieve Your Goals
                               
                               

                               Connect with Andrew Stotz:

                               • astotz.com
                               • LinkedIn
                               • Facebook
                               • Instagram
                               • Threads
                               • X
                               • YouTube
                               • My Worst Investment Ever Podcast
                               
                               ]]>e5483f32-b5bf-4d34-8098-68bf6dcaeca3Tue, 01 Jul 2025 06:00:00 +070023:19falsefullEnrich Your Future 35: Market Gurus Are Just Expensive EntertainersIn this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 35: Mad Money.

                               LEARNING: Investors are naive, and Cramer is an entertainer, not a financial advisor who adds value.

                                

                               “Do not confuse information with value-added information. If you know something because it was in the newspaper, everyone else knows it as well. So it has no value.”

                               Larry Swedroe

                                

                               In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                               Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 35: Mad Money.

                               Chapter 35: Mad Money

                               In this chapter, Larry explains why investment advice from so-called market experts is often worthless.

                               The infamous Jim Cramer

                               Jim Cramer, a former hedge fund manager, has become one of the most recognizable faces in the investment world. He dispenses rapid-fire investment advice on the show “Mad Money.” Since it premiered in March 2005, it has been one of CNBC’s most-watched shows. But has his advice been as successful for the investors who follow it? Larry shares a couple of research studies that answer this question.

                               It pays more to invest in an S&P than in Cramer’s fund

                               Cramer manages a portfolio that invests in many of the stock recommendations he makes on TV. Established in August 2001 with approximately $3 million, the Action Alerts PLUS (AAP) portfolio has been the centerpiece of Cramer’s media company, TheStreet, which sells his financial advice, giving subscribers in the millions access to each trade the portfolio makes ahead of time. Jonathan Hartley and Matthew Olson, authors of the 2018 study “Jim Cramer’s Mad Money Charitable Trust Performance and Factor Attribution,” examined the AAP portfolio’s historical performance. Their study covered the period from August 1, 2001, the AAP portfolio’s inception, through December 31, 2017. The study found that the fund returned a total of 97%. During that same period, an investment in the S&P would have returned 204%.

                               No real stock-picking skill, just entertainment

                               In another study, “How Mad Is Mad Money?”, Paul Bolster, Emery Trahan, and Anand Venkateswaran examined Cramer’s buy and sell recommendations for the period from July 28, 2005, through December 31, 2008. They also constructed a portfolio of his recommendations and compared it to a market index. The researchers came to three key conclusions:

                               • Investors were paying attention, as the stocks he recommended had abnormal returns of almost 2% on the day following his recommendations.
                               • The returns for the recommended stocks were both positive and significant for the day of the show and the 30 days preceding the show. So, it seems he was recommending stocks with short-term momentum.
                               • The returns were negative and significant, at -0.33% and -2.1%, for days 2 through 5 and days 2 through 30 following the recommendation. After 30 days, the results are insignificant.
                               
                               

                               There is no evidence of any stock-picking skill—Cramer’s picks are neither good nor bad. In the end, it’s just entertainment.

                               A third study, “Is the Market Mad? Evidence from Mad Money,” conducted in 2005, found the same result as the second study: prices rise overnight, and they are quickly corrected. This means that Cramer added negative value for the people who tried to implement his advice because they drove the price up in their buying frenzy. Then the smart money comes in, and the price reverts to basically where it was before he made the recommendation.

                               Do stock market experts reliably provide stock market timing guidance?

                               In a fourth study, CXO Advisory Group set out to determine if stock market experts, whether self-proclaimed or endorsed by others (such as in the financial media), reliably provide stock market timing guidance.

                               To find the answer, from 2005 through 2012, they collected and investigated 6,584 forecasts for the US stock market offered publicly by 68 experts (including Cramer), employing technical, fundamental, and sentiment indicators. Their collection included forecasts, all of which were publicly available on the internet, dating back to the end of 1998. They selected experts, both bulls and bears, based on web searches for public archives that contained enough forecasts spanning various market conditions to gauge their accuracy. Basically, they found there are no real experts.

                               The distribution of their accuracy looks virtually identical to a bell curve but slightly to the left, meaning, on average, they do worse. The average accuracy was 47%, which happened to be the same score as Cramer’s. So, of all the non-expert experts, Cramer was average at being non-expert.

                               The market is highly efficient for any guru

                               According to Larry, all these studies indicate that investors are naive, Cramer is an entertainer, not a financial advisor, who adds value, and that the market is highly efficient, making it very hard to beat it.

                               They also show that being highly intelligent (and entertaining, in Cramer’s case) is not a sufficient condition to outperform the market. The reason is simple. There are many other highly intelligent money managers whose price discovery actions work to keep the market highly efficient (meaning market prices are the best estimate we have of the right price). That makes it unlikely any active money manager will outperform on a risk-adjusted basis.

                               The research shows that gurus’ only value is to make weathermen look good, whether it involves predicting economic growth, interest rates, currencies, or the stock market, or even picking individual stocks.

                               Ignore the prognosticators

                               Larry concludes that while Cramer might provide entertainment, those following his recommendations are like lambs being led to slaughter by more sophisticated institutional investors. He urges investors to keep this in mind the next time they find themselves paying attention to some guru’s latest forecast. You’re best served by ignoring it, he says.

                               The prudent strategy, Larry adds, is to develop a well-thought-out plan and to have the discipline to adhere to it, ignoring the market noise, whether it comes from Jim Cramer or any other prognosticator.

                               Further reading

                               1. Michael Learmonth, “Ratings Flood for Fox, CNN,” Variety, September 27, 2005.
                               2. Jonathan Hartley and Matthew Olson, “Jim Cramer’s Mad Money Charitable Trust Performance and Factor Attribution,” The Journal of Retirement (Summer 2018).
                               3. Paul Bolster, Emery Trahan and Anand Venkateswaran, “How Mad Is Mad Money?”The Journal of Investing (Summer 2012).
                               4. Joseph Engelberg, Caroline Sasseville and Jared Williams, “Is the Market Mad? Evidence from Mad Money,” March 22, 2006.
                               5. Bill Alpert, “Shorting Cramer,” Barron’s (August 20, 2007).
                               6. Jim Cramer, “Cramer vs. Cramer,” New York, May 25, 2007.
                               7. CXO Advisory Group, “Guru Grades,” www.cxoadvisory.com/gurus.
                               
                               

                               Did you miss out on the previous chapters? Check them out:

                               Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                               • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                               • Enrich Your Future 02: How Markets Set Prices
                               • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment]]>In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 35: Mad Money.

                                 LEARNING: Investors are naive, and Cramer is an entertainer, not a financial advisor who adds value.

                                  

                                 “Do not confuse information with value-added information. If you know something because it was in the newspaper, everyone else knows it as well. So it has no value.”

                                 Larry Swedroe

                                  

                                 In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                 Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 35: Mad Money.

                                 Chapter 35: Mad Money

                                 In this chapter, Larry explains why investment advice from so-called market experts is often worthless.

                                 The infamous Jim Cramer

                                 Jim Cramer, a former hedge fund manager, has become one of the most recognizable faces in the investment world. He dispenses rapid-fire investment advice on the show “Mad Money.” Since it premiered in March 2005, it has been one of CNBC’s most-watched shows. But has his advice been as successful for the investors who follow it? Larry shares a couple of research studies that answer this question.

                                 It pays more to invest in an S&P than in Cramer’s fund

                                 Cramer manages a portfolio that invests in many of the stock recommendations he makes on TV. Established in August 2001 with approximately $3 million, the Action Alerts PLUS (AAP) portfolio has been the centerpiece of Cramer’s media company, TheStreet, which sells his financial advice, giving subscribers in the millions access to each trade the portfolio makes ahead of time. Jonathan Hartley and Matthew Olson, authors of the 2018 study “Jim Cramer’s Mad Money Charitable Trust Performance and Factor Attribution,” examined the AAP portfolio’s historical performance. Their study covered the period from August 1, 2001, the AAP portfolio’s inception, through December 31, 2017. The study found that the fund returned a total of 97%. During that same period, an investment in the S&P would have returned 204%.

                                 No real stock-picking skill, just entertainment

                                 In another study, “How Mad Is Mad Money?”, Paul Bolster, Emery Trahan, and Anand Venkateswaran examined Cramer’s buy and sell recommendations for the period from July 28, 2005, through December 31, 2008. They also constructed a portfolio of his recommendations and compared it to a market index. The researchers came to three key conclusions:

                                 • Investors were paying attention, as the stocks he recommended had abnormal returns of almost 2% on the day following his recommendations.
                                 • The returns for the recommended stocks were both positive and significant for the day of the show and the 30 days preceding the show. So, it seems he was recommending stocks with short-term momentum.
                                 • The returns were negative and significant, at -0.33% and -2.1%, for days 2 through 5 and days 2 through 30 following the recommendation. After 30 days, the results are insignificant.
                                 
                                 

                                 There is no evidence of any stock-picking skill—Cramer’s picks are neither good nor bad. In the end, it’s just entertainment.

                                 A third study, “Is the Market Mad? Evidence from Mad Money,” conducted in 2005, found the same result as the second study: prices rise overnight, and they are quickly corrected. This means that Cramer added negative value for the people who tried to implement his advice because they drove the price up in their buying frenzy. Then the smart money comes in, and the price reverts to basically where it was before he made the recommendation.

                                 Do stock market experts reliably provide stock market timing guidance?

                                 In a fourth study, CXO Advisory Group set out to determine if stock market experts, whether self-proclaimed or endorsed by others (such as in the financial media), reliably provide stock market timing guidance.

                                 To find the answer, from 2005 through 2012, they collected and investigated 6,584 forecasts for the US stock market offered publicly by 68 experts (including Cramer), employing technical, fundamental, and sentiment indicators. Their collection included forecasts, all of which were publicly available on the internet, dating back to the end of 1998. They selected experts, both bulls and bears, based on web searches for public archives that contained enough forecasts spanning various market conditions to gauge their accuracy. Basically, they found there are no real experts.

                                 The distribution of their accuracy looks virtually identical to a bell curve but slightly to the left, meaning, on average, they do worse. The average accuracy was 47%, which happened to be the same score as Cramer’s. So, of all the non-expert experts, Cramer was average at being non-expert.

                                 The market is highly efficient for any guru

                                 According to Larry, all these studies indicate that investors are naive, Cramer is an entertainer, not a financial advisor, who adds value, and that the market is highly efficient, making it very hard to beat it.

                                 They also show that being highly intelligent (and entertaining, in Cramer’s case) is not a sufficient condition to outperform the market. The reason is simple. There are many other highly intelligent money managers whose price discovery actions work to keep the market highly efficient (meaning market prices are the best estimate we have of the right price). That makes it unlikely any active money manager will outperform on a risk-adjusted basis.

                                 The research shows that gurus’ only value is to make weathermen look good, whether it involves predicting economic growth, interest rates, currencies, or the stock market, or even picking individual stocks.

                                 Ignore the prognosticators

                                 Larry concludes that while Cramer might provide entertainment, those following his recommendations are like lambs being led to slaughter by more sophisticated institutional investors. He urges investors to keep this in mind the next time they find themselves paying attention to some guru’s latest forecast. You’re best served by ignoring it, he says.

                                 The prudent strategy, Larry adds, is to develop a well-thought-out plan and to have the discipline to adhere to it, ignoring the market noise, whether it comes from Jim Cramer or any other prognosticator.

                                 Further reading

                                 1. Michael Learmonth, “Ratings Flood for Fox, CNN,” Variety, September 27, 2005.
                                 2. Jonathan Hartley and Matthew Olson, “Jim Cramer’s Mad Money Charitable Trust Performance and Factor Attribution,” The Journal of Retirement (Summer 2018).
                                 3. Paul Bolster, Emery Trahan and Anand Venkateswaran, “How Mad Is Mad Money?”The Journal of Investing (Summer 2012).
                                 4. Joseph Engelberg, Caroline Sasseville and Jared Williams, “Is the Market Mad? Evidence from Mad Money,” March 22, 2006.
                                 5. Bill Alpert, “Shorting Cramer,” Barron’s (August 20, 2007).
                                 6. Jim Cramer, “Cramer vs. Cramer,” New York, May 25, 2007.
                                 7. CXO Advisory Group, “Guru Grades,” www.cxoadvisory.com/gurus.
                                 
                                 

                                 Did you miss out on the previous chapters? Check them out:

                                 Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                                 • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                 • Enrich Your Future 02: How Markets Set Prices
                                 • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                 • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                 • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                 • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                 • Enrich Your Future 07: The Value of Security Analysis
                                 • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                 • Enrich Your Future 09: The Fed Model and the Money Illusion
                                 
                                 

                                 Part II: Strategic Portfolio Decisions

                                 • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                 • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                                 • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                                 • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                                 • Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
                                 • Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
                                 • Enrich Your Future 16: The Estimated Return Is Not Inevitable
                                 • Enrich Your Future 17: Take a Portfolio Approach to Your Investments
                                 • Enrich Your Future 18: Build a Portfolio That Can Withstand the Black Swans
                                 • Enrich Your Future 19: The Gold Illusion: Why Investing in Gold May Not Be Safe
                                 • Enrich Your Future 20: Passive Investing Is the Key to Prudent Wealth Management
                                 
                                 

                                 Part III: Behavioral Finance: We Have Met the Enemy and He Is Us

                                 • Enrich Your Future 21: Think You Can Beat the Market? Think Again
                                 • Enrich Your Future 22: Some Risks Are Not Worth Taking
                                 • Enrich Your Future 23: Seeing Through the Frame: Making Better Investment Decisions
                                 • Enrich Your Future 24: Why Smart People Do Dumb Things
                                 • Enrich Your Future 25: Stock Crashes Happen—Be Prepared
                                 • Enrich Your Future 26: Should You Invest Now or Spread It Out?
                                 • Enrich Your Future 27: Pascal’s Wager: Betting on Consequences Over Probabilities
                                 • Enrich Your Future 28 & 29: How to Outsmart Your Investing Biases
                                 • Enrich Your Future 30: The Hidden Cost of Chasing Dividend Stocks
                                 • Enrich Your Future 31: Risk vs. Uncertainty: The Investor’s Blind Spot
                                 
                                 

                                 Part IV: Playing the Winner’s Game in Life and Investing

                                 • Enrich Your Future 32: Trying to Beat the Market Is a Fool’s Errand
                                 • Enrich Your Future 33: The Market Doesn’t Care How Smart You Are
                                 • Enrich Your Future 34: Embrace the Bear: Why Market Crashes Are Your Silent Ally
                                 
                                 

                                 About Larry Swedroe

                                 Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                 Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                 Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                 Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                  

                                 [spp-transcript]

                                  

                                 Connect with Larry Swedroe

                                 • LinkedIn
                                 • X
                                 • Website
                                 • Books
                                 
                                 

                                 Andrew’s books

                                 • How to Start Building Your Wealth Investing in the Stock Market
                                 • My Worst Investment Ever
                                 • 9 Valuation Mistakes and How to Avoid Them
                                 • Transform Your Business with...]]>7d8b07b2-d84a-4e4a-8967-4637617bf0afTue, 24 Jun 2025 06:00:00 +070031:43falsefullMike Koenigs - A Founder’s Character Is Bigger Than Their CharismaBIO: Mike Koenigs is a serial entrepreneur with five successful exits, a 19-time bestselling author, and a top strategist for founders post-exit.

                                   STORY: Mike invested big in a SaaS startup set up for success, but infighting brought it to its knees.

                                   LEARNING: Character is bigger than charisma.

                                    

                                   “If you’re a shareholder, your best exit is for a big company to come and buy what they believe is money at a discount.”

                                   Mike Koenigs

                                    

                                   Guest profile

                                   Mike Koenigs is a serial entrepreneur with five successful exits, a 19-time bestselling author, and a top strategist for founders post-exit. He helps build powerful personal brands in just one week and pioneers Generative AI for executives, speaking at elite events like Abundance 360, MIT, and Tony Robbins’ gatherings.

                                   Worst investment ever

                                   Mike learned about a SaaS startup from a client with whom he had spent time and had gotten to know, like, and trust him. So, when the client introduced Mike to this deal, he got interested.

                                   The startup looked great, so he invested a substantial amount of money and then doubled down because it got even better.

                                   Off to a promising start

                                   The basic premise was that it was a pool. The founders would find SaaS companies with customers, momentum, technology, and a bit of a moat. They had much experience and success, such as a 10x dividend to investors in three years.

                                   Infighting paralyzes everything

                                   Unfortunately, the two founders started fighting. One of them locked the other one out of everything. They had the majority and equal shareholding, making infighting even worse. The remaining partner started emptying the coffers.

                                   Someone doing the books became a whistleblower and revealed the shenanigans going on. The partner was siphoning off money, building a house, going on big trips, using private jets everywhere, etc. It got uglier and uglier, causing the shareholders to file lawsuits, and the FTC got involved. Years have gone by, and things are still shut down.

                                   Lessons learned

                                   • Time kills deals.
                                   • Character is bigger than charisma. Crooked founders will gut you faster than any market downturn.
                                   • Put all that money into index funds and let it compound.
                                   
                                   

                                   Andrew’s takeaways

                                   • The only way to invest as an angel investor is to invest in 10 startups. Don’t do it if you are not prepared with the money and time to do that.
                                   
                                   

                                   Actionable advice

                                   Unless you’re a full-time VC with deal flow, customer channels, or an exit mapped out, keep your money in things you can control. If you’re a shareholder, your best exit is for a big company to come and buy what they believe is money at a discount.

                                   Mike’s recommendations

                                   Mike recommends learning to build a brand that will elevate everything you touch for the rest of your life. He suggests reading his book, Your Next Act: The Six Growth Accelerators for Creating a Business You’ll Love for the Rest of Your Life, to help you build your brand. He also recommends immersing yourself in AI and learning how to use it effectively.

                                   No.1 goal for the next 12 months

                                   Mike’s number one goal for the next 12 months is to become an international citizen. He wants to continue living his beautiful life in multiple locations and working with more entrepreneurs worldwide.

                                   Parting words

                                    

                                   “Go out and build your brand. You will get access to better deals faster at a discounted price.”

                                   Mike Koenigs

                                    

                                   [spp-transcript]

                                    

                                   Connect with Mike Koenigs

                                   • LinkedIn
                                   • Facebook
                                   • Instagram
                                   • Podcast
                                   • Website
                                   • Books
                                   
                                   

                                   Andrew’s books

                                   • How to Start Building Your Wealth Investing in the Stock Market
                                   • My Worst Investment Ever
                                   • 9 Valuation Mistakes and How to Avoid Them
                                   • Transform Your Business with Dr.Deming’s 14 Points
                                   
                                   

                                   Andrew’s online programs

                                   • Valuation Master Class
                                   • The Become a Better Investor Community
                                   • How to Start Building Your Wealth Investing in the Stock Market
                                   • Finance Made Ridiculously Simple
                                   • FVMR Investing: Quantamental Investing Across the World
                                   • Become a Great Presenter and Increase Your Influence
                                   • Transform Your Business with Dr. Deming’s 14 Points
                                   • Achieve Your Goals
                                   
                                   

                                   Connect with Andrew Stotz:

                                   • astotz.com
                                   • LinkedIn
                                   • Facebook
                                   • Instagram
                                   • Threads
                                   • X
                                   • YouTube
                                   • My Worst Investment Ever Podcast
                                   
                                   ]]>BIO: Mike Koenigs is a serial entrepreneur with five successful exits, a 19-time bestselling author, and a top strategist for founders post-exit.

                                   STORY: Mike invested big in a SaaS startup set up for success, but infighting brought it to its knees.

                                   LEARNING: Character is bigger than charisma.

                                    

                                   “If you’re a shareholder, your best exit is for a big company to come and buy what they believe is money at a discount.”

                                   Mike Koenigs

                                    

                                   Guest profile

                                   Mike Koenigs is a serial entrepreneur with five successful exits, a 19-time bestselling author, and a top strategist for founders post-exit. He helps build powerful personal brands in just one week and pioneers Generative AI for executives, speaking at elite events like Abundance 360, MIT, and Tony Robbins’ gatherings.

                                   Worst investment ever

                                   Mike learned about a SaaS startup from a client with whom he had spent time and had gotten to know, like, and trust him. So, when the client introduced Mike to this deal, he got interested.

                                   The startup looked great, so he invested a substantial amount of money and then doubled down because it got even better.

                                   Off to a promising start

                                   The basic premise was that it was a pool. The founders would find SaaS companies with customers, momentum, technology, and a bit of a moat. They had much experience and success, such as a 10x dividend to investors in three years.

                                   Infighting paralyzes everything

                                   Unfortunately, the two founders started fighting. One of them locked the other one out of everything. They had the majority and equal shareholding, making infighting even worse. The remaining partner started emptying the coffers.

                                   Someone doing the books became a whistleblower and revealed the shenanigans going on. The partner was siphoning off money, building a house, going on big trips, using private jets everywhere, etc. It got uglier and uglier, causing the shareholders to file lawsuits, and the FTC got involved. Years have gone by, and things are still shut down.

                                   Lessons learned

                                   • Time kills deals.
                                   • Character is bigger than charisma. Crooked founders will gut you faster than any market downturn.
                                   • Put all that money into index funds and let it compound.
                                   
                                   

                                   Andrew’s takeaways

                                   • The only way to invest as an angel investor is to invest in 10 startups. Don’t do it if you are not prepared with the money and time to do that.
                                   
                                   

                                   Actionable advice

                                   Unless you’re a full-time VC with deal flow, customer channels, or an exit mapped out, keep your money in things you can control. If you’re a shareholder, your best exit is for a big company to come and buy what they believe is money at a discount.

                                   Mike’s recommendations

                                   Mike recommends learning to build a brand that will elevate everything you touch for the rest of your life. He suggests reading his book, Your Next Act: The Six Growth Accelerators for Creating a Business You’ll Love for the Rest of Your Life, to help you build your brand. He also recommends immersing yourself in AI and learning how to use it effectively.

                                   No.1 goal for the next 12 months

                                   Mike’s number one goal for the next 12 months is to become an international citizen. He wants to continue living his beautiful life in multiple locations and working with more entrepreneurs worldwide.

                                   Parting words

                                    

                                   “Go out and build your brand. You will get access to better deals faster at a discounted price.”

                                   Mike Koenigs

                                    

                                   [spp-transcript]

                                    

                                   Connect with Mike Koenigs

                                   • LinkedIn
                                   • Facebook
                                   • Instagram
                                   • Podcast
                                   • Website
                                   • Books
                                   
                                   

                                   Andrew’s books

                                   • How to Start Building Your Wealth Investing in the Stock Market
                                   • My Worst Investment Ever
                                   • 9 Valuation Mistakes and How to Avoid Them
                                   • Transform Your Business with Dr.Deming’s 14 Points
                                   
                                   

                                   Andrew’s online programs

                                   • Valuation Master Class
                                   • The Become a Better Investor Community
                                   • How to Start Building Your Wealth Investing in the Stock Market
                                   • Finance Made Ridiculously Simple
                                   • FVMR Investing: Quantamental Investing Across the World
                                   • Become a Great Presenter and Increase Your Influence
                                   • Transform Your Business with Dr. Deming’s 14 Points
                                   • Achieve Your Goals
                                   
                                   

                                   Connect with Andrew Stotz:

                                   • astotz.com
                                   • LinkedIn
                                   • Facebook
                                   • Instagram
                                   • Threads
                                   • X
                                   • YouTube
                                   • My Worst Investment Ever Podcast
                                   
                                   ]]>992dc960-1908-4975-bbf7-1515d40e1a9cTue, 17 Jun 2025 06:00:00 +070037:51falsefullEnrich Your Future 34: Embrace the Bear: Why Market Crashes Are Your Silent AllyIn this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 34: Bear Markets: A Necessary Evil.

                                   LEARNING: Investors must view bear markets as necessary evils.

                                    

                                   “If stocks didn’t experience the kind of bear markets that we have, investors would be very unhappy.”

                                   Larry Swedroe

                                    

                                   In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                   Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 34: Bear Markets: A Necessary Evil.

                                   Chapter 34: Bear Markets: A Necessary Evil

                                   In this chapter, Larry explains why investors must view bear markets as necessary evils. He says that if stocks didn’t experience the kind of bear markets that we have, investors would be very unhappy.

                                   Larry further explains that the most basic finance principle is the relationship between risk and expected, but not guaranteed, return. So, the higher the risk, the higher the expected return, which means that if the risk is high, investors will apply a bigger risk premium, which will lead to the denominator in the formula of the Net Present Value. The numerator is the expected earnings. The denominator is the risk-free rate plus the risk premium.

                                   The higher the risk, the higher the premiums

                                   Larry highlights historical bear markets, noting the U.S. has experienced losses exceeding 34% during the COVID crisis and 51% from 2007 to 2009. He argues that these losses are essential for investors to demand higher risk premiums. The very fact that investors have experienced such significant losses leads them to price stocks with a large risk premium.

                                   From 1926 through 2022, the S&P provided an annual risk premium over one-month Treasury bills of 8.2% and an annualized premium of 6.9%. If the losses that investors experienced had been smaller, the risk premium would also have been smaller. And the smaller the losses experienced, the smaller the premium would have been.

                                   In other words, the less risk investors perceive, the higher the price they are willing to pay for stocks. And the higher the market’s price-to-earnings ratio, the lower the future returns.

                                   Staying the course during underperformance

                                   The bottom line, Larry says, is that bear markets are necessary for the creation of the large equity risk premium we have experienced. Thus, if investors want stocks to provide high expected returns, bear markets (while painful to endure) should be considered a necessary evil.

                                   However, Larry notes that it is during the periods of underperformance that investor discipline is tested. Unfortunately, the evidence suggests that most investors significantly underperform the stock market and the mutual funds they invest in. The underperformance is because investors act like generals fighting the last war.

                                   Subject to recency bias (the tendency to overweight recent events/trends and ignore long-term evidence), they observe yesterday’s winners and jump on the bandwagon—buying high—and they observe yesterday’s losers and abandon ship—selling low. It is almost as if investors believe they can buy yesterday’s returns when they can only buy tomorrow’s.

                                   Keys to successful investing

                                   Larry shares three keys to successful investing to ensure you get the most from your investments even during bear markets.

                                   The first key is to have a well-thought-out plan that includes understanding the nature of the risks of investing. That means accepting that bear markets are inevitable and must be built into the plan.

                                   This understanding will help you feel prepared and less anxious when bear markets occur. It also means having the discipline to stay the course when it is most difficult (partly because the media will be filled with stories of economic doom and gloom).

                                   What is particularly difficult is that staying the course does not just mean buying and holding. Adhering to a plan requires that investors rebalance their portfolio, maintaining their desired asset allocation. That means that investors must buy stocks during bear markets and sell them in bull markets.

                                   The second key to successful investing, Larry suggests, is to avoid taking more risk than you have the ability, willingness, and need to take. By steering clear of excessive risk, investors are more likely to stay the course and avoid the common buy high/sell low pattern that most investors fall into.

                                   The last key is to understand that trying to time the market is a loser’s game—one that is possible to win but not prudent to try because the odds of doing so are so poor.

                                   Further reading

                                   1. 1996 Annual Report of Berkshire Hathaway.
                                   2. 1992 Annual Report of Berkshire Hathaway.
                                   3. 1991 Annual Report of Berkshire Hathaway.
                                   4. 2006 Annual Report of Berkshire Hathaway.
                                   5. 2004 Annual Report of Berkshire Hathaway.
                                   
                                   

                                   Did you miss out on the previous chapters? Check them out:

                                   Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                                   • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                   • Enrich Your Future 02: How Markets Set Prices
                                   • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                   • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                   • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                   • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                   • Enrich Your Future 07: The Value of Security Analysis
                                   • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                   • Enrich Your Future 09: The Fed Model and the Money Illusion
                                   
                                   

                                   Part II: Strategic Portfolio Decisions

                                   • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                   • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                                   • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                                   • In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 34: Bear Markets: A Necessary Evil.

                                     LEARNING: Investors must view bear markets as necessary evils.

                                      

                                     “If stocks didn’t experience the kind of bear markets that we have, investors would be very unhappy.”

                                     Larry Swedroe

                                      

                                     In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                     Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 34: Bear Markets: A Necessary Evil.

                                     Chapter 34: Bear Markets: A Necessary Evil

                                     In this chapter, Larry explains why investors must view bear markets as necessary evils. He says that if stocks didn’t experience the kind of bear markets that we have, investors would be very unhappy.

                                     Larry further explains that the most basic finance principle is the relationship between risk and expected, but not guaranteed, return. So, the higher the risk, the higher the expected return, which means that if the risk is high, investors will apply a bigger risk premium, which will lead to the denominator in the formula of the Net Present Value. The numerator is the expected earnings. The denominator is the risk-free rate plus the risk premium.

                                     The higher the risk, the higher the premiums

                                     Larry highlights historical bear markets, noting the U.S. has experienced losses exceeding 34% during the COVID crisis and 51% from 2007 to 2009. He argues that these losses are essential for investors to demand higher risk premiums. The very fact that investors have experienced such significant losses leads them to price stocks with a large risk premium.

                                     From 1926 through 2022, the S&P provided an annual risk premium over one-month Treasury bills of 8.2% and an annualized premium of 6.9%. If the losses that investors experienced had been smaller, the risk premium would also have been smaller. And the smaller the losses experienced, the smaller the premium would have been.

                                     In other words, the less risk investors perceive, the higher the price they are willing to pay for stocks. And the higher the market’s price-to-earnings ratio, the lower the future returns.

                                     Staying the course during underperformance

                                     The bottom line, Larry says, is that bear markets are necessary for the creation of the large equity risk premium we have experienced. Thus, if investors want stocks to provide high expected returns, bear markets (while painful to endure) should be considered a necessary evil.

                                     However, Larry notes that it is during the periods of underperformance that investor discipline is tested. Unfortunately, the evidence suggests that most investors significantly underperform the stock market and the mutual funds they invest in. The underperformance is because investors act like generals fighting the last war.

                                     Subject to recency bias (the tendency to overweight recent events/trends and ignore long-term evidence), they observe yesterday’s winners and jump on the bandwagon—buying high—and they observe yesterday’s losers and abandon ship—selling low. It is almost as if investors believe they can buy yesterday’s returns when they can only buy tomorrow’s.

                                     Keys to successful investing

                                     Larry shares three keys to successful investing to ensure you get the most from your investments even during bear markets.

                                     The first key is to have a well-thought-out plan that includes understanding the nature of the risks of investing. That means accepting that bear markets are inevitable and must be built into the plan.

                                     This understanding will help you feel prepared and less anxious when bear markets occur. It also means having the discipline to stay the course when it is most difficult (partly because the media will be filled with stories of economic doom and gloom).

                                     What is particularly difficult is that staying the course does not just mean buying and holding. Adhering to a plan requires that investors rebalance their portfolio, maintaining their desired asset allocation. That means that investors must buy stocks during bear markets and sell them in bull markets.

                                     The second key to successful investing, Larry suggests, is to avoid taking more risk than you have the ability, willingness, and need to take. By steering clear of excessive risk, investors are more likely to stay the course and avoid the common buy high/sell low pattern that most investors fall into.

                                     The last key is to understand that trying to time the market is a loser’s game—one that is possible to win but not prudent to try because the odds of doing so are so poor.

                                     Further reading

                                     1. 1996 Annual Report of Berkshire Hathaway.
                                     2. 1992 Annual Report of Berkshire Hathaway.
                                     3. 1991 Annual Report of Berkshire Hathaway.
                                     4. 2006 Annual Report of Berkshire Hathaway.
                                     5. 2004 Annual Report of Berkshire Hathaway.
                                     
                                     

                                     Did you miss out on the previous chapters? Check them out:

                                     Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                                     • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                     • Enrich Your Future 02: How Markets Set Prices
                                     • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                     • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                     • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                     • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                     • Enrich Your Future 07: The Value of Security Analysis
                                     • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                     • Enrich Your Future 09: The Fed Model and the Money Illusion
                                     
                                     

                                     Part II: Strategic Portfolio Decisions

                                     • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                     • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                                     • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                                     • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                                     • Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
                                     • Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
                                     • Enrich Your Future 16: The Estimated Return Is Not Inevitable
                                     • Enrich Your Future 17: Take a Portfolio Approach to Your Investments
                                     • Enrich Your Future 18: Build a Portfolio That Can Withstand the Black Swans
                                     • Enrich Your Future 19: The Gold Illusion: Why Investing in Gold May Not Be Safe
                                     • Enrich Your Future 20: Passive Investing Is the Key to Prudent Wealth Management
                                     
                                     

                                     Part III: Behavioral Finance: We Have Met the Enemy and He Is Us

                                     • Enrich Your Future 21: Think You Can Beat the Market? Think Again
                                     • Enrich Your Future 22: Some Risks Are Not Worth Taking
                                     • Enrich Your Future 23: Seeing Through the Frame: Making Better Investment Decisions
                                     • Enrich Your Future 24: Why Smart People Do Dumb Things
                                     • Enrich Your Future 25: Stock Crashes Happen—Be Prepared
                                     • Enrich Your Future 26: Should You Invest Now or Spread It Out?
                                     • Enrich Your Future 27: Pascal’s Wager: Betting on Consequences Over Probabilities
                                     • Enrich Your Future 28 & 29: How to Outsmart Your Investing Biases
                                     • Enrich Your Future 30: The Hidden Cost of Chasing Dividend Stocks
                                     • Enrich Your Future 31: Risk vs. Uncertainty: The Investor’s Blind Spot
                                     
                                     

                                     Part IV: Playing the Winner’s Game in Life and Investing

                                     • Enrich Your Future 32: Trying to Beat the Market Is a Fool’s Errand
                                     • Enrich Your Future 33: The Market Doesn’t Care How Smart You Are
                                     
                                     

                                     About Larry Swedroe

                                     Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                     Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                     Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                     Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                      

                                     [spp-transcript]

                                      

                                     Connect with Larry Swedroe

                                     • LinkedIn
                                     • X
                                     • Website
                                     • Books
                                     
                                     

                                     Andrew’s books

                                     • How to Start Building Your Wealth Investing in the Stock Market
                                     • My Worst Investment Ever
                                     • 9 Valuation Mistakes and How to Avoid Them
                                     • Transform Your Business with Dr.Deming’s 14 Points
                                     
                                     

                                     Andrew’s online programs

                                     • Valuation Master Class
                                     • The Become a Better Investor Community
                                     • How to Start Building Your Wealth Investing in the Stock Market
                                     • Finance Made Ridiculously Simple
                                     • FVMR Investing: Quantamental Investing Across the World
                                     • Become a Great Presenter and Increase Your Influence
                                     • Transform Your Business with Dr. Deming’s 14 Points
                                     • Achieve Your Goals
                                     
                                     

                                     Connect with Andrew Stotz:

                                     • astotz.com
                                     • LinkedIn
                                     • Facebook
                                     • Instagram
                                     • Threads
                                     • X
                                     • YouTube
                                     • My Worst Investment Ever Podcast
                                     
                                     ]]>cf5c83d1-6f9d-4e83-b3c7-16a6c629cdffTue, 10 Jun 2025 06:00:00 +070034:20falsefullJeff Sarti – The Only Way to Learn? Lose Money First (Wisely)BIO: Jeff Sarti, CEO of Morton Wealth, leads a firm managing over $3 billion in assets. With a mission to empower better investors, Jeff helps clients achieve their financial goals while supporting employees in their career growth.

                                     STORY: Jeff bought a few dot-com companies, thinking it was smart and safe because he bought the big brands. All of the companies dropped 90%+.

                                     LEARNING: Don’t let greed, FOMO, and a lack of imagination drive you to a bad investment.

                                      

                                     “Don’t take shortcuts. If you do, at least know that you’re gambling and speculating. That’s different from investing.”

                                     Jeff Sarti

                                      

                                     Guest profile

                                     Jeff Sarti, CEO of Morton Wealth, leads a firm managing over $3 billion in assets. With a mission to empower better investors, Jeff helps clients achieve their financial goals while supporting employees in their career growth. A CFA charterholder, Jeff shares his insights through his Perspective newsletter. His expertise emphasizes challenging the status quo and fostering long-term, resilient investment strategies.

                                     Worst investment ever

                                     In the late 90s, during the dot-com boom, Jeff had just started making a bit of money. He bought a few dot-com companies, thinking it was smart and safe because he bought the big brands. All of the companies dropped 90%+ after a while.

                                     Lessons learned

                                     • Don’t let greed, FOMO, and a lack of imagination drive you to a bad investment.
                                     • Always do your research.
                                     
                                     

                                     Andrew’s takeaways

                                     • When prices get untethered from earnings growth, our expectation of the future is what matters.
                                     
                                     

                                     Actionable advice

                                     The only way you can learn is by doing and making mistakes. But before you start doing, do the research, understand the underlying risk factors of your investments, and don’t take shortcuts.

                                     If you do, at least know you’re speculating and not investing. Keep that speculative piece of your portfolio small. It’s always a good idea to balance speculative investments with more traditional, long-term investment strategies for a more secure financial future.

                                     Jeff’s recommendations

                                     Jeff recommends checking out resources on his website, such as his investment guides and market analysis, and signing up for his quarterly newsletter if you want financial education.

                                     He also recommends reading Thinking Fast and Slow by Daniel Kahneman and books by Morgan Housel to understand how emotions drive investment decisions.

                                     No.1 goal for the next 12 months

                                     Jeff’s number one goal for the next 12 months is to continue traveling the country with his investment team, uncovering some new niche opportunities.

                                     Parting words

                                      

                                     “I really enjoyed the conversation. It was a lot of fun.”

                                     Jeff Sarti

                                      

                                     [spp-transcript]

                                      

                                     Connect with Jeff Sarti

                                     • LinkedIn
                                     • Blog
                                     
                                     

                                     Andrew’s books

                                     • How to Start Building Your Wealth Investing in the Stock Market
                                     • My Worst Investment Ever
                                     • 9 Valuation Mistakes and How to Avoid Them
                                     • Transform Your Business with Dr.Deming’s 14 Points
                                     
                                     

                                     Andrew’s online programs

                                     • Valuation Master Class
                                     • The Become a Better Investor Community
                                     • How to Start Building Your Wealth Investing in the Stock Market
                                     • Finance Made Ridiculously Simple
                                     • FVMR Investing: Quantamental Investing Across the World
                                     • Become a Great Presenter and Increase Your Influence
                                     • Transform Your Business with Dr. Deming’s 14 Points
                                     • Achieve Your Goals
                                     
                                     

                                     Connect with Andrew Stotz:

                                     • astotz.com
                                     • LinkedIn
                                     • Facebook
                                     • Instagram
                                     • Threads
                                     • X
                                     • YouTube
                                     • My Worst Investment Ever Podcast
                                     
                                     ]]>BIO: Jeff Sarti, CEO of Morton Wealth, leads a firm managing over $3 billion in assets. With a mission to empower better investors, Jeff helps clients achieve their financial goals while supporting employees in their career growth.

                                     STORY: Jeff bought a few dot-com companies, thinking it was smart and safe because he bought the big brands. All of the companies dropped 90%+.

                                     LEARNING: Don’t let greed, FOMO, and a lack of imagination drive you to a bad investment.

                                      

                                     “Don’t take shortcuts. If you do, at least know that you’re gambling and speculating. That’s different from investing.”

                                     Jeff Sarti

                                      

                                     Guest profile

                                     Jeff Sarti, CEO of Morton Wealth, leads a firm managing over $3 billion in assets. With a mission to empower better investors, Jeff helps clients achieve their financial goals while supporting employees in their career growth. A CFA charterholder, Jeff shares his insights through his Perspective newsletter. His expertise emphasizes challenging the status quo and fostering long-term, resilient investment strategies.

                                     Worst investment ever

                                     In the late 90s, during the dot-com boom, Jeff had just started making a bit of money. He bought a few dot-com companies, thinking it was smart and safe because he bought the big brands. All of the companies dropped 90%+ after a while.

                                     Lessons learned

                                     • Don’t let greed, FOMO, and a lack of imagination drive you to a bad investment.
                                     • Always do your research.
                                     
                                     

                                     Andrew’s takeaways

                                     • When prices get untethered from earnings growth, our expectation of the future is what matters.
                                     
                                     

                                     Actionable advice

                                     The only way you can learn is by doing and making mistakes. But before you start doing, do the research, understand the underlying risk factors of your investments, and don’t take shortcuts.

                                     If you do, at least know you’re speculating and not investing. Keep that speculative piece of your portfolio small. It’s always a good idea to balance speculative investments with more traditional, long-term investment strategies for a more secure financial future.

                                     Jeff’s recommendations

                                     Jeff recommends checking out resources on his website, such as his investment guides and market analysis, and signing up for his quarterly newsletter if you want financial education.

                                     He also recommends reading Thinking Fast and Slow by Daniel Kahneman and books by Morgan Housel to understand how emotions drive investment decisions.

                                     No.1 goal for the next 12 months

                                     Jeff’s number one goal for the next 12 months is to continue traveling the country with his investment team, uncovering some new niche opportunities.

                                     Parting words

                                      

                                     “I really enjoyed the conversation. It was a lot of fun.”

                                     Jeff Sarti

                                      

                                     [spp-transcript]

                                      

                                     Connect with Jeff Sarti

                                     • LinkedIn
                                     • Blog
                                     
                                     

                                     Andrew’s books

                                     • How to Start Building Your Wealth Investing in the Stock Market
                                     • My Worst Investment Ever
                                     • 9 Valuation Mistakes and How to Avoid Them
                                     • Transform Your Business with Dr.Deming’s 14 Points
                                     
                                     

                                     Andrew’s online programs

                                     • Valuation Master Class
                                     • The Become a Better Investor Community
                                     • How to Start Building Your Wealth Investing in the Stock Market
                                     • Finance Made Ridiculously Simple
                                     • FVMR Investing: Quantamental Investing Across the World
                                     • Become a Great Presenter and Increase Your Influence
                                     • Transform Your Business with Dr. Deming’s 14 Points
                                     • Achieve Your Goals
                                     
                                     

                                     Connect with Andrew Stotz:

                                     • astotz.com
                                     • LinkedIn
                                     • Facebook
                                     • Instagram
                                     • Threads
                                     • X
                                     • YouTube
                                     • My Worst Investment Ever Podcast
                                     
                                     ]]>d1ad3cae-f61d-493d-8aec-22a3e5fa8f22Tue, 03 Jun 2025 06:00:00 +070059:10falsefullEnrich Your Future 33: The Market Doesn’t Care How Smart You AreIn this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 33: An Investor’s Worst Enemy.

                                     LEARNING: You are your own worst enemy when it comes to investing.

                                      

                                     “The right strategy is to avoid the loser’s game. Don’t try to pick individual stocks or time the market, just invest in a disciplined way, and you will win by getting the market’s return.”

                                     Larry Swedroe

                                      

                                     In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                     Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 33: An Investor’s Worst Enemy.

                                     Chapter 33: An Investor’s Worst Enemy

                                     In this chapter, Larry demonstrates why investors are their own worst enemies. He observes that many people think the key to investing is identifying the stocks that will outperform the market and avoiding the ones that will underperform.

                                     Yet the vast body of evidence says that’s playing the losers’ game. He adds that most professionals with advanced degrees in finance and mathematics, with access to the best databases and huge advantages over individuals, often think they’re smart enough to beat the market.

                                     They do so by attempting to uncover individual securities they believe the rest of the market has somehow mispriced (the price is too high or too low). They also try to time their investment decisions to buy when the market is “undervalued” and sell when it is “overvalued.”

                                     However, evidence shows that 98% of them fail to outperform in any statistically significant way on a risk-adjusted basis, even before taxes. As historian and author Peter Bernstein puts it: “The essence of investment theory is that being smart is not a sufficient condition for being rich.”

                                     Why do people keep playing the loser’s game?

                                     In the face of such overwhelming evidence, the puzzling question is why people keep trying to play a game they are likely to lose. From Larry’s perspective, there are four explanations:

                                     1. Because our education system has failed investors and Wall Street, and most financial media want to conceal the evidence, people are unaware of it.
                                     2. While the evidence suggests that playing the game of active management is the triumph of hope over wisdom and experience, hope does spring eternal—after all, a small minority succeed.
                                     3. Active management is exciting, while passive management is boring.
                                     4. Investors are overconfident—a normal human condition, not limited to investing. While each investor might admit that it’s hard to beat the market, each believes he will be one of the few who succeed.
                                     
                                     

                                     So, what is the right strategy?

                                     In light of the evidence presented, Larry’s advice is clear: avoid the losers’ game. Instead of trying to pick individual stocks or time the market, he advocates for a disciplined approach to investing. Investors can win by staying the course through bear markets by simply getting the market’s returns. This, he argues, is the right strategy for successful investing.

                                     Suppose you choose to play the game of active investing. In that case, Larry warns, the only ones likely to benefit are your financial advisor, broker-dealer, the manager of the actively managed fund, and the publisher of the newsletter or ratings service you subscribe to. The odds are overwhelmingly against individual investors in this game, making it a futile endeavor.

                                     Further reading

                                     1. Jonathan Fuerbringer, “Investing It,” New York Times, March 30, 1997.
                                     2. Robert McGough, “The Secret (Active) Dreams of an Indexer,” Wall Street Journal, February 25, 1997.
                                     3. Peter Bernstein, The Portable MBA in Investment (Wiley, 1995).
                                     4. Jonathan Clements, 25 Myths You’ve Got to Avoid (Simon & Schuster, 1998).
                                     5. James H. Smalhout, “Too Close to Your Money?” Bloomberg Personal (November 1997).
                                     6. Gary Belsky and Thomas Gilovich, Why Smart People Make Big Money Mistakes (Simon & Schuster, 1999).
                                     7. Peter L. Bernstein and Aswath Damodaran (editors), Investment Management (Wiley, 1998).
                                     8. Ron Ross, The Unbeatable Market (Optimum Press, 2002).
                                     
                                     

                                     Did you miss out on the previous chapters? Check them out:

                                     Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                                     • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                     • Enrich Your Future 02: How Markets Set Prices
                                     • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                     • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                     • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                     • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                     • Enrich Your Future 07: The Value of Security Analysis
                                     • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                     • Enrich Your Future 09: The Fed Model and the Money Illusion
                                     
                                     

                                     Part II: Strategic Portfolio Decisions

                                     • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                     • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                                     • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                                     • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                                     • Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
                                     • Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
                                     • Enrich Your Future 16: The Estimated Return]]>In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 33: An Investor’s Worst Enemy.

                                       LEARNING: You are your own worst enemy when it comes to investing.

                                        

                                       “The right strategy is to avoid the loser’s game. Don’t try to pick individual stocks or time the market, just invest in a disciplined way, and you will win by getting the market’s return.”

                                       Larry Swedroe

                                        

                                       In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                       Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 33: An Investor’s Worst Enemy.

                                       Chapter 33: An Investor’s Worst Enemy

                                       In this chapter, Larry demonstrates why investors are their own worst enemies. He observes that many people think the key to investing is identifying the stocks that will outperform the market and avoiding the ones that will underperform.

                                       Yet the vast body of evidence says that’s playing the losers’ game. He adds that most professionals with advanced degrees in finance and mathematics, with access to the best databases and huge advantages over individuals, often think they’re smart enough to beat the market.

                                       They do so by attempting to uncover individual securities they believe the rest of the market has somehow mispriced (the price is too high or too low). They also try to time their investment decisions to buy when the market is “undervalued” and sell when it is “overvalued.”

                                       However, evidence shows that 98% of them fail to outperform in any statistically significant way on a risk-adjusted basis, even before taxes. As historian and author Peter Bernstein puts it: “The essence of investment theory is that being smart is not a sufficient condition for being rich.”

                                       Why do people keep playing the loser’s game?

                                       In the face of such overwhelming evidence, the puzzling question is why people keep trying to play a game they are likely to lose. From Larry’s perspective, there are four explanations:

                                       1. Because our education system has failed investors and Wall Street, and most financial media want to conceal the evidence, people are unaware of it.
                                       2. While the evidence suggests that playing the game of active management is the triumph of hope over wisdom and experience, hope does spring eternal—after all, a small minority succeed.
                                       3. Active management is exciting, while passive management is boring.
                                       4. Investors are overconfident—a normal human condition, not limited to investing. While each investor might admit that it’s hard to beat the market, each believes he will be one of the few who succeed.
                                       
                                       

                                       So, what is the right strategy?

                                       In light of the evidence presented, Larry’s advice is clear: avoid the losers’ game. Instead of trying to pick individual stocks or time the market, he advocates for a disciplined approach to investing. Investors can win by staying the course through bear markets by simply getting the market’s returns. This, he argues, is the right strategy for successful investing.

                                       Suppose you choose to play the game of active investing. In that case, Larry warns, the only ones likely to benefit are your financial advisor, broker-dealer, the manager of the actively managed fund, and the publisher of the newsletter or ratings service you subscribe to. The odds are overwhelmingly against individual investors in this game, making it a futile endeavor.

                                       Further reading

                                       1. Jonathan Fuerbringer, “Investing It,” New York Times, March 30, 1997.
                                       2. Robert McGough, “The Secret (Active) Dreams of an Indexer,” Wall Street Journal, February 25, 1997.
                                       3. Peter Bernstein, The Portable MBA in Investment (Wiley, 1995).
                                       4. Jonathan Clements, 25 Myths You’ve Got to Avoid (Simon & Schuster, 1998).
                                       5. James H. Smalhout, “Too Close to Your Money?” Bloomberg Personal (November 1997).
                                       6. Gary Belsky and Thomas Gilovich, Why Smart People Make Big Money Mistakes (Simon & Schuster, 1999).
                                       7. Peter L. Bernstein and Aswath Damodaran (editors), Investment Management (Wiley, 1998).
                                       8. Ron Ross, The Unbeatable Market (Optimum Press, 2002).
                                       
                                       

                                       Did you miss out on the previous chapters? Check them out:

                                       Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                                       • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                       • Enrich Your Future 02: How Markets Set Prices
                                       • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                       • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                       • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                       • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                       • Enrich Your Future 07: The Value of Security Analysis
                                       • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                       • Enrich Your Future 09: The Fed Model and the Money Illusion
                                       
                                       

                                       Part II: Strategic Portfolio Decisions

                                       • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                       • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                                       • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                                       • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                                       • Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
                                       • Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
                                       • Enrich Your Future 16: The Estimated Return Is Not Inevitable
                                       • Enrich Your Future 17: Take a Portfolio Approach to Your Investments
                                       • Enrich Your Future 18: Build a Portfolio That Can Withstand the Black Swans
                                       • Enrich Your Future 19: The Gold Illusion: Why Investing in Gold May Not Be Safe
                                       • Enrich Your Future 20: Passive Investing Is the Key to Prudent Wealth Management
                                       
                                       

                                       Part III: Behavioral Finance: We Have Met the Enemy and He Is Us

                                       • Enrich Your Future 21: Think You Can Beat the Market? Think Again
                                       • Enrich Your Future 22: Some Risks Are Not Worth Taking
                                       • Enrich Your Future 23: Seeing Through the Frame: Making Better Investment Decisions
                                       • Enrich Your Future 24: Why Smart People Do Dumb Things
                                       • Enrich Your Future 25: Stock Crashes Happen—Be Prepared
                                       • Enrich Your Future 26: Should You Invest Now or Spread It Out?
                                       • Enrich Your Future 27: Pascal’s Wager: Betting on Consequences Over Probabilities
                                       • Enrich Your Future 28 & 29: How to Outsmart Your Investing Biases
                                       • Enrich Your Future 30: The Hidden Cost of Chasing Dividend Stocks
                                       • Enrich Your Future 31: Risk vs. Uncertainty: The Investor’s Blind Spot
                                       
                                       

                                       Part IV: Playing the Winner’s Game in Life and Investing

                                       • Enrich Your Future 32: Trying to Beat the Market Is a Fool’s Errand
                                       
                                       

                                       About Larry Swedroe

                                       Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                       Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                       Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                       Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                        

                                       [spp-transcript]

                                        

                                       Connect with Larry Swedroe

                                       • LinkedIn
                                       • X
                                       • Website
                                       • Books
                                       
                                       

                                       Andrew’s books

                                       • How to Start Building Your Wealth Investing in the Stock Market
                                       • My Worst Investment Ever
                                       • 9 Valuation Mistakes and How to Avoid Them
                                       • Transform Your Business with Dr.Deming’s 14 Points
                                       
                                       

                                       Andrew’s online programs

                                       • Valuation Master Class
                                       • The Become a Better Investor Community
                                       • How to Start Building Your Wealth Investing in the Stock Market
                                       • Finance Made Ridiculously Simple
                                       • FVMR Investing: Quantamental Investing Across the World
                                       • Become a Great Presenter and Increase Your Influence
                                       • Transform Your Business with Dr. Deming’s 14 Points
                                       • Achieve Your Goals
                                       
                                       

                                       Connect with Andrew Stotz:

                                       • astotz.com
                                       • LinkedIn
                                       • Facebook
                                       • Instagram
                                       • Threads
                                       • X
                                       • YouTube
                                       • My Worst Investment Ever Podcast
                                       
                                       ]]>174313e9-c0d5-4994-bdb3-c82ca52e2792Tue, 27 May 2025 06:00:00 +070016:20falsefullCash Is Tight, but You Can Still Turn Things AroundA retailer in Bangkok was staring down a cash crunch after COVID. He was ready to sign for a loan, convinced it was his only option.

                                       Instead, we dug into his numbers and found $30,000 in unsold inventory gathering dust and $8,000 in overpayments to suppliers. That cash was enough to stabilize his business; no debt was needed. The money was there; he just couldn’t see it.

                                       Download The Profit Gap for free at TheProfitBootCamp.com to see 5 hidden reasons family businesses work hard but still fall short of profit.

                                       Find hidden profit before you borrow

                                       When cash flow gets tight, panic sets in. Your mind races, layoffs, loans, maybe even shutting down. But fear isn’t a strategy. The truth is, your business is probably sitting on hidden profit, even in tough times. You just need to find it.

                                       Start with a zero-based budget. That means you begin each budget line at zero, not last year’s number, and build it up based on what’s actually needed. Each team member justifies every expense from scratch. No assumptions. No carryovers. Just what drives results. Look at your expenses, inventory, and contracts. What’s wasting money?

                                       Maybe it’s unused subscriptions, overstocked supplies, or a vendor charging too much. One client found $500 a month in duplicate software licenses. Canceling them took one email and saved $6,000 a year.

                                       Cut smart, not deep

                                       Don’t just cut costs mindlessly; focus on waste, not muscle. Keep what drives value, like your best staff or marketing, that works. I’ve seen owners slash their top salespeople in a panic, only to tank revenue. Instead, realign spending to what moves profit.

                                       For example, shift the budget from low-margin products to high-margin ones. One business I worked with dropped a product line that was barely breaking even. That freed up $20,000 for ads, bringing in $100,000 in new sales.

                                       Small wins create momentum. Even saving $1,000 can shift your mindset from panic to possibility. Try this: call your top five vendors this week. Ask for a 10% discount or better payment terms. Most will say no, but some will say yes to keep your business.

                                       A client of mine negotiated $5,000 off his annual shipping costs in one 15-minute call. That’s cash you can use to grow, not just survive.

                                       Discipline is your secret weapon

                                       Discipline beats loans every time. Borrowing might feel like a lifeline, but it’s a weight around your neck if you don’t fix the root problems. A logistics firm I worked with was desperate for a loan. Instead, we audited their spending and found $8,600 in waste, unused equipment leases, and overpaid utilities. That cash funded a marketing push that brought in new clients without debt. They weren’t out of options; they just needed clarity.

                                       Here’s one last story. That same logistics firm thought they were done. But that $8,600 audit changed everything. They used the savings to relaunch ads, landing three new contracts monthly. The owner told me, “I thought we were stuck. Turns out, we just needed to look closer.” What’s hiding in your business?

                                       You’ve now faced the five hard truths holding your business back. You know no one’s coming to save you, that delay kills profit, that family dynamics can trap you, that leadership drives results, and that you have options even in a cash crunch. Now, it’s time to act. Pick one step this week, cut an expense, fix a meeting, check your P&L, and do it. Your business depends on you.

                                       Actions from prior episodes

                                       • Cut one cost: Block 30 minutes, review P&L, and cut one expense. Just one. Lead by example.
                                       • Find one drain: Review finances weekly, searching for one hidden loss. Act now.
                                       • Align the family: Hold a monthly, one-hour family meeting. Ask: “What will drive next month’s profit?” Prioritize profit over family tension.
                                       • Lead the team: Run focused weekly meetings with a clear agenda and one action item. Drive results.
                                       
                                       

                                       The next action

                                       • Zero-based budgeting: Justify all expenses to free cash for growth.
                                       
                                       

                                       Download The Profit Gap for free at TheProfitBootCamp.com to see 5 hidden reasons family businesses work hard but still fall short of profit.

                                        

                                       Andrew’s books

                                       • How to Start Building Your Wealth Investing in the Stock Market
                                       • My Worst Investment Ever
                                       • 9 Valuation Mistakes and How to Avoid Them
                                       • Transform Your Business with Dr.Deming’s 14 Points
                                       
                                       

                                       Andrew’s online programs

                                       • Valuation Master Class
                                       • The Become a Better Investor Community
                                       • How to Start Building Your Wealth Investing in the Stock Market
                                       • Finance Made Ridiculously Simple
                                       • FVMR Investing: Quantamental Investing Across the World
                                       • Become a Great Presenter and Increase Your Influence
                                       • Transform Your Business with Dr. Deming’s 14 Points
                                       • Achieve Your Goals
                                       
                                       

                                       Connect with Andrew Stotz:

                                       • astotz.com
                                       • LinkedIn
                                       • Facebook
                                       • Instagram
                                       • Threads
                                       • X
                                       • YouTube
                                       • My Worst Investment Ever Podcast
                                       
                                       ]]>A retailer in Bangkok was staring down a cash crunch after COVID. He was ready to sign for a loan, convinced it was his only option.

                                       Instead, we dug into his numbers and found $30,000 in unsold inventory gathering dust and $8,000 in overpayments to suppliers. That cash was enough to stabilize his business; no debt was needed. The money was there; he just couldn’t see it.

                                       Download The Profit Gap for free at TheProfitBootCamp.com to see 5 hidden reasons family businesses work hard but still fall short of profit.

                                       Find hidden profit before you borrow

                                       When cash flow gets tight, panic sets in. Your mind races, layoffs, loans, maybe even shutting down. But fear isn’t a strategy. The truth is, your business is probably sitting on hidden profit, even in tough times. You just need to find it.

                                       Start with a zero-based budget. That means you begin each budget line at zero, not last year’s number, and build it up based on what’s actually needed. Each team member justifies every expense from scratch. No assumptions. No carryovers. Just what drives results. Look at your expenses, inventory, and contracts. What’s wasting money?

                                       Maybe it’s unused subscriptions, overstocked supplies, or a vendor charging too much. One client found $500 a month in duplicate software licenses. Canceling them took one email and saved $6,000 a year.

                                       Cut smart, not deep

                                       Don’t just cut costs mindlessly; focus on waste, not muscle. Keep what drives value, like your best staff or marketing, that works. I’ve seen owners slash their top salespeople in a panic, only to tank revenue. Instead, realign spending to what moves profit.

                                       For example, shift the budget from low-margin products to high-margin ones. One business I worked with dropped a product line that was barely breaking even. That freed up $20,000 for ads, bringing in $100,000 in new sales.

                                       Small wins create momentum. Even saving $1,000 can shift your mindset from panic to possibility. Try this: call your top five vendors this week. Ask for a 10% discount or better payment terms. Most will say no, but some will say yes to keep your business.

                                       A client of mine negotiated $5,000 off his annual shipping costs in one 15-minute call. That’s cash you can use to grow, not just survive.

                                       Discipline is your secret weapon

                                       Discipline beats loans every time. Borrowing might feel like a lifeline, but it’s a weight around your neck if you don’t fix the root problems. A logistics firm I worked with was desperate for a loan. Instead, we audited their spending and found $8,600 in waste, unused equipment leases, and overpaid utilities. That cash funded a marketing push that brought in new clients without debt. They weren’t out of options; they just needed clarity.

                                       Here’s one last story. That same logistics firm thought they were done. But that $8,600 audit changed everything. They used the savings to relaunch ads, landing three new contracts monthly. The owner told me, “I thought we were stuck. Turns out, we just needed to look closer.” What’s hiding in your business?

                                       You’ve now faced the five hard truths holding your business back. You know no one’s coming to save you, that delay kills profit, that family dynamics can trap you, that leadership drives results, and that you have options even in a cash crunch. Now, it’s time to act. Pick one step this week, cut an expense, fix a meeting, check your P&L, and do it. Your business depends on you.

                                       Actions from prior episodes

                                       • Cut one cost: Block 30 minutes, review P&L, and cut one expense. Just one. Lead by example.
                                       • Find one drain: Review finances weekly, searching for one hidden loss. Act now.
                                       • Align the family: Hold a monthly, one-hour family meeting. Ask: “What will drive next month’s profit?” Prioritize profit over family tension.
                                       • Lead the team: Run focused weekly meetings with a clear agenda and one action item. Drive results.
                                       
                                       

                                       The next action

                                       • Zero-based budgeting: Justify all expenses to free cash for growth.
                                       
                                       

                                       Download The Profit Gap for free at TheProfitBootCamp.com to see 5 hidden reasons family businesses work hard but still fall short of profit.

                                        

                                       Andrew’s books

                                       • How to Start Building Your Wealth Investing in the Stock Market
                                       • My Worst Investment Ever
                                       • 9 Valuation Mistakes and How to Avoid Them
                                       • Transform Your Business with Dr.Deming’s 14 Points
                                       
                                       

                                       Andrew’s online programs

                                       • Valuation Master Class
                                       • The Become a Better Investor Community
                                       • How to Start Building Your Wealth Investing in the Stock Market
                                       • Finance Made Ridiculously Simple
                                       • FVMR Investing: Quantamental Investing Across the World
                                       • Become a Great Presenter and Increase Your Influence
                                       • Transform Your Business with Dr. Deming’s 14 Points
                                       • Achieve Your Goals
                                       
                                       

                                       Connect with Andrew Stotz:

                                       • astotz.com
                                       • LinkedIn
                                       • Facebook
                                       • Instagram
                                       • Threads
                                       • X
                                       • YouTube
                                       • My Worst Investment Ever Podcast
                                       
                                       ]]>f2c0ba1b-8f2e-44cd-bf20-cbe34a7d7134Thu, 22 May 2025 06:00:00 +070005:26falsefullOeystein Kalleklev – Shipping’s Brutal Truth: Adapt or DieBIO: Oeystein Kalleklev is the outgoing CEO of Flex LNG and Avance Gas. He has prior experience as CFO of Knutsen NYK Offshore Tankers and Umoe Group and Chairman General Partner of MLP KNOT Offshore Partners.

                                       STORY: Oeystein has been part of some terrible investments made by his employers. One invested $150 million to become the biggest shareholder of a mine in Guinea, which was lost due to a bad regime. During the great financial crisis, another invested $300 million into a bioethanol plant in Brazil.

                                       LEARNING: In a dynamic industry like shipping, you must think more about adapting and being tactical rather than strategic.

                                        

                                       “You have to be really disciplined when you are in a cyclical industry. Observe where the market is going, and learn how to adapt.”

                                       Oeystein Kalleklev

                                        

                                       Guest profile

                                       Oeystein Kalleklev is the outgoing CEO of Flex LNG (NYSE/OSE: FLNG) and Avance Gas (OSE: AGAS). He has prior experience as CFO of Knutsen NYK Offshore Tankers and Umoe Group, as well as Chairman General Partner of MLP KNOT Offshore Partners (NYSE: KNOP).

                                       Worst investment ever

                                       Oeystein has been part of some terrible investments. In one case, a family Oeystein worked for had invested about $150 million to become the biggest shareholder of a mine in Guinea. The country was under an unstable regime, and the leader was assassinated. There were also so many operational hiccups operationally. That $150 million turned out to be like $3 million when they sold their last share.

                                       He has also been involved in bioethanol production in Brazil, where a company he worked for invested about $300 million into a bioethanol plant in Brazil during the great financial crisis. The bosses had to restructure the whole company, and Oeystein had to go to the US to talk to bondholders, trying to get them to choose whether to become shareholders or take a big hit on the bond loans.

                                       In another case, Oeystein was involved in a nickel mine in the Philippines where the company he was working for was building a floating production ship for oil. The budget was $280 million, but the company spent $500 million on that building project, and it also took one and a half extra years to complete.

                                       Lessons learned

                                       • When you have such a dynamic industry as shipping, you must think more about adapting and being tactical rather than strategic.
                                       • Focus on running your ships efficiently—it’s a critical success factor.
                                       • Shipping is a lot about market timing. Read the market, know where it is going, when you should exit, and when you should invest.
                                       • You have to be knowledgeable about technology because technology changes quite often in shipping.
                                       • Be smart about running a shipping company. Do it lean and follow the technology.
                                       
                                       

                                       Andrew’s takeaways

                                       • It’s hard to set a long-term strategy in an industry such as shipping because you’ve got to adapt to what’s happening in the market.
                                       • You have to run ships efficiently, or else you will miss the core aspect of your business.
                                       
                                       

                                       Actionable advice

                                       If you want to venture into the shipping industry, you must properly understand shipping because it’s not as straightforward as people think. It’s not just about moving goods from A to B.

                                       No.1 goal for the next 12 months

                                       Oeystein’s number one goal for the next 12 months is to read more books to be on top of contemporary issues and be a successful shipping investor.

                                       Parting words

                                        

                                       “Thank you for inviting me. I will be listening to a few more episodes.”

                                       Oeystein Kalleklev

                                        

                                       [spp-transcript]

                                        

                                       Connect with Oeystein Kalleklev

                                       • LinkedIn
                                       • X
                                       
                                       

                                       Andrew’s books

                                       • How to Start Building Your Wealth Investing in the Stock Market
                                       • My Worst Investment Ever
                                       • 9 Valuation Mistakes and How to Avoid Them
                                       • Transform Your Business with Dr.Deming’s 14 Points
                                       
                                       

                                       Andrew’s online programs

                                       • Valuation Master Class
                                       • The Become a Better Investor Community
                                       • How to Start Building Your Wealth Investing in the Stock Market
                                       • Finance Made Ridiculously Simple
                                       • FVMR Investing: Quantamental Investing Across the World
                                       • Become a Great Presenter and Increase Your Influence
                                       • Transform Your Business with Dr. Deming’s 14 Points
                                       • Achieve Your Goals
                                       
                                       

                                       Connect with Andrew Stotz:

                                       • astotz.com
                                       • LinkedIn
                                       • Facebook
                                       • Instagram
                                       • Threads
                                       • X
                                       • YouTube
                                       • My Worst Investment Ever Podcast
                                       
                                       ]]>BIO: Oeystein Kalleklev is the outgoing CEO of Flex LNG and Avance Gas. He has prior experience as CFO of Knutsen NYK Offshore Tankers and Umoe Group and Chairman General Partner of MLP KNOT Offshore Partners.

                                       STORY: Oeystein has been part of some terrible investments made by his employers. One invested $150 million to become the biggest shareholder of a mine in Guinea, which was lost due to a bad regime. During the great financial crisis, another invested $300 million into a bioethanol plant in Brazil.

                                       LEARNING: In a dynamic industry like shipping, you must think more about adapting and being tactical rather than strategic.

                                        

                                       “You have to be really disciplined when you are in a cyclical industry. Observe where the market is going, and learn how to adapt.”

                                       Oeystein Kalleklev

                                        

                                       Guest profile

                                       Oeystein Kalleklev is the outgoing CEO of Flex LNG (NYSE/OSE: FLNG) and Avance Gas (OSE: AGAS). He has prior experience as CFO of Knutsen NYK Offshore Tankers and Umoe Group, as well as Chairman General Partner of MLP KNOT Offshore Partners (NYSE: KNOP).

                                       Worst investment ever

                                       Oeystein has been part of some terrible investments. In one case, a family Oeystein worked for had invested about $150 million to become the biggest shareholder of a mine in Guinea. The country was under an unstable regime, and the leader was assassinated. There were also so many operational hiccups operationally. That $150 million turned out to be like $3 million when they sold their last share.

                                       He has also been involved in bioethanol production in Brazil, where a company he worked for invested about $300 million into a bioethanol plant in Brazil during the great financial crisis. The bosses had to restructure the whole company, and Oeystein had to go to the US to talk to bondholders, trying to get them to choose whether to become shareholders or take a big hit on the bond loans.

                                       In another case, Oeystein was involved in a nickel mine in the Philippines where the company he was working for was building a floating production ship for oil. The budget was $280 million, but the company spent $500 million on that building project, and it also took one and a half extra years to complete.

                                       Lessons learned

                                       • When you have such a dynamic industry as shipping, you must think more about adapting and being tactical rather than strategic.
                                       • Focus on running your ships efficiently—it’s a critical success factor.
                                       • Shipping is a lot about market timing. Read the market, know where it is going, when you should exit, and when you should invest.
                                       • You have to be knowledgeable about technology because technology changes quite often in shipping.
                                       • Be smart about running a shipping company. Do it lean and follow the technology.
                                       
                                       

                                       Andrew’s takeaways

                                       • It’s hard to set a long-term strategy in an industry such as shipping because you’ve got to adapt to what’s happening in the market.
                                       • You have to run ships efficiently, or else you will miss the core aspect of your business.
                                       
                                       

                                       Actionable advice

                                       If you want to venture into the shipping industry, you must properly understand shipping because it’s not as straightforward as people think. It’s not just about moving goods from A to B.

                                       No.1 goal for the next 12 months

                                       Oeystein’s number one goal for the next 12 months is to read more books to be on top of contemporary issues and be a successful shipping investor.

                                       Parting words

                                        

                                       “Thank you for inviting me. I will be listening to a few more episodes.”

                                       Oeystein Kalleklev

                                        

                                       [spp-transcript]

                                        

                                       Connect with Oeystein Kalleklev

                                       • LinkedIn
                                       • X
                                       
                                       

                                       Andrew’s books

                                       • How to Start Building Your Wealth Investing in the Stock Market
                                       • My Worst Investment Ever
                                       • 9 Valuation Mistakes and How to Avoid Them
                                       • Transform Your Business with Dr.Deming’s 14 Points
                                       
                                       

                                       Andrew’s online programs

                                       • Valuation Master Class
                                       • The Become a Better Investor Community
                                       • How to Start Building Your Wealth Investing in the Stock Market
                                       • Finance Made Ridiculously Simple
                                       • FVMR Investing: Quantamental Investing Across the World
                                       • Become a Great Presenter and Increase Your Influence
                                       • Transform Your Business with Dr. Deming’s 14 Points
                                       • Achieve Your Goals
                                       
                                       

                                       Connect with Andrew Stotz:

                                       • astotz.com
                                       • LinkedIn
                                       • Facebook
                                       • Instagram
                                       • Threads
                                       • X
                                       • YouTube
                                       • My Worst Investment Ever Podcast
                                       
                                       ]]>3c136cbf-b037-448e-ac80-8410dcb94800Tue, 20 May 2025 06:00:00 +070039:24falsefullYour Profit Problems Are Leadership ProblemsI once sat down with a furious business owner. “My team’s useless,” he said. “They never deliver.” I asked him two simple questions: “Who hired them? Who sets their goals?”

                                       He went quiet. He admitted he hadn’t run a proper meeting in months, and his priorities changed weekly. His team wasn’t failing; they were confused.

                                       Once he got clear and consistent, everything shifted. Execution improved, morale spiked, and profit followed. The problem wasn’t his team; it was his leadership.

                                       Download The Profit Gap for free at TheProfitBootCamp.com to see 5 hidden reasons family businesses work hard but still fall short of profit.

                                       It starts with you

                                       When the same issues keep popping up: missed deadlines, low margins, and sloppy execution, it’s easy to blame your team or the market. But nine times out of ten, those problems point to your systems, not your people. If your business feels stuck in a loop, you haven’t built the structure to break free. Leadership isn’t about charisma or barking orders. It’s about clarity and follow-through.

                                       Start by auditing yourself. Are your priorities clear to your team? Do you track progress, or just hope things get done?

                                       I’ve seen owners delegate tasks and then forget about them, leaving their teams guessing. That’s not leadership. That’s abdication. One client delegated a pricing review but never checked in. Six months later, nothing had changed, and they’d lost $50,000 in potential profit. Set clear goals, assign owners, and follow up. It’s not sexy, but it works.

                                       Fix your meetings, fix your profit

                                       Here’s a game-changer: fix your meetings. Most business meetings are a mess, with endless venting or no focus. Better meetings lead to better profit. Try this: run one weekly meeting with a tight agenda. Pick one metric, like cash flow, gross margin, or overdue invoices, and identify three actions to move them.

                                       One client’s meetings were just complaint sessions. We set a new rule: every meeting ends with three clear next steps. Four weeks later, the execution was sharper, and he told me, “We didn’t need more staff, just a real plan.” Focused action works.

                                       Build momentum with better habits

                                       You don’t need a new team, just better habits. Your people are probably capable, but they need direction. A weekly rhythm, like Monday priorities, Wednesday short check-ins, and Friday results, builds momentum fast. It’s not about working harder; it’s about working smarter. And start writing down what works. That’s your playbook for scaling.

                                       One owner I know documented his best sales process. It took an hour, but it cut training time for new hires and boosted close rates by 10%. That’s leadership in action.

                                       You’re leading with clarity now, but what if cash is still tight? In our final episode, we’ll tackle how to turn things around when money’s low and pressure’s high. Don’t miss it.

                                       Actions from prior episodes

                                       • Cut one cost: Block 30 minutes, review P&L, and cut one expense. Just one. Lead by example.
                                       • Find one drain: Review finances weekly, searching for one hidden loss. Act now.
                                       • Align the family: Hold a monthly, one-hour family meeting. Ask: “What will drive next month’s profit?” Prioritize profit over family tension.
                                       
                                       

                                       The next action

                                       • Lead the team: Run focused weekly meetings with a clear agenda and one action item. Drive results.
                                       
                                       

                                       Download The Profit Gap for free at TheProfitBootCamp.com to see 5 hidden reasons family businesses work hard but still fall short of profit.

                                        

                                       Andrew’s books

                                       • How to Start Building Your Wealth Investing in the Stock Market
                                       • My Worst Investment Ever
                                       • 9 Valuation Mistakes and How to Avoid Them
                                       • Transform Your Business with Dr.Deming’s 14 Points
                                       
                                       

                                       Andrew’s online programs

                                       • Valuation Master Class
                                       • The Become a Better Investor Community
                                       • How to Start Building Your Wealth Investing in the Stock Market
                                       • Finance Made Ridiculously Simple
                                       • FVMR Investing: Quantamental Investing Across the World
                                       • Become a Great Presenter and Increase Your Influence
                                       • Transform Your Business with Dr. Deming’s 14 Points
                                       • Achieve Your Goals
                                       
                                       

                                       Connect with Andrew Stotz:

                                       • astotz.com
                                       • LinkedIn
                                       • Facebook
                                       • Instagram
                                       • Threads
                                       • X
                                       • YouTube
                                       • My Worst Investment Ever Podcast
                                       
                                       ]]>I once sat down with a furious business owner. “My team’s useless,” he said. “They never deliver.” I asked him two simple questions: “Who hired them? Who sets their goals?”

                                       He went quiet. He admitted he hadn’t run a proper meeting in months, and his priorities changed weekly. His team wasn’t failing; they were confused.

                                       Once he got clear and consistent, everything shifted. Execution improved, morale spiked, and profit followed. The problem wasn’t his team; it was his leadership.

                                       Download The Profit Gap for free at TheProfitBootCamp.com to see 5 hidden reasons family businesses work hard but still fall short of profit.

                                       It starts with you

                                       When the same issues keep popping up: missed deadlines, low margins, and sloppy execution, it’s easy to blame your team or the market. But nine times out of ten, those problems point to your systems, not your people. If your business feels stuck in a loop, you haven’t built the structure to break free. Leadership isn’t about charisma or barking orders. It’s about clarity and follow-through.

                                       Start by auditing yourself. Are your priorities clear to your team? Do you track progress, or just hope things get done?

                                       I’ve seen owners delegate tasks and then forget about them, leaving their teams guessing. That’s not leadership. That’s abdication. One client delegated a pricing review but never checked in. Six months later, nothing had changed, and they’d lost $50,000 in potential profit. Set clear goals, assign owners, and follow up. It’s not sexy, but it works.

                                       Fix your meetings, fix your profit

                                       Here’s a game-changer: fix your meetings. Most business meetings are a mess, with endless venting or no focus. Better meetings lead to better profit. Try this: run one weekly meeting with a tight agenda. Pick one metric, like cash flow, gross margin, or overdue invoices, and identify three actions to move them.

                                       One client’s meetings were just complaint sessions. We set a new rule: every meeting ends with three clear next steps. Four weeks later, the execution was sharper, and he told me, “We didn’t need more staff, just a real plan.” Focused action works.

                                       Build momentum with better habits

                                       You don’t need a new team, just better habits. Your people are probably capable, but they need direction. A weekly rhythm, like Monday priorities, Wednesday short check-ins, and Friday results, builds momentum fast. It’s not about working harder; it’s about working smarter. And start writing down what works. That’s your playbook for scaling.

                                       One owner I know documented his best sales process. It took an hour, but it cut training time for new hires and boosted close rates by 10%. That’s leadership in action.

                                       You’re leading with clarity now, but what if cash is still tight? In our final episode, we’ll tackle how to turn things around when money’s low and pressure’s high. Don’t miss it.

                                       Actions from prior episodes

                                       • Cut one cost: Block 30 minutes, review P&L, and cut one expense. Just one. Lead by example.
                                       • Find one drain: Review finances weekly, searching for one hidden loss. Act now.
                                       • Align the family: Hold a monthly, one-hour family meeting. Ask: “What will drive next month’s profit?” Prioritize profit over family tension.
                                       
                                       

                                       The next action

                                       • Lead the team: Run focused weekly meetings with a clear agenda and one action item. Drive results.
                                       
                                       

                                       Download The Profit Gap for free at TheProfitBootCamp.com to see 5 hidden reasons family businesses work hard but still fall short of profit.

                                        

                                       Andrew’s books

                                       • How to Start Building Your Wealth Investing in the Stock Market
                                       • My Worst Investment Ever
                                       • 9 Valuation Mistakes and How to Avoid Them
                                       • Transform Your Business with Dr.Deming’s 14 Points
                                       
                                       

                                       Andrew’s online programs

                                       • Valuation Master Class
                                       • The Become a Better Investor Community
                                       • How to Start Building Your Wealth Investing in the Stock Market
                                       • Finance Made Ridiculously Simple
                                       • FVMR Investing: Quantamental Investing Across the World
                                       • Become a Great Presenter and Increase Your Influence
                                       • Transform Your Business with Dr. Deming’s 14 Points
                                       • Achieve Your Goals
                                       
                                       

                                       Connect with Andrew Stotz:

                                       • astotz.com
                                       • LinkedIn
                                       • Facebook
                                       • Instagram
                                       • Threads
                                       • X
                                       • YouTube
                                       • My Worst Investment Ever Podcast
                                       
                                       ]]>c753814a-37a9-40b1-9feb-a6c8fc16d9c7Thu, 15 May 2025 06:00:00 +070004:30falsefullEnrich Your Future 32: Trying to Beat the Market Is a Fool’s ErrandIn this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 32: The Twenty-Dollar Bill.

                                       LEARNING: Trade as if the markets are efficient, even though they are not.

                                        

                                       “If the markets were perfectly efficient, then no one would discover anything about a mispriced stock. There would be no abnormal behaviors or biases, such as investors preferring to buy lottery stocks; therefore, there would be no incentive for investors to conduct any research. This would make the market inefficient.”

                                       Larry Swedroe

                                        

                                       In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                       Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 32: The Twenty-Dollar Bill.

                                       Chapter 32: The Uncertainty of Investing

                                       In this chapter, Larry explains the efficient markets hypothesis (EMH) and why successful trading strategies often self-destruct due to their inherent limitations.

                                       According to Larry, one of the fundamental tenets of the EMH is that in a competitive financial environment, successful trading strategies self-destruct because they are self-limiting—when they are discovered, they are eliminated by exploiting the strategy.

                                       He shares the example of Andrew Lo’s adaptive markets hypothesis, which acknowledges that while the EMH may not necessarily hold in the short term, it does predict that inefficiencies will self-correct over time as arbitrageurs exploit them after publication. This understanding leads us to the inevitable conclusion that financial markets trend toward efficiency in the long run.

                                       Efficient markets rapidly eliminate opportunities for abnormal profits

                                       To demonstrate how the efficiency of markets rapidly eliminates opportunities for abnormal profits, Larry shares the following example:

                                       Imagine that an investor discovers that small-cap stocks have historically outperformed the market in January. To take advantage of this anomaly, that investor would have to buy small-cap stocks at the end of December, before the period of outperformance. After achieving some success with this strategy, other investors would take note—with the large dollars at stake, Wall Street is quick to copy successful strategies. An academic paper might even be published. Since the effect is now known to more than just the original discoverer of the anomaly, one would have to buy before others do to generate abnormal profits. Now, prices start to rise in November. But the next group of investors, recognizing this was going to happen, would have to buy even earlier.

                                       As you can see, the very act of exploiting an anomaly has the effect of making it disappear, making the market more efficient. This underscores the significant role investors play in shaping market efficiency.

                                       Behave as if equity markets are perfectly efficient

                                       Larry surmises that while equity markets may not be perfectly efficient, the winning investment strategy is to behave as if they were. This reaffirms the importance of the EMH in guiding investment strategy, providing investors with a sound approach to market participation.

                                       In conclusion, Larry advises investors to consider carefully these words from Richard Roll, financial economist and principal of the portfolio management firm Roll and Ross Asset Management:

                                        

                                       “I have personally tried to invest money, my clients’ and my own, in every single anomaly and predictive result that academics have dreamed up. And I have yet to make a nickel on any of these supposed market inefficiencies. An inefficiency ought to be an exploitable opportunity. If there is nothing investors can systematically exploit, time and time again, then it’s tough to say that information is not being properly incorporated into stock prices. Real money investment strategies don’t produce the results that academic papers say they should.”

                                        

                                       Further reading

                                       1. Andrew Lo, “The Adoptive Markets Hypothesis,” The Journal of Portfolio Management (30th Anniversary Edition, 2004).
                                       2. Dwight Lee and James Verbrugge, “The Efficient Market Theory Thrives on Criticism,” Journal of Applied Corporate Finance (Spring 1996).
                                       3. Burton G. Malkiel, “Are Markets Efficient? Yes, Even If They Make Errors,” Wall Street Journal, December 28, 2000.
                                       
                                       

                                       Did you miss out on the previous chapters? Check them out:

                                       Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                                       • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                       • Enrich Your Future 02: How Markets Set Prices
                                       • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                       • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                       • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                       • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                       • Enrich Your Future 07: The Value of Security Analysis
                                       • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                       • Enrich Your Future 09: The Fed Model and the Money Illusion
                                       
                                       

                                       Part II: Strategic Portfolio Decisions

                                       • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                       • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                                       • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                                       • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                                       • Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
                                       • Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
                                       • In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 32: The Twenty-Dollar Bill.

                                         LEARNING: Trade as if the markets are efficient, even though they are not.

                                          

                                         “If the markets were perfectly efficient, then no one would discover anything about a mispriced stock. There would be no abnormal behaviors or biases, such as investors preferring to buy lottery stocks; therefore, there would be no incentive for investors to conduct any research. This would make the market inefficient.”

                                         Larry Swedroe

                                          

                                         In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                         Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 32: The Twenty-Dollar Bill.

                                         Chapter 32: The Uncertainty of Investing

                                         In this chapter, Larry explains the efficient markets hypothesis (EMH) and why successful trading strategies often self-destruct due to their inherent limitations.

                                         According to Larry, one of the fundamental tenets of the EMH is that in a competitive financial environment, successful trading strategies self-destruct because they are self-limiting—when they are discovered, they are eliminated by exploiting the strategy.

                                         He shares the example of Andrew Lo’s adaptive markets hypothesis, which acknowledges that while the EMH may not necessarily hold in the short term, it does predict that inefficiencies will self-correct over time as arbitrageurs exploit them after publication. This understanding leads us to the inevitable conclusion that financial markets trend toward efficiency in the long run.

                                         Efficient markets rapidly eliminate opportunities for abnormal profits

                                         To demonstrate how the efficiency of markets rapidly eliminates opportunities for abnormal profits, Larry shares the following example:

                                         Imagine that an investor discovers that small-cap stocks have historically outperformed the market in January. To take advantage of this anomaly, that investor would have to buy small-cap stocks at the end of December, before the period of outperformance. After achieving some success with this strategy, other investors would take note—with the large dollars at stake, Wall Street is quick to copy successful strategies. An academic paper might even be published. Since the effect is now known to more than just the original discoverer of the anomaly, one would have to buy before others do to generate abnormal profits. Now, prices start to rise in November. But the next group of investors, recognizing this was going to happen, would have to buy even earlier.

                                         As you can see, the very act of exploiting an anomaly has the effect of making it disappear, making the market more efficient. This underscores the significant role investors play in shaping market efficiency.

                                         Behave as if equity markets are perfectly efficient

                                         Larry surmises that while equity markets may not be perfectly efficient, the winning investment strategy is to behave as if they were. This reaffirms the importance of the EMH in guiding investment strategy, providing investors with a sound approach to market participation.

                                         In conclusion, Larry advises investors to consider carefully these words from Richard Roll, financial economist and principal of the portfolio management firm Roll and Ross Asset Management:

                                          

                                         “I have personally tried to invest money, my clients’ and my own, in every single anomaly and predictive result that academics have dreamed up. And I have yet to make a nickel on any of these supposed market inefficiencies. An inefficiency ought to be an exploitable opportunity. If there is nothing investors can systematically exploit, time and time again, then it’s tough to say that information is not being properly incorporated into stock prices. Real money investment strategies don’t produce the results that academic papers say they should.”

                                          

                                         Further reading

                                         1. Andrew Lo, “The Adoptive Markets Hypothesis,” The Journal of Portfolio Management (30th Anniversary Edition, 2004).
                                         2. Dwight Lee and James Verbrugge, “The Efficient Market Theory Thrives on Criticism,” Journal of Applied Corporate Finance (Spring 1996).
                                         3. Burton G. Malkiel, “Are Markets Efficient? Yes, Even If They Make Errors,” Wall Street Journal, December 28, 2000.
                                         
                                         

                                         Did you miss out on the previous chapters? Check them out:

                                         Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                                         • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                         • Enrich Your Future 02: How Markets Set Prices
                                         • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                         • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                         • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                         • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                         • Enrich Your Future 07: The Value of Security Analysis
                                         • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                         • Enrich Your Future 09: The Fed Model and the Money Illusion
                                         
                                         

                                         Part II: Strategic Portfolio Decisions

                                         • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                         • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                                         • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                                         • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                                         • Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
                                         • Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
                                         • Enrich Your Future 16: The Estimated Return Is Not Inevitable
                                         • Enrich Your Future 17: Take a Portfolio Approach to Your Investments
                                         • Enrich Your Future 18: Build a Portfolio That Can Withstand the Black Swans
                                         • Enrich Your Future 19: The Gold Illusion: Why Investing in Gold May Not Be Safe
                                         • Enrich Your Future 20: Passive Investing Is the Key to Prudent Wealth Management
                                         
                                         

                                         Part III: Behavioral Finance: We Have Met the Enemy and He Is Us

                                         • Enrich Your Future 21: Think You Can Beat the Market? Think Again
                                         • Enrich Your Future 22: Some Risks Are Not Worth Taking
                                         • Enrich Your Future 23: Seeing Through the Frame: Making Better Investment Decisions
                                         • Enrich Your Future 24: Why Smart People Do Dumb Things
                                         • Enrich Your Future 25: Stock Crashes Happen—Be Prepared
                                         • Enrich Your Future 26: Should You Invest Now or Spread It Out?
                                         • Enrich Your Future 27: Pascal’s Wager: Betting on Consequences Over Probabilities
                                         • Enrich Your Future 28 & 29: How to Outsmart Your Investing Biases
                                         • Enrich Your Future 30: The Hidden Cost of Chasing Dividend Stocks
                                         • Enrich Your Future 31: Risk vs. Uncertainty: The Investor’s Blind Spot
                                         
                                         

                                         About Larry Swedroe

                                         Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                         Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                         Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                         Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                          

                                         [spp-transcript]

                                          

                                         Connect with Larry Swedroe

                                         • LinkedIn
                                         • X
                                         • Website
                                         • Books
                                         
                                         

                                         Andrew’s books

                                         • How to Start Building Your Wealth Investing in the Stock Market
                                         • My Worst Investment Ever
                                         • 9 Valuation Mistakes and How to Avoid Them
                                         • Transform Your Business with Dr.Deming’s 14 Points
                                         
                                         

                                         Andrew’s online programs

                                         • Valuation Master Class
                                         • The Become a Better Investor Community
                                         • How to Start Building Your Wealth Investing in the Stock Market
                                         • Finance Made Ridiculously Simple
                                         • FVMR Investing: Quantamental Investing Across the World
                                         • Become a Great Presenter and Increase Your Influence
                                         • Transform Your Business with Dr. Deming’s 14 Points
                                         • Achieve Your Goals
                                         
                                         

                                         Connect with Andrew Stotz:

                                         • astotz.com
                                         • LinkedIn
                                         • Facebook
                                         • Instagram
                                         • Threads
                                         • X
                                         • YouTube
                                         • My Worst Investment Ever Podcast
                                         
                                         ]]>c339343b-764c-4bb5-84fa-ede1e5e6f59bTue, 13 May 2025 06:00:00 +070025:28falsefullWhy Family Businesses Stay Stuck in Survival ModeI once worked with a family business run by two brothers and a sister. The sister was a dreamer, pushing niche markets and creative ideas. Her CEO brother was all about landing big accounts to keep cash flowing. Every strategy meeting turned into a shouting match. Nothing got decided, and the business was stuck.

                                         I pulled the creative sister aside and asked, “Do you want to be CEO?” She laughed, “No way.” That honesty was a game-changer. They finally aligned behind one leader, and the chaos started to fade. Is your family business stuck because no one’s steering the ship?

                                         Download The Profit Gap for free at TheProfitBootCamp.com to see 5 hidden reasons family businesses work hard but still fall short of profit.

                                         Survival mode kills profit

                                         Family businesses are special, but they come with unique traps. The daily grind, orders, payroll, and customer complaints can bury any chance of big-picture thinking. You’re so busy keeping the lights on that you forget to ask: where’s this business going? That’s survival mode, and it’s a profit killer. Strategy takes a backseat when you’re just trying to get through the week.

                                         Clear roles fix family chaos

                                         Then there’s the family dynamic. Loyalty and emotions can cloud tough calls. Maybe your cousin’s great at sales but terrible at managing people, yet no one says anything because he’s family. Or your parents are still on the payroll, even though they retired years ago. These are human issues, but they hurt your bottom line.

                                         The fix? Write down everyone’s roles, even if it’s awkward. Be clear: who’s in charge of what? I’ve seen families transform their businesses just by putting this on paper. It’s not about cutting people out but giving everyone a lane so the company can move forward. Always return to the core principle that increasing profit increases value for all family members.

                                         If every week feels like a scramble, you’re missing structure. Without a precise rhythm, you’re starting from zero every Monday. That’s exhausting, and it keeps you stuck. Try this: start one monthly owner profit check-in, 60 minutes max.

                                         Focus on one question: what’s driving profit next month? It could be following up on late invoices, cutting a small cost, or pushing a high-margin product. Get your team thinking about profit, not just staying busy. Structure turns chaos into progress.

                                         Family businesses also risk getting too comfortable. You might have a warm and loyal culture, but is it driving growth? Or is it just keeping the peace? Ask yourself: does our setup push us toward profit, or are we coasting on familiarity?

                                         One family business I know kept a low-margin product line because it was “part of our history.” Dropping it felt like betraying the past, but it freed up cash for marketing that doubled their revenue. Logic has to win.

                                         Structure over stress

                                         Here’s a quick story. I had a client who groaned, “Mondays are a mess.” Projects stalled, and he was micromanaging everything. We set a simple rhythm: Monday to set goals, Wednesday for updates, Friday to review wins. In just a few weeks, his team started owning their tasks. He wasn’t carrying the whole business anymore; he had breathing room. Structure doesn’t sound sexy, but it’s a game-changer.

                                         Now you see the real traps keeping your family business stuck. But what if the real problem isn’t your family, it’s you? In our next episode, we’ll face the hard truth about leadership and profit. Don’t miss it.

                                         Actions from prior episodes

                                         • Cut one cost: Block 30 minutes, review P&L, and cut one expense. Just one. Lead by example.
                                         • Find one drain: Review finances weekly, searching for one hidden loss. Act now.
                                         
                                         

                                         The next action

                                         • Align the family: Hold a monthly, one-hour family meeting. Ask: “What will drive next month’s profit?” Prioritize profit over family tension.
                                         
                                         

                                         Download The Profit Gap for free at TheProfitBootCamp.com to see 5 hidden reasons family businesses work hard but still fall short of profit.

                                          

                                         Andrew’s books

                                         • How to Start Building Your Wealth Investing in the Stock Market
                                         • My Worst Investment Ever
                                         • 9 Valuation Mistakes and How to Avoid Them
                                         • Transform Your Business with Dr.Deming’s 14 Points
                                         
                                         

                                         Andrew’s online programs

                                         • Valuation Master Class
                                         • The Become a Better Investor Community
                                         • How to Start Building Your Wealth Investing in the Stock Market
                                         • Finance Made Ridiculously Simple
                                         • FVMR Investing: Quantamental Investing Across the World
                                         • Become a Great Presenter and Increase Your Influence
                                         • Transform Your Business with Dr. Deming’s 14 Points
                                         • Achieve Your Goals
                                         
                                         

                                         Connect with Andrew Stotz:

                                         • astotz.com
                                         • LinkedIn
                                         • Facebook
                                         • Instagram
                                         • Threads
                                         • X
                                         • YouTube
                                         • My Worst Investment Ever Podcast
                                         
                                         ]]>I once worked with a family business run by two brothers and a sister. The sister was a dreamer, pushing niche markets and creative ideas. Her CEO brother was all about landing big accounts to keep cash flowing. Every strategy meeting turned into a shouting match. Nothing got decided, and the business was stuck.

                                         I pulled the creative sister aside and asked, “Do you want to be CEO?” She laughed, “No way.” That honesty was a game-changer. They finally aligned behind one leader, and the chaos started to fade. Is your family business stuck because no one’s steering the ship?

                                         Download The Profit Gap for free at TheProfitBootCamp.com to see 5 hidden reasons family businesses work hard but still fall short of profit.

                                         Survival mode kills profit

                                         Family businesses are special, but they come with unique traps. The daily grind, orders, payroll, and customer complaints can bury any chance of big-picture thinking. You’re so busy keeping the lights on that you forget to ask: where’s this business going? That’s survival mode, and it’s a profit killer. Strategy takes a backseat when you’re just trying to get through the week.

                                         Clear roles fix family chaos

                                         Then there’s the family dynamic. Loyalty and emotions can cloud tough calls. Maybe your cousin’s great at sales but terrible at managing people, yet no one says anything because he’s family. Or your parents are still on the payroll, even though they retired years ago. These are human issues, but they hurt your bottom line.

                                         The fix? Write down everyone’s roles, even if it’s awkward. Be clear: who’s in charge of what? I’ve seen families transform their businesses just by putting this on paper. It’s not about cutting people out but giving everyone a lane so the company can move forward. Always return to the core principle that increasing profit increases value for all family members.

                                         If every week feels like a scramble, you’re missing structure. Without a precise rhythm, you’re starting from zero every Monday. That’s exhausting, and it keeps you stuck. Try this: start one monthly owner profit check-in, 60 minutes max.

                                         Focus on one question: what’s driving profit next month? It could be following up on late invoices, cutting a small cost, or pushing a high-margin product. Get your team thinking about profit, not just staying busy. Structure turns chaos into progress.

                                         Family businesses also risk getting too comfortable. You might have a warm and loyal culture, but is it driving growth? Or is it just keeping the peace? Ask yourself: does our setup push us toward profit, or are we coasting on familiarity?

                                         One family business I know kept a low-margin product line because it was “part of our history.” Dropping it felt like betraying the past, but it freed up cash for marketing that doubled their revenue. Logic has to win.

                                         Structure over stress

                                         Here’s a quick story. I had a client who groaned, “Mondays are a mess.” Projects stalled, and he was micromanaging everything. We set a simple rhythm: Monday to set goals, Wednesday for updates, Friday to review wins. In just a few weeks, his team started owning their tasks. He wasn’t carrying the whole business anymore; he had breathing room. Structure doesn’t sound sexy, but it’s a game-changer.

                                         Now you see the real traps keeping your family business stuck. But what if the real problem isn’t your family, it’s you? In our next episode, we’ll face the hard truth about leadership and profit. Don’t miss it.

                                         Actions from prior episodes

                                         • Cut one cost: Block 30 minutes, review P&L, and cut one expense. Just one. Lead by example.
                                         • Find one drain: Review finances weekly, searching for one hidden loss. Act now.
                                         
                                         

                                         The next action

                                         • Align the family: Hold a monthly, one-hour family meeting. Ask: “What will drive next month’s profit?” Prioritize profit over family tension.
                                         
                                         

                                         Download The Profit Gap for free at TheProfitBootCamp.com to see 5 hidden reasons family businesses work hard but still fall short of profit.

                                          

                                         Andrew’s books

                                         • How to Start Building Your Wealth Investing in the Stock Market
                                         • My Worst Investment Ever
                                         • 9 Valuation Mistakes and How to Avoid Them
                                         • Transform Your Business with Dr.Deming’s 14 Points
                                         
                                         

                                         Andrew’s online programs

                                         • Valuation Master Class
                                         • The Become a Better Investor Community
                                         • How to Start Building Your Wealth Investing in the Stock Market
                                         • Finance Made Ridiculously Simple
                                         • FVMR Investing: Quantamental Investing Across the World
                                         • Become a Great Presenter and Increase Your Influence
                                         • Transform Your Business with Dr. Deming’s 14 Points
                                         • Achieve Your Goals
                                         
                                         

                                         Connect with Andrew Stotz:

                                         • astotz.com
                                         • LinkedIn
                                         • Facebook
                                         • Instagram
                                         • Threads
                                         • X
                                         • YouTube
                                         • My Worst Investment Ever Podcast
                                         
                                         ]]>47c26adc-6858-4cd2-9b3e-39025f7e922dThu, 08 May 2025 06:00:00 +070005:21falsefullJeff Holman - The Franchise Bubble That Burst Too SoonBIO: Jeff Holman, founder of Intellectual Strategies, is revolutionizing legal support for startups and scaling businesses. His Fractional Legal Team model provides expert legal guidance without the cost of a full-time team.

                                         STORY: Jeff started a cold plunge and sauna business during the pandemic. The company looked great, but he had employee issues, which affected its success. Soon, tens of other studios, brands, and franchises were all popping up within a mile of Jeff’s studio.

                                         LEARNING: Create strategic alignment incrementally and iteratively.

                                          

                                         “Create strategic alignment incrementally and iteratively because the business that you’re operating today might not be the business that you pivot to tomorrow.”

                                         Jeff Holman

                                          

                                         Guest profile

                                         Jeff Holman, founder of Intellectual Strategies, is revolutionizing legal support for startups and scaling businesses. His Fractional Legal Team model provides expert legal guidance without the cost of a full-time team. With expertise in engineering, law, and business, Jeff helps companies navigate complex challenges, enabling them to grow with confidence.

                                         Worst investment ever

                                         During the COVID-19 pandemic, Jeff decided to find ways to spend his time and invest some of his money. He settled on a cold plunge and sauna business. The spreadsheet looked great, and the numbers were fantastic. The business model followed another business that Jeff had previously done, which had achieved considerable success.

                                         Jeff found a local company in Utah that was manufacturing cold plunges at the time and secured a couple of investor friends to invest in the business. He rented an office space and converted one of the suites into a cold plunge and sauna studio.

                                         The biggest mistake that cost Jeff this business was hiring employees and trying to get them more involved in marketing. He would help train and incentivize employees, ensure tasks were completed, have people submit reports, follow up for accountability, and more. It felt like he was babysitting his employees. This eventually brought his business down. However, the final nail in the coffin was a proliferation of other studios, brands, and franchises, all popping up within a mile of Jeff’s studio.

                                         Lessons learned

                                         • If you’re part of a franchise, consider visiting other franchise businesses that may not be competing with yours or those a little further away from your customer base to observe how they operate.
                                         • If you’re pivoting your business, create strategic alignment incrementally and iteratively because the business you’re operating today might not be the one you pivot to tomorrow.
                                         
                                         

                                         Andrew’s takeaways

                                         Find a business that does what you want to do in another state and go work with them for a while.

                                         Actionable advice

                                         Validate the business idea you want to invest in well beyond the spreadsheet. Research regulations, test your MVP, identify channels that you’ll use to drive revenue, and much more.

                                         Jeff’s recommended resources

                                         Jeff’s journey has taught him the value of seeking expert advice. He recommends holding a strategy call with him if you need legal expertise to scale your business confidently. He also suggests reading Rocket Fuel and Traction: Get a Grip on Your Business by Gino Wickman to learn how to align intellectual property, assets, patents, trademarks, and copyrights with your business objectives and strategy. This advice can provide reassurance and confidence as you navigate the complexities of business.

                                         No.1 goal for the next 12 months

                                         Jeff’s number one goal for the next 12 months is to expand his law firm and also evangelize the fractional legal team model.

                                         Parting words

                                          

                                         “Innovate with confidence.”

                                         Jeff Holman

                                          

                                         [spp-transcript]

                                          

                                         Connect with Jeff Holman

                                         • LinkedIn
                                         • Facebook
                                         • Instagram
                                         • Youtube
                                         • Website
                                         
                                         

                                         Andrew’s books

                                         • How to Start Building Your Wealth Investing in the Stock Market
                                         • My Worst Investment Ever
                                         • 9 Valuation Mistakes and How to Avoid Them
                                         • Transform Your Business with Dr.Deming’s 14 Points
                                         
                                         

                                         Andrew’s online programs

                                         • Valuation Master Class
                                         • The Become a Better Investor Community
                                         • How to Start Building Your Wealth Investing in the Stock Market
                                         • Finance Made Ridiculously Simple
                                         • FVMR Investing: Quantamental Investing Across the World
                                         • Become a Great Presenter and Increase Your Influence
                                         • Transform Your Business with Dr. Deming’s 14 Points
                                         • Achieve Your Goals
                                         
                                         

                                         Connect with Andrew Stotz:

                                         • astotz.com
                                         • LinkedIn
                                         • Facebook
                                         • Instagram
                                         • Threads
                                         • X
                                         • YouTube
                                         • My Worst Investment Ever Podcast
                                         
                                         ]]>BIO: Jeff Holman, founder of Intellectual Strategies, is revolutionizing legal support for startups and scaling businesses. His Fractional Legal Team model provides expert legal guidance without the cost of a full-time team.

                                         STORY: Jeff started a cold plunge and sauna business during the pandemic. The company looked great, but he had employee issues, which affected its success. Soon, tens of other studios, brands, and franchises were all popping up within a mile of Jeff’s studio.

                                         LEARNING: Create strategic alignment incrementally and iteratively.

                                          

                                         “Create strategic alignment incrementally and iteratively because the business that you’re operating today might not be the business that you pivot to tomorrow.”

                                         Jeff Holman

                                          

                                         Guest profile

                                         Jeff Holman, founder of Intellectual Strategies, is revolutionizing legal support for startups and scaling businesses. His Fractional Legal Team model provides expert legal guidance without the cost of a full-time team. With expertise in engineering, law, and business, Jeff helps companies navigate complex challenges, enabling them to grow with confidence.

                                         Worst investment ever

                                         During the COVID-19 pandemic, Jeff decided to find ways to spend his time and invest some of his money. He settled on a cold plunge and sauna business. The spreadsheet looked great, and the numbers were fantastic. The business model followed another business that Jeff had previously done, which had achieved considerable success.

                                         Jeff found a local company in Utah that was manufacturing cold plunges at the time and secured a couple of investor friends to invest in the business. He rented an office space and converted one of the suites into a cold plunge and sauna studio.

                                         The biggest mistake that cost Jeff this business was hiring employees and trying to get them more involved in marketing. He would help train and incentivize employees, ensure tasks were completed, have people submit reports, follow up for accountability, and more. It felt like he was babysitting his employees. This eventually brought his business down. However, the final nail in the coffin was a proliferation of other studios, brands, and franchises, all popping up within a mile of Jeff’s studio.

                                         Lessons learned

                                         • If you’re part of a franchise, consider visiting other franchise businesses that may not be competing with yours or those a little further away from your customer base to observe how they operate.
                                         • If you’re pivoting your business, create strategic alignment incrementally and iteratively because the business you’re operating today might not be the one you pivot to tomorrow.
                                         
                                         

                                         Andrew’s takeaways

                                         Find a business that does what you want to do in another state and go work with them for a while.

                                         Actionable advice

                                         Validate the business idea you want to invest in well beyond the spreadsheet. Research regulations, test your MVP, identify channels that you’ll use to drive revenue, and much more.

                                         Jeff’s recommended resources

                                         Jeff’s journey has taught him the value of seeking expert advice. He recommends holding a strategy call with him if you need legal expertise to scale your business confidently. He also suggests reading Rocket Fuel and Traction: Get a Grip on Your Business by Gino Wickman to learn how to align intellectual property, assets, patents, trademarks, and copyrights with your business objectives and strategy. This advice can provide reassurance and confidence as you navigate the complexities of business.

                                         No.1 goal for the next 12 months

                                         Jeff’s number one goal for the next 12 months is to expand his law firm and also evangelize the fractional legal team model.

                                         Parting words

                                          

                                         “Innovate with confidence.”

                                         Jeff Holman

                                          

                                         [spp-transcript]

                                          

                                         Connect with Jeff Holman

                                         • LinkedIn
                                         • Facebook
                                         • Instagram
                                         • Youtube
                                         • Website
                                         
                                         

                                         Andrew’s books

                                         • How to Start Building Your Wealth Investing in the Stock Market
                                         • My Worst Investment Ever
                                         • 9 Valuation Mistakes and How to Avoid Them
                                         • Transform Your Business with Dr.Deming’s 14 Points
                                         
                                         

                                         Andrew’s online programs

                                         • Valuation Master Class
                                         • The Become a Better Investor Community
                                         • How to Start Building Your Wealth Investing in the Stock Market
                                         • Finance Made Ridiculously Simple
                                         • FVMR Investing: Quantamental Investing Across the World
                                         • Become a Great Presenter and Increase Your Influence
                                         • Transform Your Business with Dr. Deming’s 14 Points
                                         • Achieve Your Goals
                                         
                                         

                                         Connect with Andrew Stotz:

                                         • astotz.com
                                         • LinkedIn
                                         • Facebook
                                         • Instagram
                                         • Threads
                                         • X
                                         • YouTube
                                         • My Worst Investment Ever Podcast
                                         
                                         ]]>88866eb0-75d6-47f3-8ffe-82d7672e9cccTue, 06 May 2025 06:00:00 +070037:53falsefullDelay Fixing Profit and the Hole Gets DeeperI met a family business owner in the Philippines who was proud of his “stable” company. Two percent net profit, year after year. Sounds okay, right? Until I showed him the math: because his margin was deeply below average, he’d missed out on $1.2 million in potential profit over three years.

                                         That “stability” was a slow bleed, draining his business while he didn’t even notice. Are you losing money you can’t see? That’s what this episode is all about: how profit problems silently grow while you’re looking the other way.

                                         Download The Profit Gap for free at TheProfitBootCamp.com to see 5 hidden reasons family businesses work hard but still fall short of profit.

                                         Small leaks, big losses

                                         Profit problems don’t usually hit you like a freight train. They creep in quietly; a slight inefficiency here, a missed opportunity there. Maybe it’s a subscription you forgot to cancel or pricing that hasn’t budged in years. These leaks add up, and the longer you wait, the harder they are to fix. Think of it like a leaky pipe: today’s drip becomes a flood tomorrow.

                                         The longer you delay, the more risk and complexity you’re piling on. Your margins shrink, your stress grows, and suddenly, you’re vulnerable to a bad month or a competitor’s move. I experienced this in my own business leading up to the government COVID lockdowns.

                                         The good news? You don’t need a massive overhaul to start. Just find one recurring cost that’s dragging you down. It could be an overpriced vendor, software you barely use, or a process that wastes your team’s time.

                                         One client I worked with found $1,500 monthly in unused cloud storage. Cutting it took 10 minutes and saved him $18,000 a year. That’s the kind of win you can grab right now. Small tweaks today prevent painful losses tomorrow.

                                         Don’t overthink, just review

                                         Here’s a simple way to start: schedule a 30-minute profit review this month. Pull your profit and loss statement and look for one leak. Don’t overcomplicate it. Just ask: where’s money slipping away?

                                         If you don’t know your P&L, ask your accountant to walk you through it. You may need a new accountant if your accountant can’t do that. This isn’t about being a finance wizard but knowing your business. One owner I know avoided his financials for years, trusting his bookkeeper. When we finally looked, we found $40,000 lost to outdated pricing. A 30-minute review fixed it. That’s the power of paying attention.

                                         Don’t wait until you’re desperate. I’ve seen too many owners hold off until they’re scraping by, thinking they’ll fix profit when things “calm down.” Spoiler: things don’t calm down. The time to act is now when you still have options. If you wait until you’re broke, your choices shrink fast. You might have to cut staff, take a loan, or close up shop. Acting early keeps you in control.

                                         Here’s a question to spark clarity: if a third party bought your business today, what’s the first thing they would fix?

                                         Maybe it’s a product line barely breaking even or a client who pays late but demands your time. Write down one fix and tackle it this week. That mindset, seeing your business with fresh eyes, uncovers profit you didn’t know you had. Don’t wait for the third party to arrive. Fix your business now.

                                         See your business with fresh eyes

                                         Let’s pause for a story. I worked with a client who never tracked profit by product. His team was convinced their manufactured products were the cash cow, way better than their imported products. We dug into the numbers, and guess what?

                                         The imported products they sold were nearly twice as profitable. He immediately shifted strategy, focused on imports, raised prices on the manufactured stuff, and boosted gross profit by 17% in three months. That money was sitting there, waiting to be found. What’s hiding in your business?

                                         You now see how delay kills profit, but why is breaking free from survival mode so hard? In our next episode, we’ll dig into why family businesses stay stuck and how to finally escape. Don’t miss it.

                                         Action from the prior episode

                                         • Cut one cost: Block 30 minutes, review P&L, and cut one expense. Just one. Lead by example.
                                         
                                         

                                         The next action

                                         • Find one drain: Review finances weekly, searching for one hidden loss. Act now.
                                         
                                         

                                         Download The Profit Gap for free at TheProfitBootCamp.com to see 5 hidden reasons family businesses work hard but still fall short of profit.

                                          

                                         Andrew’s books

                                         • How to Start Building Your Wealth Investing in the Stock Market
                                         • My Worst Investment Ever
                                         • 9 Valuation Mistakes and How to Avoid Them
                                         • Transform Your Business with Dr.Deming’s 14 Points
                                         
                                         

                                         Andrew’s online programs

                                         • Valuation Master Class
                                         • The Become a Better Investor Community
                                         • How to Start Building Your Wealth Investing in the Stock Market
                                         • Finance Made Ridiculously Simple
                                         • FVMR Investing: Quantamental Investing Across the World
                                         • Become a Great Presenter and Increase Your Influence
                                         • Transform Your Business with Dr. Deming’s 14 Points
                                         • Achieve Your Goals
                                         
                                         

                                         Connect with Andrew Stotz:

                                         • astotz.com
                                         • LinkedIn
                                         • Facebook
                                         • Instagram
                                         • Threads
                                         • X
                                         • YouTube
                                         • My Worst Investment Ever Podcast
                                         
                                         ]]>I met a family business owner in the Philippines who was proud of his “stable” company. Two percent net profit, year after year. Sounds okay, right? Until I showed him the math: because his margin was deeply below average, he’d missed out on $1.2 million in potential profit over three years.

                                         That “stability” was a slow bleed, draining his business while he didn’t even notice. Are you losing money you can’t see? That’s what this episode is all about: how profit problems silently grow while you’re looking the other way.

                                         Download The Profit Gap for free at TheProfitBootCamp.com to see 5 hidden reasons family businesses work hard but still fall short of profit.

                                         Small leaks, big losses

                                         Profit problems don’t usually hit you like a freight train. They creep in quietly; a slight inefficiency here, a missed opportunity there. Maybe it’s a subscription you forgot to cancel or pricing that hasn’t budged in years. These leaks add up, and the longer you wait, the harder they are to fix. Think of it like a leaky pipe: today’s drip becomes a flood tomorrow.

                                         The longer you delay, the more risk and complexity you’re piling on. Your margins shrink, your stress grows, and suddenly, you’re vulnerable to a bad month or a competitor’s move. I experienced this in my own business leading up to the government COVID lockdowns.

                                         The good news? You don’t need a massive overhaul to start. Just find one recurring cost that’s dragging you down. It could be an overpriced vendor, software you barely use, or a process that wastes your team’s time.

                                         One client I worked with found $1,500 monthly in unused cloud storage. Cutting it took 10 minutes and saved him $18,000 a year. That’s the kind of win you can grab right now. Small tweaks today prevent painful losses tomorrow.

                                         Don’t overthink, just review

                                         Here’s a simple way to start: schedule a 30-minute profit review this month. Pull your profit and loss statement and look for one leak. Don’t overcomplicate it. Just ask: where’s money slipping away?

                                         If you don’t know your P&L, ask your accountant to walk you through it. You may need a new accountant if your accountant can’t do that. This isn’t about being a finance wizard but knowing your business. One owner I know avoided his financials for years, trusting his bookkeeper. When we finally looked, we found $40,000 lost to outdated pricing. A 30-minute review fixed it. That’s the power of paying attention.

                                         Don’t wait until you’re desperate. I’ve seen too many owners hold off until they’re scraping by, thinking they’ll fix profit when things “calm down.” Spoiler: things don’t calm down. The time to act is now when you still have options. If you wait until you’re broke, your choices shrink fast. You might have to cut staff, take a loan, or close up shop. Acting early keeps you in control.

                                         Here’s a question to spark clarity: if a third party bought your business today, what’s the first thing they would fix?

                                         Maybe it’s a product line barely breaking even or a client who pays late but demands your time. Write down one fix and tackle it this week. That mindset, seeing your business with fresh eyes, uncovers profit you didn’t know you had. Don’t wait for the third party to arrive. Fix your business now.

                                         See your business with fresh eyes

                                         Let’s pause for a story. I worked with a client who never tracked profit by product. His team was convinced their manufactured products were the cash cow, way better than their imported products. We dug into the numbers, and guess what?

                                         The imported products they sold were nearly twice as profitable. He immediately shifted strategy, focused on imports, raised prices on the manufactured stuff, and boosted gross profit by 17% in three months. That money was sitting there, waiting to be found. What’s hiding in your business?

                                         You now see how delay kills profit, but why is breaking free from survival mode so hard? In our next episode, we’ll dig into why family businesses stay stuck and how to finally escape. Don’t miss it.

                                         Action from the prior episode

                                         • Cut one cost: Block 30 minutes, review P&L, and cut one expense. Just one. Lead by example.
                                         
                                         

                                         The next action

                                         • Find one drain: Review finances weekly, searching for one hidden loss. Act now.
                                         
                                         

                                         Download The Profit Gap for free at TheProfitBootCamp.com to see 5 hidden reasons family businesses work hard but still fall short of profit.

                                          

                                         Andrew’s books

                                         • How to Start Building Your Wealth Investing in the Stock Market
                                         • My Worst Investment Ever
                                         • 9 Valuation Mistakes and How to Avoid Them
                                         • Transform Your Business with Dr.Deming’s 14 Points
                                         
                                         

                                         Andrew’s online programs

                                         • Valuation Master Class
                                         • The Become a Better Investor Community
                                         • How to Start Building Your Wealth Investing in the Stock Market
                                         • Finance Made Ridiculously Simple
                                         • FVMR Investing: Quantamental Investing Across the World
                                         • Become a Great Presenter and Increase Your Influence
                                         • Transform Your Business with Dr. Deming’s 14 Points
                                         • Achieve Your Goals
                                         
                                         

                                         Connect with Andrew Stotz:

                                         • astotz.com
                                         • LinkedIn
                                         • Facebook
                                         • Instagram
                                         • Threads
                                         • X
                                         • YouTube
                                         • My Worst Investment Ever Podcast
                                         
                                         ]]>902adf41-7c64-4fa8-bea8-f422361a0213Thu, 01 May 2025 06:00:00 +070006:04falsefullEnrich Your Future 31: Risk vs. Uncertainty: The Investor’s Blind SpotIn this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 31: The Uncertainty of Investing.

                                         LEARNING: Equity investing is always about uncertainty.

                                          

                                         “Most investors think of investing as much more like risk and forget there’s a lot of uncertainty. That’s a problem because investing is always about uncertainty. You have to recognize that we cannot rely on historical data to tell us that much about the future.”

                                         Larry Swedroe

                                          

                                         In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                         Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 31: The Uncertainty of Investing.

                                         Chapter 31: The Uncertainty of Investing

                                         In this chapter, Larry explains the difference between risk and uncertainty. He highlights that one of the most important concepts to grasp is that investing is about dealing with both risk and uncertainty.

                                         University of Chicago professor Frank Knight defined risk and uncertainty as follows: Risk is present when future events occur with measurable probability. Uncertainty is present when the likelihood of future events is indefinite or incalculable. Larry further explains that risk involves known probabilities, like casino odds or life insurance estimates, while uncertainty involves unknown outcomes, such as major events like the Great Depression or COVID-19.

                                         Larry explains that we sometimes know the odds of an event occurring with certainty. For example, because of demographic data, we can reasonably estimate the odds that a 65-year-old couple will have at least one spouse live beyond 90. However, we cannot know the exact odds because future advances in medical science may extend life expectancy. Conversely, new diseases may arise that shorten life expectancy.

                                         Why must you understand the difference between risk and uncertainty?

                                         Larry insists that it is crucial to understand the difference between risk and uncertainty. This understanding is key, as many investors mistakenly view equities as closer to risk, where the odds can be precisely calculated. This misconception often arises when economic conditions are favorable. The ability to estimate the odds gives investors a false sense of confidence, leading them to make decisions that exceed their ability, willingness, and need to take risks.

                                         However, Larry adds that the perception of equity investing shifts from risk to uncertainty during crises. Since investors prefer risky bets (where they can calculate the odds, like investing in a stable company with a proven track record) to uncertain bets (where the odds cannot be calculated, like investing in a startup with an unpredictable future) when the markets begin to appear to investors to become uncertain, the risk premium demanded rises, and that is what causes severe bear markets.

                                         Further, dramatic falls in prices lead to panicked selling. Larry says that investors tend to sell well after market declines have already occurred and buy well after rallies have long begun. The result is that they dramatically underperform the mutual funds they invest in.

                                         How to stay safe despite risk and uncertainty

                                         Larry emphasizes that one key to success is understanding that equity investing is always about uncertainty. Another crucial aspect is understanding the importance of choosing an equity allocation that doesn’t exceed your risk tolerance.

                                         To further mitigate these uncertainties, Larry strongly recommends diversifying your portfolios. This strategy can provide a sense of security and preparedness in the face of market volatility. Additionally, he suggests using Monte Carlo simulations to account for various potential outcomes.

                                         Did you miss out on the previous chapters? Check them out:

                                         Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                                         • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                         • Enrich Your Future 02: How Markets Set Prices
                                         • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                         • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                         • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                         • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                         • Enrich Your Future 07: The Value of Security Analysis
                                         • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                         • Enrich Your Future 09: The Fed Model and the Money Illusion
                                         
                                         

                                         Part II: Strategic Portfolio Decisions

                                         • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                         • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                                         • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                                         • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                                         • Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
                                         • Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
                                         • Enrich Your Future 16: The Estimated Return Is Not Inevitable
                                         • Enrich Your Future 17: Take a Portfolio Approach to Your Investments
                                         • Enrich Your Future 18: Build a Portfolio That Can Withstand the Black Swans
                                         • Enrich Your Future 19: The Gold Illusion: Why Investing in Gold May Not Be Safe
                                         • Enrich Your Future 20: Passive Investing Is the Key to Prudent Wealth Management
                                         
                                         

                                         Part III:...]]>In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 31: The Uncertainty of Investing.

                                         LEARNING: Equity investing is always about uncertainty.

                                          

                                         “Most investors think of investing as much more like risk and forget there’s a lot of uncertainty. That’s a problem because investing is always about uncertainty. You have to recognize that we cannot rely on historical data to tell us that much about the future.”

                                         Larry Swedroe

                                          

                                         In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                         Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 31: The Uncertainty of Investing.

                                         Chapter 31: The Uncertainty of Investing

                                         In this chapter, Larry explains the difference between risk and uncertainty. He highlights that one of the most important concepts to grasp is that investing is about dealing with both risk and uncertainty.

                                         University of Chicago professor Frank Knight defined risk and uncertainty as follows: Risk is present when future events occur with measurable probability. Uncertainty is present when the likelihood of future events is indefinite or incalculable. Larry further explains that risk involves known probabilities, like casino odds or life insurance estimates, while uncertainty involves unknown outcomes, such as major events like the Great Depression or COVID-19.

                                         Larry explains that we sometimes know the odds of an event occurring with certainty. For example, because of demographic data, we can reasonably estimate the odds that a 65-year-old couple will have at least one spouse live beyond 90. However, we cannot know the exact odds because future advances in medical science may extend life expectancy. Conversely, new diseases may arise that shorten life expectancy.

                                         Why must you understand the difference between risk and uncertainty?

                                         Larry insists that it is crucial to understand the difference between risk and uncertainty. This understanding is key, as many investors mistakenly view equities as closer to risk, where the odds can be precisely calculated. This misconception often arises when economic conditions are favorable. The ability to estimate the odds gives investors a false sense of confidence, leading them to make decisions that exceed their ability, willingness, and need to take risks.

                                         However, Larry adds that the perception of equity investing shifts from risk to uncertainty during crises. Since investors prefer risky bets (where they can calculate the odds, like investing in a stable company with a proven track record) to uncertain bets (where the odds cannot be calculated, like investing in a startup with an unpredictable future) when the markets begin to appear to investors to become uncertain, the risk premium demanded rises, and that is what causes severe bear markets.

                                         Further, dramatic falls in prices lead to panicked selling. Larry says that investors tend to sell well after market declines have already occurred and buy well after rallies have long begun. The result is that they dramatically underperform the mutual funds they invest in.

                                         How to stay safe despite risk and uncertainty

                                         Larry emphasizes that one key to success is understanding that equity investing is always about uncertainty. Another crucial aspect is understanding the importance of choosing an equity allocation that doesn’t exceed your risk tolerance.

                                         To further mitigate these uncertainties, Larry strongly recommends diversifying your portfolios. This strategy can provide a sense of security and preparedness in the face of market volatility. Additionally, he suggests using Monte Carlo simulations to account for various potential outcomes.

                                         Did you miss out on the previous chapters? Check them out:

                                         Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                                         • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                         • Enrich Your Future 02: How Markets Set Prices
                                         • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                         • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                         • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                         • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                         • Enrich Your Future 07: The Value of Security Analysis
                                         • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                         • Enrich Your Future 09: The Fed Model and the Money Illusion

                                         
                                         

                                         Part II: Strategic Portfolio Decisions

                                         • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                         • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                                         • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                                         • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                                         • Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
                                         • Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
                                         • Enrich Your Future 16: The Estimated Return Is Not Inevitable
                                         • Enrich Your Future 17: Take a Portfolio Approach to Your Investments
                                         • Enrich Your Future 18: Build a Portfolio That Can Withstand the Black Swans
                                         • Enrich Your Future 19: The Gold Illusion: Why Investing in Gold May Not Be Safe
                                         • Enrich Your Future 20: Passive Investing Is the Key to Prudent Wealth Management

                                         
                                         

                                         Part III: Behavioral Finance: We Have Met the Enemy and He Is Us

                                         • Enrich Your Future 21: Think You Can Beat the Market? Think Again
                                         • Enrich Your Future 22: Some Risks Are Not Worth Taking
                                         • Enrich Your Future 23: Seeing Through the Frame: Making Better Investment Decisions
                                         • Enrich Your Future 24: Why Smart People Do Dumb Things
                                         • Enrich Your Future 25: Stock Crashes Happen—Be Prepared
                                         • Enrich Your Future 26: Should You Invest Now or Spread It Out?
                                         • Enrich Your Future 27: Pascal’s Wager: Betting on Consequences Over Probabilities
                                         • Enrich Your Future 28 & 29: How to Outsmart Your Investing Biases
                                         • Enrich Your Future 30: The Hidden Cost of Chasing Dividend Stocks

                                         
                                         

                                         About Larry Swedroe

                                         Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                         Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                         Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                         Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                          

                                         [spp-transcript]

                                          

                                         Connect with Larry Swedroe

                                         • LinkedIn
                                         • X
                                         • Website
                                         • Books

                                         
                                         

                                         Andrew’s books

                                         • How to Start Building Your Wealth Investing in the Stock Market
                                         • My Worst Investment Ever
                                         • 9 Valuation Mistakes and How to Avoid Them
                                         • Transform Your Business with Dr.Deming’s 14 Points

                                         
                                         

                                         Andrew’s online programs

                                         • Valuation Master Class
                                         • The Become a Better Investor Community
                                         • How to Start Building Your Wealth Investing in the Stock Market
                                         • Finance Made Ridiculously Simple
                                         • FVMR Investing: Quantamental Investing Across the World
                                         • Become a Great Presenter and Increase Your Influence
                                         • Transform Your Business with Dr. Deming’s 14 Points
                                         • Achieve Your Goals

                                         
                                         

                                         Connect with Andrew Stotz:

                                         • astotz.com
                                         • LinkedIn
                                         • Facebook
                                         • Instagram
                                         • Threads
                                         • X
                                         • YouTube
                                         • My Worst Investment Ever Podcast

                                         
                                         ]]>80603b4d-3796-48d8-b810-9465c1dd5d9cTue, 29 Apr 2025 06:00:00 +070026:23falsefullNo One Is Coming to Save Your Business, Do It YourselfI want to tell you about a midsize business owner drowning in consultants. He kept hiring them, one after another, each promising to turn things around. They’d show up, drop off a fancy report, and disappear. Meanwhile, his profit stayed flat, his team was overwhelmed, and he barely slept.

                                         One night, he was alone in his office, staring at a payroll he wasn’t sure he could cover. That’s when it hit him. He told me, “I realized it’s on me. No one’s coming to save my business.” That moment was his turning point. So, what’s yours?

                                         Download The Profit Gap for free at TheProfitBootCamp.com to see 5 hidden reasons family businesses work hard but still fall short of profit.

                                         The turning point every owner needs

                                         Let’s be real: hoping someone else will fix your problems is tempting. A consultant, a new hire, maybe even some magic software. But here’s the truth: no one will care about your business as much as you do. Consultants can advise, pinpoint blind spots, and maybe even hand you a plan. But if you don’t act, nothing changes.

                                         I’ve seen owners spend thousands on experts only to shelve their advice because it felt too hard or the timing wasn’t “perfect.” Waiting for the right moment is a trap. Your business doesn’t have time for that. The problems are piling up: low margins, stressed teams, endless emergencies, they’re not going away on their own. You have to step up.

                                         Your calendar tells the truth

                                         I know what you’re thinking: “I’m already doing everything I can!” But are you? Pull up your calendar right now. What does it say? If it’s packed with meetings, emails, and putting out fires, you’re probably not leading; you’re reacting.

                                         Your calendar tells the truth about your priorities. If there’s no time blocked for profit-focused work, like reviewing your P&L or cutting a bloated expense, you’re not owning the future of your business.

                                         One client I worked with swore he had no time for strategy. His calendar showed 12 hours a week chasing emergencies, zero on profit. We carved out just 90 minutes a week to review his financials. Within months, his managers solved problems without him, and the whole business felt calmer and more focused. That’s the power of taking charge.

                                         Here’s the thing: you can’t pay someone to care as much as you do. You can hire the best accountant and the sharpest operations manager, but responsibility for your business’s success rests with you.

                                         It’s not about working harder; it’s about working smarter. Start small. Pick one profit-related task this week. Maybe it’s canceling an unused subscription, renegotiating a vendor contract, or reviewing your pricing. Do it by Friday. One task, done well, can shift your momentum.

                                         A client thought he needed a complete overhaul to boost profit. Instead, we started with one thing: he cut a $900 monthly software he barely used. That small win gave him the confidence to tackle bigger issues.

                                         Start small, lead strong

                                         Your team is watching you, too. They feed off your clarity and energy. If you’re scattered, putting out fires, they’ll be scattered too. But they’ll follow if you show up focused with a clear plan. That client I mentioned. Whose calendar was filled with firefighting?

                                         Once he started those weekly financial reviews, his team noticed. They started coming to meetings prepared, pitching ideas to save money. Your leadership sets the tone. When you own your business’s future, you also allow your team to step up.

                                         Owning your business isn’t just about responsibility; it’s your biggest advantage. No one knows your customers, team, or vision like you do. That’s your edge. But you have to use it. Stop waiting for a savior. Stop hoping the market will turn or a new hire will fix everything. The power to change your business is in your hands right now.

                                         So, here’s your action step for this week: open your calendar and block 30 minutes to tackle one profit task. Review your P&L and look for one cost to cut. Maybe it’s calling a vendor to negotiate a better rate. Just do it. That’s how you start owning your business again.

                                         You’re ready to step up, but here’s the catch: what if your business is already leaking cash? In our next episode, we’ll uncover the hidden ways your company is losing money and why waiting even one more month could cost you everything. Don’t miss it.

                                         Action

                                         • Cut one cost: Block 30 minutes, review P&L, and cut one expense. Just one. Lead by example.

                                         
                                         

                                         Download The Profit Gap for free at TheProfitBootCamp.com to see 5 hidden reasons family businesses work hard but still fall short of profit.

                                          

                                         Andrew’s books

                                         • How to Start Building Your Wealth Investing in the Stock Market
                                         • My Worst Investment Ever
                                         • 9 Valuation Mistakes and How to Avoid Them
                                         • Transform Your Business with Dr.Deming’s 14 Points

                                         
                                         

                                         Andrew’s online programs

                                         • Valuation Master Class
                                         • The Become a Better Investor Community
                                         • How to Start Building Your Wealth Investing in the Stock Market
                                         • Finance Made Ridiculously Simple
                                         • FVMR Investing: Quantamental Investing Across the World
                                         • Become a Great Presenter and Increase Your Influence
                                         • Transform Your Business with Dr. Deming’s 14 Points
                                         • Achieve Your Goals

                                         
                                         

                                         Connect with Andrew Stotz:

                                         • astotz.com
                                         • LinkedIn
                                         • Facebook
                                         • Instagram
                                         • Threads
                                         • X
                                         • YouTube
                                         • My Worst Investment Ever Podcast

                                         
                                         ]]>I want to tell you about a midsize business owner drowning in consultants. He kept hiring them, one after another, each promising to turn things around. They’d show up, drop off a fancy report, and disappear. Meanwhile, his profit stayed flat, his team was overwhelmed, and he barely slept.

                                         One night, he was alone in his office, staring at a payroll he wasn’t sure he could cover. That’s when it hit him. He told me, “I realized it’s on me. No one’s coming to save my business.” That moment was his turning point. So, what’s yours?

                                         Download The Profit Gap for free at TheProfitBootCamp.com to see 5 hidden reasons family businesses work hard but still fall short of profit.

                                         The turning point every owner needs

                                         Let’s be real: hoping someone else will fix your problems is tempting. A consultant, a new hire, maybe even some magic software. But here’s the truth: no one will care about your business as much as you do. Consultants can advise, pinpoint blind spots, and maybe even hand you a plan. But if you don’t act, nothing changes.

                                         I’ve seen owners spend thousands on experts only to shelve their advice because it felt too hard or the timing wasn’t “perfect.” Waiting for the right moment is a trap. Your business doesn’t have time for that. The problems are piling up: low margins, stressed teams, endless emergencies, they’re not going away on their own. You have to step up.

                                         Your calendar tells the truth

                                         I know what you’re thinking: “I’m already doing everything I can!” But are you? Pull up your calendar right now. What does it say? If it’s packed with meetings, emails, and putting out fires, you’re probably not leading; you’re reacting.

                                         Your calendar tells the truth about your priorities. If there’s no time blocked for profit-focused work, like reviewing your P&L or cutting a bloated expense, you’re not owning the future of your business.

                                         One client I worked with swore he had no time for strategy. His calendar showed 12 hours a week chasing emergencies, zero on profit. We carved out just 90 minutes a week to review his financials. Within months, his managers solved problems without him, and the whole business felt calmer and more focused. That’s the power of taking charge.

                                         Here’s the thing: you can’t pay someone to care as much as you do. You can hire the best accountant and the sharpest operations manager, but responsibility for your business’s success rests with you.

                                         It’s not about working harder; it’s about working smarter. Start small. Pick one profit-related task this week. Maybe it’s canceling an unused subscription, renegotiating a vendor contract, or reviewing your pricing. Do it by Friday. One task, done well, can shift your momentum.

                                         A client thought he needed a complete overhaul to boost profit. Instead, we started with one thing: he cut a $900 monthly software he barely used. That small win gave him the confidence to tackle bigger issues.

                                         Start small, lead strong

                                         Your team is watching you, too. They feed off your clarity and energy. If you’re scattered, putting out fires, they’ll be scattered too. But they’ll follow if you show up focused with a clear plan. That client I mentioned. Whose calendar was filled with firefighting?

                                         Once he started those weekly financial reviews, his team noticed. They started coming to meetings prepared, pitching ideas to save money. Your leadership sets the tone. When you own your business’s future, you also allow your team to step up.

                                         Owning your business isn’t just about responsibility; it’s your biggest advantage. No one knows your customers, team, or vision like you do. That’s your edge. But you have to use it. Stop waiting for a savior. Stop hoping the market will turn or a new hire will fix everything. The power to change your business is in your hands right now.

                                         So, here’s your action step for this week: open your calendar and block 30 minutes to tackle one profit task. Review your P&L and look for one cost to cut. Maybe it’s calling a vendor to negotiate a better rate. Just do it. That’s how you start owning your business again.

                                         You’re ready to step up, but here’s the catch: what if your business is already leaking cash? In our next episode, we’ll uncover the hidden ways your company is losing money and why waiting even one more month could cost you everything. Don’t miss it.

                                         Action

                                         • Cut one cost: Block 30 minutes, review P&L, and cut one expense. Just one. Lead by example.

                                         
                                         

                                         Download The Profit Gap for free at TheProfitBootCamp.com to see 5 hidden reasons family businesses work hard but still fall short of profit.

                                          

                                         Andrew’s books

                                         • How to Start Building Your Wealth Investing in the Stock Market
                                         • My Worst Investment Ever
                                         • 9 Valuation Mistakes and How to Avoid Them
                                         • Transform Your Business with Dr.Deming’s 14 Points

                                         
                                         

                                         Andrew’s online programs

                                         • Valuation Master Class
                                         • The Become a Better Investor Community
                                         • How to Start Building Your Wealth Investing in the Stock Market
                                         • Finance Made Ridiculously Simple
                                         • FVMR Investing: Quantamental Investing Across the World
                                         • Become a Great Presenter and Increase Your Influence
                                         • Transform Your Business with Dr. Deming’s 14 Points
                                         • Achieve Your Goals

                                         
                                         

                                         Connect with Andrew Stotz:

                                         • astotz.com
                                         • LinkedIn
                                         • Facebook
                                         • Instagram
                                         • Threads
                                         • X
                                         • YouTube
                                         • My Worst Investment Ever Podcast

                                         
                                         ]]>f289aaaf-94d4-4f2b-9efc-dfeb10079026Thu, 24 Apr 2025 06:00:00 +070005:59falsefullEnrich Your Future 30: The Hidden Cost of Chasing Dividend StocksIn this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 30: The Economically Irrational Investor Preference for Dividend-Paying Stocks.

                                         LEARNING: The dividend policy is irrelevant to stock returns.

                                          

                                         “Stock prices tend to rise in the month before they pay the dividend, because dumb retail investors overvalue dividends, and then they tend to revert back after the dividend gets paid.”

                                         Larry Swedroe

                                          

                                         In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                         Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 30: The Economically Irrational Investor Preference for Dividend-Paying Stocks.

                                         Chapter 30: The Economically Irrational Investor Preference for Dividend-Paying Stocks

                                         In this chapter, Larry discusses why many investors prefer cash dividends, especially those using a cash flow approach to spending.

                                         Larry explains that experts have established that dividend policy should be irrelevant to stock returns, which is supported by historical evidence. Stocks with the same exposure to common factors (such as size, value, momentum, and profitability/quality) have had the same returns, whether they pay dividends or not. Despite theory and evidence, many investors express a preference for dividend-paying stocks.

                                         The fallacy of the free dividend

                                         As Larry explains, investors tend to assume that dividends offer a safe hedge against the large price fluctuations that stocks experience. However, this assumption ignores that the dividend is offset by the fall in the stock price—the fallacy of the free dividend is a common misconception in the investment world.

                                         Larry adds that stocks with the same “loading,” or exposure, to the four factors (size, value, momentum, and profitability/quality) have the same expected return regardless of their dividend policy. This has important implications because about 60% of US and 40% of international stocks do not pay dividends.

                                         Thus, any screen that includes dividends results in far less diversified portfolios than they could be if they had not included dividends in the portfolio design. Less diversified portfolios are less efficient because they have a higher potential dispersion of returns without any compensation in the form of higher expected returns.

                                         Taxes matter

                                         Larry notes that what is particularly puzzling about the preference for dividends is that taxable investors should favor the self-dividend (by selling shares) if cash flow is required. Taxes play a crucial role in investment decisions, and understanding their implications is essential for making informed choices.

                                         Even in tax-advantaged accounts, investors who diversify globally (the prudent strategy) should prefer capital gains because the foreign tax credits associated with dividends have no value in tax-advantaged accounts.

                                         Why do investors still prefer dividends?

                                         Hersh Shefrin and Meir Statman, two leaders in behavioral finance, attempted to explain the behavioral anomaly of a preference for cash dividends. The first explanation is that, in terms of their ability to control spending, investors may recognize that they have problems with the inability to delay gratification.

                                         To address this problem, they adopt a cash flow approach to spending—they limit their spending to only the interest and dividends from their investment portfolio. In other words, the investor desires to defer spending but knows he doesn’t have the will, so he creates a situation that limits his opportunities and, thus, reduces the temptations.

                                         The prospect theory

                                         The second explanation of why investors prefer dividends is based on “prospect theory.” Prospect theory states that people value gains and losses differently. As such, they will base decisions on perceived gains rather than losses.

                                         Thus, if a person was given two equal choices, one expressed in terms of possible gains and the other in potential losses, they would choose the former. Because taking dividends doesn’t involve selling stock, it’s preferred to a total return approach, which may require self-created dividends through sales. The reason is that sales might affect the realization of losses, which are too painful for people to accept (they exhibit loss aversion).

                                         Further reading

                                         1. Merton Miller and Franco Modigliani, “Dividend Policy, Growth, and the Valuation of Shares,” Journal of Business (October 1961).
                                         2. Hersh Shefrin and Meir Statman, “Explaining Investor Preference for Cash Dividends,” Journal of Financial Economics (June 1984).

                                         
                                         

                                         Did you miss out on the previous chapters? Check them out:

                                         Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                                         • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                         • Enrich Your Future 02: How Markets Set Prices
                                         • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                         • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                         • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                         • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                         • Enrich Your Future 07: The Value of Security Analysis
                                         • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                         • Enrich Your Future 09: The Fed Model and the Money Illusion

                                         
                                         

                                         Part II: Strategic Portfolio Decisions

                                         • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                         • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                                         • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                                         • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                                         • Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
                                         • Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 30: The Economically Irrational Investor Preference for Dividend-Paying Stocks.

                                           LEARNING: The dividend policy is irrelevant to stock returns.

                                            

                                           “Stock prices tend to rise in the month before they pay the dividend, because dumb retail investors overvalue dividends, and then they tend to revert back after the dividend gets paid.”

                                           Larry Swedroe

                                            

                                           In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                           Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 30: The Economically Irrational Investor Preference for Dividend-Paying Stocks.

                                           Chapter 30: The Economically Irrational Investor Preference for Dividend-Paying Stocks

                                           In this chapter, Larry discusses why many investors prefer cash dividends, especially those using a cash flow approach to spending.

                                           Larry explains that experts have established that dividend policy should be irrelevant to stock returns, which is supported by historical evidence. Stocks with the same exposure to common factors (such as size, value, momentum, and profitability/quality) have had the same returns, whether they pay dividends or not. Despite theory and evidence, many investors express a preference for dividend-paying stocks.

                                           The fallacy of the free dividend

                                           As Larry explains, investors tend to assume that dividends offer a safe hedge against the large price fluctuations that stocks experience. However, this assumption ignores that the dividend is offset by the fall in the stock price—the fallacy of the free dividend is a common misconception in the investment world.

                                           Larry adds that stocks with the same “loading,” or exposure, to the four factors (size, value, momentum, and profitability/quality) have the same expected return regardless of their dividend policy. This has important implications because about 60% of US and 40% of international stocks do not pay dividends.

                                           Thus, any screen that includes dividends results in far less diversified portfolios than they could be if they had not included dividends in the portfolio design. Less diversified portfolios are less efficient because they have a higher potential dispersion of returns without any compensation in the form of higher expected returns.

                                           Taxes matter

                                           Larry notes that what is particularly puzzling about the preference for dividends is that taxable investors should favor the self-dividend (by selling shares) if cash flow is required. Taxes play a crucial role in investment decisions, and understanding their implications is essential for making informed choices.

                                           Even in tax-advantaged accounts, investors who diversify globally (the prudent strategy) should prefer capital gains because the foreign tax credits associated with dividends have no value in tax-advantaged accounts.

                                           Why do investors still prefer dividends?

                                           Hersh Shefrin and Meir Statman, two leaders in behavioral finance, attempted to explain the behavioral anomaly of a preference for cash dividends. The first explanation is that, in terms of their ability to control spending, investors may recognize that they have problems with the inability to delay gratification.

                                           To address this problem, they adopt a cash flow approach to spending—they limit their spending to only the interest and dividends from their investment portfolio. In other words, the investor desires to defer spending but knows he doesn’t have the will, so he creates a situation that limits his opportunities and, thus, reduces the temptations.

                                           The prospect theory

                                           The second explanation of why investors prefer dividends is based on “prospect theory.” Prospect theory states that people value gains and losses differently. As such, they will base decisions on perceived gains rather than losses.

                                           Thus, if a person was given two equal choices, one expressed in terms of possible gains and the other in potential losses, they would choose the former. Because taking dividends doesn’t involve selling stock, it’s preferred to a total return approach, which may require self-created dividends through sales. The reason is that sales might affect the realization of losses, which are too painful for people to accept (they exhibit loss aversion).

                                           Further reading

                                           1. Merton Miller and Franco Modigliani, “Dividend Policy, Growth, and the Valuation of Shares,” Journal of Business (October 1961).
                                           2. Hersh Shefrin and Meir Statman, “Explaining Investor Preference for Cash Dividends,” Journal of Financial Economics (June 1984).
                                           
                                           

                                           Did you miss out on the previous chapters? Check them out:

                                           Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                                           • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                           • Enrich Your Future 02: How Markets Set Prices
                                           • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                           • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                           • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                           • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                           • Enrich Your Future 07: The Value of Security Analysis
                                           • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                           • Enrich Your Future 09: The Fed Model and the Money Illusion
                                           
                                           

                                           Part II: Strategic Portfolio Decisions

                                           • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                           • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                                           • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                                           • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                                           • Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
                                           • Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
                                           • Enrich Your Future 16: The Estimated Return Is Not Inevitable
                                           • Enrich Your Future 17: Take a Portfolio Approach to Your Investments
                                           • Enrich Your Future 18: Build a Portfolio That Can Withstand the Black Swans
                                           • Enrich Your Future 19: The Gold Illusion: Why Investing in Gold May Not Be Safe
                                           • Enrich Your Future 20: Passive Investing Is the Key to Prudent Wealth Management
                                           
                                           

                                           Part III: Behavioral Finance: We Have Met the Enemy and He Is Us

                                           • Enrich Your Future 21: Think You Can Beat the Market? Think Again
                                           • Enrich Your Future 22: Some Risks Are Not Worth Taking
                                           • Enrich Your Future 23: Seeing Through the Frame: Making Better Investment Decisions
                                           • Enrich Your Future 24: Why Smart People Do Dumb Things
                                           • Enrich Your Future 25: Stock Crashes Happen—Be Prepared
                                           • Enrich Your Future 26: Should You Invest Now or Spread It Out?
                                           • Enrich Your Future 27: Pascal’s Wager: Betting on Consequences Over Probabilities
                                           • Enrich Your Future 28 & 29: How to Outsmart Your Investing Biases
                                           
                                           

                                           About Larry Swedroe

                                           Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                           Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                           Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                           Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                            

                                           [spp-transcript]

                                            

                                           Connect with Larry Swedroe

                                           • LinkedIn
                                           • X
                                           • Website
                                           • Books
                                           
                                           

                                           Andrew’s books

                                           • How to Start Building Your Wealth Investing in the Stock Market
                                           • My Worst Investment Ever
                                           • 9 Valuation Mistakes and How to Avoid Them
                                           • Transform Your Business with Dr.Deming’s 14 Points
                                           
                                           

                                           Andrew’s online programs

                                           • Valuation Master Class
                                           • The Become a Better Investor Community
                                           • How to Start Building Your Wealth Investing in the Stock Market
                                           • Finance Made Ridiculously Simple
                                           • FVMR Investing: Quantamental Investing Across the World
                                           • Become a Great Presenter and Increase Your Influence
                                           • Transform Your Business with Dr. Deming’s 14 Points
                                           • Achieve Your Goals
                                           
                                           

                                           Connect with Andrew Stotz:

                                           • astotz.com
                                           • LinkedIn
                                           • Facebook
                                           • Instagram
                                           • Threads
                                           • X
                                           • YouTube
                                           • My Worst Investment Ever Podcast
                                           
                                           ]]>f950b07c-69ff-4db6-94de-76f67a0ba307Tue, 22 Apr 2025 06:00:00 +070025:01falsefullAndrew Stotz - I, Coffee: The Capitalist Miracle Behind Your Morning CupI, Coffee: The Capitalist Miracle Behind Your Morning Cup

                                         I am the cup of coffee warming your hands right now. A simple drink with a story no government could brew. My journey from a cherry on a tree to your morning ritual is a testament to freedom, ambition, and human ingenuity.

                                         I exist not because of a single plan by a government or business but because of countless decisions, risks, and exchanges made by individuals and companies.

                                         I am the child of voluntary trade, fierce competition, and the pursuit of profit, all working without a master plan. These forces grow me, move me, roast me, and deliver me to you.

                                         No single person could make me from start to finish, yet billions of cups like me are made every day.

                                         Private ownership gives rise to ambition

                                         I began as a cherry on a small farm in Costa Rica, grown by Manuel. Because he owns the land, he has reason to think long-term, studying prices, testing new methods, and planting varieties that take years to bear fruit. He’s not just farming for today; he’s betting on tomorrow. That’s what capitalism rewards: patience, planning, and the courage to take risks.

                                         Manuel’s commitment to tomorrow propels his green coffee bean across borders, where profit and competition transform local harvests into global goods.

                                         Profit connects personal effort to progress

                                         Once picked, my journey begins from fruit to finished drink. I pass through the hands of workers and businesses, each driven by their own needs. No one is in it for love. They’re in it for a paycheck. And that’s precisely the point. The drive to earn a living keeps the whole system in motion.

                                         Profit isn’t greed; it’s survival. Prices tell people what is scarce and wanted; markets change direction overnight. To survive, you adapt. To win, you innovate. That’s how competition works; it’s the quiet engine pushing new ideas forward. In capitalism, you don’t get to stand still. Evolve, and you’ll thrive. Stay stuck, and you’ll disappear.

                                         Trade works without central control

                                         As I leave the processing facility, my journey goes global. I cross oceans and borders. The people along the way live in different countries, speak different languages, follow different beliefs, and may even hate each other, yet they still cooperate. Peace is the quiet miracle of capitalism. The market’s invisible hand turns individual pursuits into shared progress.

                                         Each region plays to its strengths. Manuel grows coffee in Costa Rica. Luigi builds espresso machines in Italy. They’ve never met, but through trade, they both win. By trading rather than trying to do everything alone, both end up better off.

                                         Consumers determine what survives

                                         At the roasting factory, experts dial in flavor. The process begins with precise heat control, powered by machines and fuels from distant places. Roasters adjust their methods to meet customer expectations because you, the consumer, decide who wins.

                                         I don’t exist by chance. Every choice, a dark roast or a decaf, oat milk or cream, sends a signal. You’re the boss here. I’m shaped by what you sip. That’s why quality matters. Even minor errors lead to waste, lost sales, and the risk of being replaced by someone who gets it right.

                                         Every job contributes to final value

                                         Each role, from warehouse staff to maintenance teams, shapes the outcome. The technician who calibrates the roaster’s heat, the quality inspector who catches defects, and the logistics coordinator who ensures delivery affect how I taste in the end.

                                         In this system, no task is too small. A green coffee warehouse worker in Indonesia who rotates inventory properly helps ensure I arrive fresh in Denver. One mistake and a competitor gets the next order.

                                         Specialization turns effort into excellence

                                         At the café, baristas add their expertise, turning a roasted bean into your favorite cup: a bold black coffee, a tangy espresso, or a smooth latte. They steam, clean, pour, and seal. And they know: just one overheated shot or cracked lid, and everything I’ve been through goes to waste.

                                         That’s the harsh reality of capitalism. Each choice leads towards profit or loss. Accountability isn’t imposed; it’s automatic.

                                         Competition enforces accountability

                                         Some argue that markets need heavy rules, but I’ve seen competition shape behavior better than any bureaucracy. The people who move me act responsibly not because they’re forced to, but because trust pays off. Break that trust, and the market makes you pay.

                                         Even sustainability depends on you. When you choose shade-grown beans or Rainforest Alliance-certified coffee, farms change. Your fair-trade purchases raise wages. Your demand for carbon-neutral shipping pushes the whole system forward. I’m not made greener by policy memos; I’m made greener by you. That’s capitalism.

                                         Voluntary exchange creates something greater

                                         So here I am, your coffee, warming your hands just as I began this story. I started as a simple cherry on a tree, and through countless individual decisions, I’ve become your morning ritual. No one commanded my journey from Costa Rica to your cup, yet I arrived through millions of voluntary exchanges.

                                         I’m not just a drink but living proof that capitalism, at its best, transforms strangers into partners and simple beans into something extraordinary.

                                         As you sip me slowly, remember: every drop represents a quiet miracle of human cooperation, brewed not by force but by freedom, the same freedom that will bring your cup tomorrow and every morning after.

                                         Essay by Andrew Stotz, loosely adapted from Leonard E. Read’s “I, Pencil”

                                         Andrew’s books

                                         • How to Start Building Your Wealth Investing in the Stock Market
                                         • My Worst Investment Ever
                                         • 9 Valuation Mistakes and How to Avoid Them
                                         • Transform Your Business with Dr.Deming’s 14 Points
                                         
                                         

                                         Andrew’s online programs

                                         • Valuation Master Class
                                         • The Become a Better Investor Community
                                         • How to Start Building Your Wealth Investing in the Stock Market
                                         • Finance Made Ridiculously Simple
                                         • FVMR Investing: Quantamental Investing Across the World
                                         • Become a Great Presenter and Increase Your Influence
                                         • Transform Your Business with Dr. Deming’s 14 Points
                                         • Achieve Your Goals
                                         
                                         

                                         Connect with Andrew Stotz:

                                         • astotz.com
                                         • LinkedIn
                                         • Facebook
                                         • Instagram
                                         • Threads
                                         • X
                                         • YouTube
                                         • My Worst Investment Ever Podcast
                                         
                                         ]]>I, Coffee: The Capitalist Miracle Behind Your Morning Cup

                             I am the cup of coffee warming your hands right now. A simple drink with a story no government could brew. My journey from a cherry on a tree to your morning ritual is a testament to freedom, ambition, and human ingenuity.

                             I exist not because of a single plan by a government or business but because of countless decisions, risks, and exchanges made by individuals and companies.

                             I am the child of voluntary trade, fierce competition, and the pursuit of profit, all working without a master plan. These forces grow me, move me, roast me, and deliver me to you.

                             No single person could make me from start to finish, yet billions of cups like me are made every day.

                             Private ownership gives rise to ambition

                             I began as a cherry on a small farm in Costa Rica, grown by Manuel. Because he owns the land, he has reason to think long-term, studying prices, testing new methods, and planting varieties that take years to bear fruit. He’s not just farming for today; he’s betting on tomorrow. That’s what capitalism rewards: patience, planning, and the courage to take risks.

                             Manuel’s commitment to tomorrow propels his green coffee bean across borders, where profit and competition transform local harvests into global goods.

                             Profit connects personal effort to progress

                             Once picked, my journey begins from fruit to finished drink. I pass through the hands of workers and businesses, each driven by their own needs. No one is in it for love. They’re in it for a paycheck. And that’s precisely the point. The drive to earn a living keeps the whole system in motion.

                             Profit isn’t greed; it’s survival. Prices tell people what is scarce and wanted; markets change direction overnight. To survive, you adapt. To win, you innovate. That’s how competition works; it’s the quiet engine pushing new ideas forward. In capitalism, you don’t get to stand still. Evolve, and you’ll thrive. Stay stuck, and you’ll disappear.

                             Trade works without central control

                             As I leave the processing facility, my journey goes global. I cross oceans and borders. The people along the way live in different countries, speak different languages, follow different beliefs, and may even hate each other, yet they still cooperate. Peace is the quiet miracle of capitalism. The market’s invisible hand turns individual pursuits into shared progress.

                             Each region plays to its strengths. Manuel grows coffee in Costa Rica. Luigi builds espresso machines in Italy. They’ve never met, but through trade, they both win. By trading rather than trying to do everything alone, both end up better off.

                             Consumers determine what survives

                             At the roasting factory, experts dial in flavor. The process begins with precise heat control, powered by machines and fuels from distant places. Roasters adjust their methods to meet customer expectations because you, the consumer, decide who wins.

                             I don’t exist by chance. Every choice, a dark roast or a decaf, oat milk or cream, sends a signal. You’re the boss here. I’m shaped by what you sip. That’s why quality matters. Even minor errors lead to waste, lost sales, and the risk of being replaced by someone who gets it right.

                             Every job contributes to final value

                             Each role, from warehouse staff to maintenance teams, shapes the outcome. The technician who calibrates the roaster’s heat, the quality inspector who catches defects, and the logistics coordinator who ensures delivery affect how I taste in the end.

                             In this system, no task is too small. A green coffee warehouse worker in Indonesia who rotates inventory properly helps ensure I arrive fresh in Denver. One mistake and a competitor gets the next order.

                             Specialization turns effort into excellence

                             At the café, baristas add their expertise, turning a roasted bean into your favorite cup: a bold black coffee, a tangy espresso, or a smooth latte. They steam, clean, pour, and seal. And they know: just one overheated shot or cracked lid, and everything I’ve been through goes to waste.

                             That’s the harsh reality of capitalism. Each choice leads towards profit or loss. Accountability isn’t imposed; it’s automatic.

                             Competition enforces accountability

                             Some argue that markets need heavy rules, but I’ve seen competition shape behavior better than any bureaucracy. The people who move me act responsibly not because they’re forced to, but because trust pays off. Break that trust, and the market makes you pay.

                             Even sustainability depends on you. When you choose shade-grown beans or Rainforest Alliance-certified coffee, farms change. Your fair-trade purchases raise wages. Your demand for carbon-neutral shipping pushes the whole system forward. I’m not made greener by policy memos; I’m made greener by you. That’s capitalism.

                             Voluntary exchange creates something greater

                             So here I am, your coffee, warming your hands just as I began this story. I started as a simple cherry on a tree, and through countless individual decisions, I’ve become your morning ritual. No one commanded my journey from Costa Rica to your cup, yet I arrived through millions of voluntary exchanges.

                             I’m not just a drink but living proof that capitalism, at its best, transforms strangers into partners and simple beans into something extraordinary.

                             As you sip me slowly, remember: every drop represents a quiet miracle of human cooperation, brewed not by force but by freedom, the same freedom that will bring your cup tomorrow and every morning after.

                             Essay by Andrew Stotz, loosely adapted from Leonard E. Read’s “I, Pencil”

                             Andrew’s books

                             • How to Start Building Your Wealth Investing in the Stock Market
                             • My Worst Investment Ever
                             • 9 Valuation Mistakes and How to Avoid Them
                             • Transform Your Business with Dr.Deming’s 14 Points
                             
                             

                             Andrew’s online programs

                             • Valuation Master Class
                             • The Become a Better Investor Community
                             • How to Start Building Your Wealth Investing in the Stock Market
                             • Finance Made Ridiculously Simple
                             • FVMR Investing: Quantamental Investing Across the World
                             • Become a Great Presenter and Increase Your Influence
                             • Transform Your Business with Dr. Deming’s 14 Points
                             • Achieve Your Goals
                             
                             

                             Connect with Andrew Stotz:

                             • astotz.com
                             • LinkedIn
                             • Facebook
                             • Instagram
                             • Threads
                             • X
                             • YouTube
                             • My Worst Investment Ever Podcast
                             
                             ]]>96e3ef6f-c4d7-42ec-bd1c-81adf10ae817Wed, 16 Apr 2025 06:00:00 +070007:56falsefullCollin Plume – Why You Should Make Your Own MistakesBIO: Collin Plume, a precious metals expert and serial entrepreneur, helps investors maximize returns with minimal risk.

                             STORY: Collin inherited some money from his grandmother at 18. When two of his college friends came to him with the idea of creating a TV show, but on the internet, he cut them a check that was way too much than what he should have. The business didn’t work.

                             LEARNING: If you’re going to make a mistake in something, make it yourself and learn from it.

                              

                             “If I’m going to make a mistake, I will make it myself. I will put my blood, sweat, and tears into it.”

                             Collin Plume

                              

                             Guest profile

                             Collin Plume, a precious metals expert and serial entrepreneur, helps investors maximize returns with minimal risk. Founder of Noble Gold Investments and My Digital Money, he champions alternative assets like metals, real estate, and crypto. He is a dedicated family man who prioritizes integrity and client success in navigating complex financial markets.

                             Worst investment ever

                             Collin inherited some money from his grandmother at 18. He did some traveling and a few other things with the money. Two of Collin’s college friends came to him with the idea of creating a TV show but on the internet. In theory, it made a lot of sense. They raised money, and Collin cut them a check that was way too much than what he should have.

                             Unfortunately, Collin didn’t fully engage with the idea beyond writing the check. He didn’t foresee the potential pitfalls. The business, however, didn’t pan out. Collin’s deepest regret in this investment was not actively participating in the business and learning from it. He lost money and the opportunity to grow as an entrepreneur.

                             Lessons learned

                             • If you’re going to make a mistake in something, make it yourself. Don’t give money to someone else to make a mistake on your behalf—they will learn from it, you won’t.
                             • Teach your kids how to make money from an early age.
                             
                             

                             Andrew’s takeaways

                             • Families should take it upon themselves to protect the next generation.
                             
                             

                             Actionable advice

                             If you get that opportunity, take it and learn from it, but know that if you invest, you’ll probably never see $1 come back to you. Also, you could jump on the bandwagon of a totally new and exciting idea, but there are some successful businesses out there that you can invest in.

                             Collin’s recommendations

                             Collin advises seeking out new mentors in different areas every year. Continuous learning and growth through mentorship is a powerful tool for personal development, and Collin himself has found it invaluable in his journey as an entrepreneur.

                             No.1 goal for the next 12 months

                             Collin’s number one goal for the next 12 months is to train some people to take over more of the day-to-day operations in two of his businesses. On a personal level, he wants to go on one of the big hiking trips he’s never been able to do.

                             Parting words

                              

                             “I love this show—everything about it. You’re a great guy to talk to. I appreciate you having me on; it’s been a pleasure to be with you.”

                             Collin Plume

                              

                             [spp-transcript]

                              

                             Connect with Collin Plume

                             • LinkedIn
                             • Instagram 
                             • X
                             • YouTube
                             • Book 
                             • Website
                             
                             

                             Andrew’s books

                             • How to Start Building Your Wealth Investing in the Stock Market
                             • My Worst Investment Ever
                             • 9 Valuation Mistakes and How to Avoid Them
                             • Transform Your Business with Dr.Deming’s 14 Points
                             
                             

                             Andrew’s online programs

                             • Valuation Master Class
                             • The Become a Better Investor Community
                             • How to Start Building Your Wealth Investing in the Stock Market
                             • Finance Made Ridiculously Simple
                             • FVMR Investing: Quantamental Investing Across the World
                             • Become a Great Presenter and Increase Your Influence
                             • Transform Your Business with Dr. Deming’s 14 Points
                             • Achieve Your Goals
                             
                             

                             Connect with Andrew Stotz:

                             • astotz.com
                             • LinkedIn
                             • Facebook
                             • Instagram
                             • Threads
                             • X
                             • YouTube
                             • My Worst Investment Ever Podcast
                             
                             ]]>BIO: Collin Plume, a precious metals expert and serial entrepreneur, helps investors maximize returns with minimal risk.

                             STORY: Collin inherited some money from his grandmother at 18. When two of his college friends came to him with the idea of creating a TV show, but on the internet, he cut them a check that was way too much than what he should have. The business didn’t work.

                             LEARNING: If you’re going to make a mistake in something, make it yourself and learn from it.

                              

                             “If I’m going to make a mistake, I will make it myself. I will put my blood, sweat, and tears into it.”

                             Collin Plume

                              

                             Guest profile

                             Collin Plume, a precious metals expert and serial entrepreneur, helps investors maximize returns with minimal risk. Founder of Noble Gold Investments and My Digital Money, he champions alternative assets like metals, real estate, and crypto. He is a dedicated family man who prioritizes integrity and client success in navigating complex financial markets.

                             Worst investment ever

                             Collin inherited some money from his grandmother at 18. He did some traveling and a few other things with the money. Two of Collin’s college friends came to him with the idea of creating a TV show but on the internet. In theory, it made a lot of sense. They raised money, and Collin cut them a check that was way too much than what he should have.

                             Unfortunately, Collin didn’t fully engage with the idea beyond writing the check. He didn’t foresee the potential pitfalls. The business, however, didn’t pan out. Collin’s deepest regret in this investment was not actively participating in the business and learning from it. He lost money and the opportunity to grow as an entrepreneur.

                             Lessons learned

                             • If you’re going to make a mistake in something, make it yourself. Don’t give money to someone else to make a mistake on your behalf—they will learn from it, you won’t.
                             • Teach your kids how to make money from an early age.
                             
                             

                             Andrew’s takeaways

                             • Families should take it upon themselves to protect the next generation.
                             
                             

                             Actionable advice

                             If you get that opportunity, take it and learn from it, but know that if you invest, you’ll probably never see $1 come back to you. Also, you could jump on the bandwagon of a totally new and exciting idea, but there are some successful businesses out there that you can invest in.

                             Collin’s recommendations

                             Collin advises seeking out new mentors in different areas every year. Continuous learning and growth through mentorship is a powerful tool for personal development, and Collin himself has found it invaluable in his journey as an entrepreneur.

                             No.1 goal for the next 12 months

                             Collin’s number one goal for the next 12 months is to train some people to take over more of the day-to-day operations in two of his businesses. On a personal level, he wants to go on one of the big hiking trips he’s never been able to do.

                             Parting words

                              

                             “I love this show—everything about it. You’re a great guy to talk to. I appreciate you having me on; it’s been a pleasure to be with you.”

                             Collin Plume

                              

                             [spp-transcript]

                              

                             Connect with Collin Plume

                             • LinkedIn
                             • Instagram 
                             • X
                             • YouTube
                             • Book 
                             • Website
                             
                             

                             Andrew’s books

                             • How to Start Building Your Wealth Investing in the Stock Market
                             • My Worst Investment Ever
                             • 9 Valuation Mistakes and How to Avoid Them
                             • Transform Your Business with Dr.Deming’s 14 Points
                             
                             

                             Andrew’s online programs

                             • Valuation Master Class
                             • The Become a Better Investor Community
                             • How to Start Building Your Wealth Investing in the Stock Market
                             • Finance Made Ridiculously Simple
                             • FVMR Investing: Quantamental Investing Across the World
                             • Become a Great Presenter and Increase Your Influence
                             • Transform Your Business with Dr. Deming’s 14 Points
                             • Achieve Your Goals
                             
                             

                             Connect with Andrew Stotz:

                             • astotz.com
                             • LinkedIn
                             • Facebook
                             • Instagram
                             • Threads
                             • X
                             • YouTube
                             • My Worst Investment Ever Podcast
                             
                             ]]>bdb74bd1-1b97-48aa-aa9d-bdaf99d5557eTue, 15 Apr 2025 06:00:00 +070044:03falsefullEnrich Your Future 28 & 29: How to Outsmart Your Investing BiasesIn this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 28: Buy, Hold, or Sell and the Endowment Effect and Chapter 29: The Drivers of Investor Behavior.

                             LEARNING: Smart people are humble and able to admit when they have made a mistake.

                              

                             “As humans, we make all kinds of behavioral errors. Thus, it should not be surprising that we make them when investing. Smart people are, however, humble and able to admit when they have made a mistake.”

                             Larry Swedroe

                              

                             In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                             Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 28: Buy, Hold, or Sell and the Endowment Effect and Chapter 29: The Drivers of Investor Behavior.

                             Chapter 28: Buy, Hold, or Sell and the Endowment Effect

                             In this chapter, Larry discusses one of the more frequent risk management problems: holding or selling an asset and how the endowment effect affects this decision.

                             The endowment effect

                             Larry begins by empathetically explaining how the endowment effect, a common behavioral quirk, often causes individuals to make poor investment decisions. For example, it leads investors to hold onto assets they wouldn’t purchase if they didn’t already own them. Whether it’s because the assets don’t fit into their asset allocation plan or because they view them as overpriced, they’re no longer the best choice from a risk/reward perspective.

                             Larry shares the most common example of the endowment effect. People are often reluctant to sell stocks or mutual funds that they inherited or a deceased spouse purchased. Many people will usually say, “I can’t sell that stock; it was my grandfather’s favorite, and he’d owned it since 1952.” Or, “That stock has been in my family for generations.” Or, “My husband worked for that company for 40 years. I couldn’t possibly sell it.”

                             Another example of an investor subject to the endowment effect is stock accumulated through stock options or some type of profit-sharing/retirement plan.

                             How to avoid the endowment effect

                             Larry says you can avoid the endowment effect by asking: If I didn’t already own this asset, how much would I buy today as part of my overall investment plan? If the answer is, “I wouldn’t buy any,” or, “I would buy less than I currently hold,” you should sell. The rule applies whether the asset is a bottle of wine, a stock, a bond, or a mutual fund.

                             He adds that you should only own an investment if it fits into your overall asset allocation plan.

                             Chapter 29: The Drivers of Investor Behavior

                             In this chapter, Larry discusses how investors make errors simply because they are humans prone to behavioral mistakes. He reviews some of the more common ones to help you avoid making such mistakes.

                             Ego-driven investments

                             In this type of mistake, investors want more than returns from their investments.

                             For instance, some investors continue investing in hedge funds, despite their lousy performance, for the same reasons they buy a Rolex or carry a Gucci bag with an oversized logo—they are expressions of status, available only to the wealthy.

                             Such investment decisions are ego-driven, with demand fueled by the desire to be a “member of the club.”

                             The desire to be above-average

                             Overconfidence in our abilities is a very healthy attribute. It makes us feel good about ourselves, creating a positive framework for navigating life’s experiences. Unfortunately, being overconfident in our investment skills can lead to investment mistakes—and so does what seems to be the all-too-human desire to be above average.

                             Overconfidence is such a huge problem that it even causes people to delude themselves—the truth is so painful that the delusion allows them to continue to be overconfident. It leads to unrealistic optimism, causing investors to concentrate their portfolios on a handful of stocks rather than gain the benefits of diversification (the only free lunch in investing).

                             Framing the problem

                             According to Larry, many errors we make as human beings and investors result from how we frame problems. “Framing the problem” refers to the way we perceive and interpret a situation, which can significantly influence our decisions. If a situation is framed from a negative viewpoint, people tend to focus on that. On the other hand, if a problem is framed positively, the results are pretty different. Consider the following example from Jason Zweig’s Your Money & Your Brain:

                             • Pregnant women are more willing to agree to amniocentesis if told they face a 20% chance of having a Down syndrome child than if told there is an 80% chance they will have a normal baby.
                             
                             

                             Regarding investing, the so-called professionals are framed as having all the advantages. The average investor then believes they stand no chance against the “professionals” and invests in active funds.

                             However, Larry quotes various investment gurus and researchers who believe that investors without knowledge of the stocks they buy can earn market returns by investing in index funds. Since the average fund underperforms its benchmark index fund, and the average active investor underperforms the very funds in which they invest, the know-nothing index investor earns above-average returns by simply earning market returns.

                             Confirmation bias

                             Another major cause of investment errors is “confirmation bias,” the tendency for people to favor information that confirms their preconceptions or hypotheses regardless of whether the information is true while disregarding evidence that is contrary to them. As a result, people gather evidence, recall information selectively from memory, and interpret it in a biased way.

                             For instance, investors who believe they can pick winning stocks are regularly oblivious to their losing record and record wins as evidence confirming their stock-picking skills. However, they neglect to record losses as disconfirming evidence. Similarly, investors may ignore negative news about a company they are invested in, focusing only on positive information that supports their investment decision.

                             Be humble and admit your mistakes

                             In conclusion, Larry reiterates that we’re all human and prone to behavioral mistakes. However, he underscores the importance of humility in admitting when we’ve made a mistake. He encourages us to see learning from our errors as a cause for celebration, as it means we’ll be less wrong in the future. He reminds us that what sets us apart from fools is our ability to learn and not repeat our mistakes, expecting different outcomes.

                             Further reading

                             1. Meir Statman, “What Investors Really Want,” McGraw-Hill, 2010.
                             2. Jonathan Burton, “Investment Titans,” McGraw-Hill, 2000.
                             3. Jason Zweig, “Your Money and Your Brain,” Simon and Schuster, 2008.
                             4. Peter Lynch, “Is There Life After Babe Ruth,” Barron’s, April 2, 1990.
                             5. 1993 Berkshire Hathaway Annual Report.
                             6. Larry Swedroe and R.C. Balaban, “Investment Mistakes Even Smart People Make and How to Avoid Them,” McGraw-Hill, 2011.
                             
                             

                             Did you miss out on the previous chapters? Check them out:

                             Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                             • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                             • Enrich Your Future 02: How Markets Set...]]>In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 28: Buy, Hold, or Sell and the Endowment Effect and Chapter 29: The Drivers of Investor Behavior.

                               LEARNING: Smart people are humble and able to admit when they have made a mistake.

                                

                               “As humans, we make all kinds of behavioral errors. Thus, it should not be surprising that we make them when investing. Smart people are, however, humble and able to admit when they have made a mistake.”

                               Larry Swedroe

                                

                               In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                               Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 28: Buy, Hold, or Sell and the Endowment Effect and Chapter 29: The Drivers of Investor Behavior.

                               Chapter 28: Buy, Hold, or Sell and the Endowment Effect

                               In this chapter, Larry discusses one of the more frequent risk management problems: holding or selling an asset and how the endowment effect affects this decision.

                               The endowment effect

                               Larry begins by empathetically explaining how the endowment effect, a common behavioral quirk, often causes individuals to make poor investment decisions. For example, it leads investors to hold onto assets they wouldn’t purchase if they didn’t already own them. Whether it’s because the assets don’t fit into their asset allocation plan or because they view them as overpriced, they’re no longer the best choice from a risk/reward perspective.

                               Larry shares the most common example of the endowment effect. People are often reluctant to sell stocks or mutual funds that they inherited or a deceased spouse purchased. Many people will usually say, “I can’t sell that stock; it was my grandfather’s favorite, and he’d owned it since 1952.” Or, “That stock has been in my family for generations.” Or, “My husband worked for that company for 40 years. I couldn’t possibly sell it.”

                               Another example of an investor subject to the endowment effect is stock accumulated through stock options or some type of profit-sharing/retirement plan.

                               How to avoid the endowment effect

                               Larry says you can avoid the endowment effect by asking: If I didn’t already own this asset, how much would I buy today as part of my overall investment plan? If the answer is, “I wouldn’t buy any,” or, “I would buy less than I currently hold,” you should sell. The rule applies whether the asset is a bottle of wine, a stock, a bond, or a mutual fund.

                               He adds that you should only own an investment if it fits into your overall asset allocation plan.

                               Chapter 29: The Drivers of Investor Behavior

                               In this chapter, Larry discusses how investors make errors simply because they are humans prone to behavioral mistakes. He reviews some of the more common ones to help you avoid making such mistakes.

                               Ego-driven investments

                               In this type of mistake, investors want more than returns from their investments.

                               For instance, some investors continue investing in hedge funds, despite their lousy performance, for the same reasons they buy a Rolex or carry a Gucci bag with an oversized logo—they are expressions of status, available only to the wealthy.

                               Such investment decisions are ego-driven, with demand fueled by the desire to be a “member of the club.”

                               The desire to be above-average

                               Overconfidence in our abilities is a very healthy attribute. It makes us feel good about ourselves, creating a positive framework for navigating life’s experiences. Unfortunately, being overconfident in our investment skills can lead to investment mistakes—and so does what seems to be the all-too-human desire to be above average.

                               Overconfidence is such a huge problem that it even causes people to delude themselves—the truth is so painful that the delusion allows them to continue to be overconfident. It leads to unrealistic optimism, causing investors to concentrate their portfolios on a handful of stocks rather than gain the benefits of diversification (the only free lunch in investing).

                               Framing the problem

                               According to Larry, many errors we make as human beings and investors result from how we frame problems. “Framing the problem” refers to the way we perceive and interpret a situation, which can significantly influence our decisions. If a situation is framed from a negative viewpoint, people tend to focus on that. On the other hand, if a problem is framed positively, the results are pretty different. Consider the following example from Jason Zweig’s Your Money & Your Brain:

                               • Pregnant women are more willing to agree to amniocentesis if told they face a 20% chance of having a Down syndrome child than if told there is an 80% chance they will have a normal baby.
                               
                               

                               Regarding investing, the so-called professionals are framed as having all the advantages. The average investor then believes they stand no chance against the “professionals” and invests in active funds.

                               However, Larry quotes various investment gurus and researchers who believe that investors without knowledge of the stocks they buy can earn market returns by investing in index funds. Since the average fund underperforms its benchmark index fund, and the average active investor underperforms the very funds in which they invest, the know-nothing index investor earns above-average returns by simply earning market returns.

                               Confirmation bias

                               Another major cause of investment errors is “confirmation bias,” the tendency for people to favor information that confirms their preconceptions or hypotheses regardless of whether the information is true while disregarding evidence that is contrary to them. As a result, people gather evidence, recall information selectively from memory, and interpret it in a biased way.

                               For instance, investors who believe they can pick winning stocks are regularly oblivious to their losing record and record wins as evidence confirming their stock-picking skills. However, they neglect to record losses as disconfirming evidence. Similarly, investors may ignore negative news about a company they are invested in, focusing only on positive information that supports their investment decision.

                               Be humble and admit your mistakes

                               In conclusion, Larry reiterates that we’re all human and prone to behavioral mistakes. However, he underscores the importance of humility in admitting when we’ve made a mistake. He encourages us to see learning from our errors as a cause for celebration, as it means we’ll be less wrong in the future. He reminds us that what sets us apart from fools is our ability to learn and not repeat our mistakes, expecting different outcomes.

                               Further reading

                               1. Meir Statman, “What Investors Really Want,” McGraw-Hill, 2010.
                               2. Jonathan Burton, “Investment Titans,” McGraw-Hill, 2000.
                               3. Jason Zweig, “Your Money and Your Brain,” Simon and Schuster, 2008.
                               4. Peter Lynch, “Is There Life After Babe Ruth,” Barron’s, April 2, 1990.
                               5. 1993 Berkshire Hathaway Annual Report.
                               6. Larry Swedroe and R.C. Balaban, “Investment Mistakes Even Smart People Make and How to Avoid Them,” McGraw-Hill, 2011.
                               
                               

                               Did you miss out on the previous chapters? Check them out:

                               Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                               • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                               • Enrich Your Future 02: How Markets Set Prices
                               • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                               • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                               • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                               • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                               • Enrich Your Future 07: The Value of Security Analysis
                               • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                               • Enrich Your Future 09: The Fed Model and the Money Illusion
                               
                               

                               Part II: Strategic Portfolio Decisions

                               • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                               • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                               • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                               • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                               • Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
                               • Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
                               • Enrich Your Future 16: The Estimated Return Is Not Inevitable
                               • Enrich Your Future 17: Take a Portfolio Approach to Your Investments
                               • Enrich Your Future 18: Build a Portfolio That Can Withstand the Black Swans
                               • Enrich Your Future 19: The Gold Illusion: Why Investing in Gold May Not Be Safe
                               • Enrich Your Future 20: Passive Investing Is the Key to Prudent Wealth Management
                               
                               

                               Part III: Behavioral Finance: We Have Met the Enemy and He Is Us

                               • Enrich Your Future 21: Think You Can Beat the Market? Think Again
                               • Enrich Your Future 22: Some Risks Are Not Worth Taking
                               • Enrich Your Future 23: Seeing Through the Frame: Making Better Investment Decisions
                               • Enrich Your Future 24: Why Smart People Do Dumb Things
                               • Enrich Your Future 25: Stock Crashes Happen—Be Prepared
                               • Enrich Your Future 26: Should You Invest Now or Spread It Out?
                               • Enrich Your Future 27: Pascal’s Wager: Betting on Consequences Over Probabilities
                               
                               

                               About Larry Swedroe

                               Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                               Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                               Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                               Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                

                               [spp-transcript]

                                

                               Connect with Larry Swedroe

                               • LinkedIn
                               • X
                               • Website
                               • Books
                               
                               

                               Andrew’s books

                               • How to Start Building Your Wealth Investing in the Stock Market
                               • My Worst Investment Ever
                               • 9 Valuation Mistakes and How to Avoid Them
                               • Transform Your Business with Dr.Deming’s 14 Points
                               
                               

                               Andrew’s online programs

                               • Valuation Master Class
                               • The Become a Better Investor Community
                               • How to Start Building Your Wealth Investing in the Stock Market
                               • Finance Made Ridiculously Simple
                               • FVMR Investing: Quantamental Investing Across the World
                               • Become a Great Presenter and Increase Your Influence
                               • 87edd8f5-db5a-4dad-8227-df339518c5b7Tue, 08 Apr 2025 06:00:00 +070013:27falsefullStu Heinecke - How to Get a Meeting with AnyoneBIO: Stu Heinecke is the author of How to Get a Meeting with Anyone, named one of the top 64 sales books of all time and the #1 sales book ever written on prospecting.

                                 STORY: Stu discusses his updated book edition, which caused a worldwide stir when the first edition was released in 2016. He talks about how to get a meeting with anyone.

                                 LEARNING: Be audacious and try to get that meeting that seems impossible.

                                  

                                 “When trying to get meetings, we have to make human-to-human connections. We must be audacious and surprise people and have them just say, wow.”

                                 Stu Heinecke

                                  

                                 Guest profile

                                 Stu Heinecke is the author of How to Get a Meeting with Anyone, named one of the top 64 sales books of all time and the #1 sales book ever written on prospecting. A hall-of-fame-nominated marketer and Wall Street Journal cartoonist, he is known for oblique perspectives and utterly unique strategies for selling, entrepreneurship, explosive growth, and, of course, getting meetings.

                                 Worst investment ever

                                 In today’s episode, Stu, who previously appeared on the podcast on episode Ep503: Never Cling to One-to-One Leverage, discusses his updated book edition, which caused a stir worldwide when the first edition was released in 2016. Stu shares how his book has inspired a global community, including the founder of Reach Desk, who raised $48 million in funding, and many others who have found inspiration in his work.

                                 AI and B2B sales

                                 Stu highlights the transformative role of AI in B2B sales, a significant development that is miraculously changing the landscape. As AI becomes more prolific, Stu believes there will be a clamor for uniquely human things.

                                 He underscores the importance of human-to-human connections and creativity in making audacious and surprising efforts to get meetings in the new AI world, ensuring the audience is well-informed and prepared for the future.

                                 Creativity and overcoming self-doubt

                                 Getting people to meet you can be overwhelming, and self-doubt may creep in occasionally. Stu encourages people to make breaking through part of their character. He adds that having a sense of mischief and adventure is essential because if you can’t get a meeting, you can’t sell. Stu urges people to get as good as possible at getting meetings and reaching out to people that they think they would never be able to reach. Just be audacious and try.

                                 Stu also emphasizes the importance of involving assistants in outreach efforts and making them part of the process to extend your reach.

                                 No.1 goal for the next 12 months

                                 Stu’s number one goal for the next 12 months is to get into bodybuilder shape.

                                 Parting words

                                  

                                 “One of the best investments you can make is to get good at getting meetings with people that you might think are completely out of reach. Reach out, and you’ll see they aren’t out of reach.”

                                 Stu Heinecke

                                  

                                 Connect with Stu Heinecke

                                 • LinkedIn
                                 • Website
                                 • Books
                                 
                                 

                                 Andrew’s books

                                 • How to Start Building Your Wealth Investing in the Stock Market
                                 • My Worst Investment Ever
                                 • 9 Valuation Mistakes and How to Avoid Them
                                 • Transform Your Business with Dr.Deming’s 14 Points
                                 
                                 

                                 Andrew’s online programs

                                 • Valuation Master Class
                                 • The Become a Better Investor Community
                                 • How to Start Building Your Wealth Investing in the Stock Market
                                 • Finance Made Ridiculously Simple
                                 • FVMR Investing: Quantamental Investing Across the World
                                 • Become a Great Presenter and Increase Your Influence
                                 • Transform Your Business with Dr. Deming’s 14 Points
                                 • Achieve Your Goals
                                 
                                 

                                 Connect with Andrew Stotz:

                                 • astotz.com
                                 • LinkedIn
                                 • Facebook
                                 • Instagram
                                 • Threads
                                 • X
                                 • YouTube
                                 • My Worst Investment Ever Podcast
                                 
                                 ]]>BIO: Stu Heinecke is the author of How to Get a Meeting with Anyone, named one of the top 64 sales books of all time and the #1 sales book ever written on prospecting.

                                 STORY: Stu discusses his updated book edition, which caused a worldwide stir when the first edition was released in 2016. He talks about how to get a meeting with anyone.

                                 LEARNING: Be audacious and try to get that meeting that seems impossible.

                                  

                                 “When trying to get meetings, we have to make human-to-human connections. We must be audacious and surprise people and have them just say, wow.”

                                 Stu Heinecke

                                  

                                 Guest profile

                                 Stu Heinecke is the author of How to Get a Meeting with Anyone, named one of the top 64 sales books of all time and the #1 sales book ever written on prospecting. A hall-of-fame-nominated marketer and Wall Street Journal cartoonist, he is known for oblique perspectives and utterly unique strategies for selling, entrepreneurship, explosive growth, and, of course, getting meetings.

                                 Worst investment ever

                                 In today’s episode, Stu, who previously appeared on the podcast on episode Ep503: Never Cling to One-to-One Leverage, discusses his updated book edition, which caused a stir worldwide when the first edition was released in 2016. Stu shares how his book has inspired a global community, including the founder of Reach Desk, who raised $48 million in funding, and many others who have found inspiration in his work.

                                 AI and B2B sales

                                 Stu highlights the transformative role of AI in B2B sales, a significant development that is miraculously changing the landscape. As AI becomes more prolific, Stu believes there will be a clamor for uniquely human things.

                                 He underscores the importance of human-to-human connections and creativity in making audacious and surprising efforts to get meetings in the new AI world, ensuring the audience is well-informed and prepared for the future.

                                 Creativity and overcoming self-doubt

                                 Getting people to meet you can be overwhelming, and self-doubt may creep in occasionally. Stu encourages people to make breaking through part of their character. He adds that having a sense of mischief and adventure is essential because if you can’t get a meeting, you can’t sell. Stu urges people to get as good as possible at getting meetings and reaching out to people that they think they would never be able to reach. Just be audacious and try.

                                 Stu also emphasizes the importance of involving assistants in outreach efforts and making them part of the process to extend your reach.

                                 No.1 goal for the next 12 months

                                 Stu’s number one goal for the next 12 months is to get into bodybuilder shape.

                                 Parting words

                                  

                                 “One of the best investments you can make is to get good at getting meetings with people that you might think are completely out of reach. Reach out, and you’ll see they aren’t out of reach.”

                                 Stu Heinecke

                                  

                                 Connect with Stu Heinecke

                                 • LinkedIn
                                 • Website
                                 • Books
                                 
                                 

                                 Andrew’s books

                                 • How to Start Building Your Wealth Investing in the Stock Market
                                 • My Worst Investment Ever
                                 • 9 Valuation Mistakes and How to Avoid Them
                                 • Transform Your Business with Dr.Deming’s 14 Points
                                 
                                 

                                 Andrew’s online programs

                                 • Valuation Master Class
                                 • The Become a Better Investor Community
                                 • How to Start Building Your Wealth Investing in the Stock Market
                                 • Finance Made Ridiculously Simple
                                 • FVMR Investing: Quantamental Investing Across the World
                                 • Become a Great Presenter and Increase Your Influence
                                 • Transform Your Business with Dr. Deming’s 14 Points
                                 • Achieve Your Goals
                                 
                                 

                                 Connect with Andrew Stotz:

                                 • astotz.com
                                 • LinkedIn
                                 • Facebook
                                 • Instagram
                                 • Threads
                                 • X
                                 • YouTube
                                 • My Worst Investment Ever Podcast
                                 
                                 ]]>1e8f51e6-4209-426f-92fc-1dac666d44e1Tue, 01 Apr 2025 06:00:00 +070039:10falsefullEnrich Your Future 27: Pascal’s Wager: Betting on Consequences Over ProbabilitiesIn this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 27: Pascal’s Wager and the Making of Prudent Decisions.

                                 LEARNING: Use Pascal’s wager to avoid making devastating mistakes.

                                  

                                 “You have to think about the cost of being wrong versus giving up on that hope or the ability to brag about how you pick the best-performing stock. Pascal’s wager gives you the right way to think about the answer. And then, you get to enjoy your life much more.”

                                 Larry Swedroe

                                  

                                 In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                 Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 27: Pascal’s Wager and the Making of Prudent Decisions.

                                 Chapter 27: Pascal’s Wager and the Making of Prudent Decisions

                                 In this chapter, Larry discusses Pascal’s wager, a suggestion posed by the French philosopher Blaise Pascal that emphasizes the importance of considering the consequences of decisions rather than just the probability of outcomes.

                                 Pascal’s wager

                                 In Pascal’s wager, the philosopher asked how we should act when we cannot prove or disprove if God exists. To answer this question, the philosopher said: if a Supreme Being doesn’t exist, then all the devout have lost is the opportunity to fornicate, imbibe, and skip a lot of adult church services. But if God does exist, then the atheist roasts in hell for eternity.

                                 Pascal concluded that the consequences of your actions matter far more than whatever you think the probabilities of the outcomes might be.

                                 Using Pascal’s wager to make financial decisions

                                 Pascal’s wager empowers individuals to make informed financial decisions. It encourages us to carefully consider the consequences before accepting the risks involved in case we are wrong. This approach can be applied to a wide range of financial decisions, instilling confidence in our choices.

                                 Buying life insurance

                                 Imagine you’re an average 28-year-old. You got married a few years ago and have your first child. Now, you must decide whether you should have life insurance. If you buy the life insurance, you know with a very high degree of certainty for the next 40 years, you’re going to be paying away a premium to the life insurance company and foregoing their earnings that you could get by taking that money investing in the stock market and maybe get a seven to 10% per annum return.

                                 Yet, most people buy the insurance because of the consequences of their being wrong, and they happen to be unlucky enough to die, either through an accident or some disease that wasn’t forecasted for them. Then, their wives and children may live in poverty. And that’s just a consequence that’s not acceptable.

                                 Asset allocation

                                 In another example, Pascal discusses someone who has already achieved sufficient wealth to support a quality lifestyle. Should they focus on preserving capital by allocating a low amount to risky assets like equities or try to accumulate even more wealth by allocating a significant amount to risky assets?

                                 To decide on which side of Pascal’s wager this individual wants to be with their portfolio, Larry advises to consider this insight from author Nassim Nicholas Taleb: “One cannot judge a performance in any given field by the results but by the costs of the alternative (i.e., if history played out differently).

                                 Long-term care insurance

                                 Larry also examines how Pascal’s wager can help us decide whether to purchase long-term care insurance. According to Larry, say a couple, both 65 years old, has a portfolio that is highly likely to provide sufficient assets to maintain their desired lifestyle if neither ever needs long-term care. If one or both need long-term care for an extended period, the portfolio will likely be strained or depleted.

                                 If no insurance is needed, the costs of purchasing a long-term care policy increase the odds of running out of money by just 3% (from 94% to 91%). On the other hand, if long-term care is needed and no insurance is purchased, the odds of running out of money increase by 20%—the odds of success fall from 94% to 74%.

                                 That is almost seven times the 3% increase in the likelihood of failure caused by the purchase of insurance. It seems clear that the purchase of the insurance is a prudent decision.

                                 Purchasing TIPS or nominal bonds

                                 Another decision investors should use Pascal’s wager to make is whether to purchase TIPS or nominal bonds. According to Larry, if you hold long-term nominal bonds, you win if deflation shows up (or even if inflation is less than expected). You lose, however, if inflation is greater than expected because your portfolio might not provide sufficient income to maintain your desired lifestyle.

                                 On the other hand, with TIPS, you win either way. If inflation shows up, the return of your bonds keeps pace. Even with deflation, they do at least as well as in inflation because TIPS mature at par.

                                 The consequences of your decision should dominate the probability of outcomes, making TIPS the prudent choice in most cases.

                                 Let Pascal whisper in your ear

                                 In conclusion, Larry encourages investors to use Pascal’s wager to avoid making devastating mistakes that are sometimes impossible to recover from.

                                 Further reading

                                 1. Jonathan Clements, “The Little Book of Main Street Money,” Wiley, 2009.
                                 2. Nassim Nicholas Taleb, “Fooled by Randomness,” W. W. Norton & Company, 2001.
                                 
                                 

                                 Did you miss out on the previous chapters? Check them out:

                                 Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                                 • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                 • Enrich Your Future 02: How Markets Set Prices
                                 • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                 • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                 • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                 • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                 • Enrich Your Future 07: The Value of Security Analysis
                                 • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                 • Enrich Your Future 09: The Fed Model and the Money Illusion
                                 
                                 

                                 Part II: Strategic Portfolio Decisions

                                 • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                 • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                                 • In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 27: Pascal’s Wager and the Making of Prudent Decisions.

                                   LEARNING: Use Pascal’s wager to avoid making devastating mistakes.

                                    

                                   “You have to think about the cost of being wrong versus giving up on that hope or the ability to brag about how you pick the best-performing stock. Pascal’s wager gives you the right way to think about the answer. And then, you get to enjoy your life much more.”

                                   Larry Swedroe

                                    

                                   In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                   Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 27: Pascal’s Wager and the Making of Prudent Decisions.

                                   Chapter 27: Pascal’s Wager and the Making of Prudent Decisions

                                   In this chapter, Larry discusses Pascal’s wager, a suggestion posed by the French philosopher Blaise Pascal that emphasizes the importance of considering the consequences of decisions rather than just the probability of outcomes.

                                   Pascal’s wager

                                   In Pascal’s wager, the philosopher asked how we should act when we cannot prove or disprove if God exists. To answer this question, the philosopher said: if a Supreme Being doesn’t exist, then all the devout have lost is the opportunity to fornicate, imbibe, and skip a lot of adult church services. But if God does exist, then the atheist roasts in hell for eternity.

                                   Pascal concluded that the consequences of your actions matter far more than whatever you think the probabilities of the outcomes might be.

                                   Using Pascal’s wager to make financial decisions

                                   Pascal’s wager empowers individuals to make informed financial decisions. It encourages us to carefully consider the consequences before accepting the risks involved in case we are wrong. This approach can be applied to a wide range of financial decisions, instilling confidence in our choices.

                                   Buying life insurance

                                   Imagine you’re an average 28-year-old. You got married a few years ago and have your first child. Now, you must decide whether you should have life insurance. If you buy the life insurance, you know with a very high degree of certainty for the next 40 years, you’re going to be paying away a premium to the life insurance company and foregoing their earnings that you could get by taking that money investing in the stock market and maybe get a seven to 10% per annum return.

                                   Yet, most people buy the insurance because of the consequences of their being wrong, and they happen to be unlucky enough to die, either through an accident or some disease that wasn’t forecasted for them. Then, their wives and children may live in poverty. And that’s just a consequence that’s not acceptable.

                                   Asset allocation

                                   In another example, Pascal discusses someone who has already achieved sufficient wealth to support a quality lifestyle. Should they focus on preserving capital by allocating a low amount to risky assets like equities or try to accumulate even more wealth by allocating a significant amount to risky assets?

                                   To decide on which side of Pascal’s wager this individual wants to be with their portfolio, Larry advises to consider this insight from author Nassim Nicholas Taleb: “One cannot judge a performance in any given field by the results but by the costs of the alternative (i.e., if history played out differently).

                                   Long-term care insurance

                                   Larry also examines how Pascal’s wager can help us decide whether to purchase long-term care insurance. According to Larry, say a couple, both 65 years old, has a portfolio that is highly likely to provide sufficient assets to maintain their desired lifestyle if neither ever needs long-term care. If one or both need long-term care for an extended period, the portfolio will likely be strained or depleted.

                                   If no insurance is needed, the costs of purchasing a long-term care policy increase the odds of running out of money by just 3% (from 94% to 91%). On the other hand, if long-term care is needed and no insurance is purchased, the odds of running out of money increase by 20%—the odds of success fall from 94% to 74%.

                                   That is almost seven times the 3% increase in the likelihood of failure caused by the purchase of insurance. It seems clear that the purchase of the insurance is a prudent decision.

                                   Purchasing TIPS or nominal bonds

                                   Another decision investors should use Pascal’s wager to make is whether to purchase TIPS or nominal bonds. According to Larry, if you hold long-term nominal bonds, you win if deflation shows up (or even if inflation is less than expected). You lose, however, if inflation is greater than expected because your portfolio might not provide sufficient income to maintain your desired lifestyle.

                                   On the other hand, with TIPS, you win either way. If inflation shows up, the return of your bonds keeps pace. Even with deflation, they do at least as well as in inflation because TIPS mature at par.

                                   The consequences of your decision should dominate the probability of outcomes, making TIPS the prudent choice in most cases.

                                   Let Pascal whisper in your ear

                                   In conclusion, Larry encourages investors to use Pascal’s wager to avoid making devastating mistakes that are sometimes impossible to recover from.

                                   Further reading

                                   1. Jonathan Clements, “The Little Book of Main Street Money,” Wiley, 2009.
                                   2. Nassim Nicholas Taleb, “Fooled by Randomness,” W. W. Norton & Company, 2001.
                                   
                                   

                                   Did you miss out on the previous chapters? Check them out:

                                   Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                                   • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                   • Enrich Your Future 02: How Markets Set Prices
                                   • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                   • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                   • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                   • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                   • Enrich Your Future 07: The Value of Security Analysis
                                   • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                   • Enrich Your Future 09: The Fed Model and the Money Illusion
                                   
                                   

                                   Part II: Strategic Portfolio Decisions

                                   • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                   • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                                   • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                                   • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                                   • Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
                                   • Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
                                   • Enrich Your Future 16: The Estimated Return Is Not Inevitable
                                   • Enrich Your Future 17: Take a Portfolio Approach to Your Investments
                                   • Enrich Your Future 18: Build a Portfolio That Can Withstand the Black Swans
                                   • Enrich Your Future 19: The Gold Illusion: Why Investing in Gold May Not Be Safe
                                   • Enrich Your Future 20: Passive Investing Is the Key to Prudent Wealth Management
                                   
                                   

                                   Part III: Behavioral Finance: We Have Met the Enemy and He Is Us

                                   • Enrich Your Future 21: Think You Can Beat the Market? Think Again
                                   • Enrich Your Future 22: Some Risks Are Not Worth Taking
                                   • Enrich Your Future 23: Seeing Through the Frame: Making Better Investment Decisions
                                   • Enrich Your Future 24: Why Smart People Do Dumb Things
                                   • Enrich Your Future 25: Stock Crashes Happen—Be Prepared
                                   • Enrich Your Future 26: Should You Invest Now or Spread It Out?
                                   
                                   

                                   About Larry Swedroe

                                   Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                   Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                   Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                   Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                    

                                   [spp-transcript]

                                    

                                   Connect with Larry Swedroe

                                   • LinkedIn
                                   • X
                                   • Website
                                   • Books
                                   
                                   

                                   Andrew’s books

                                   • How to Start Building Your Wealth Investing in the Stock Market
                                   • My Worst Investment Ever
                                   • 9 Valuation Mistakes and How to Avoid Them
                                   • Transform Your Business with Dr.Deming’s 14 Points
                                   
                                   

                                   Andrew’s online programs

                                   • Valuation Master Class
                                   • The Become a Better Investor Community
                                   • How to Start Building Your Wealth Investing in the Stock Market
                                   • Finance Made Ridiculously Simple
                                   • FVMR Investing: Quantamental Investing Across the World
                                   • Become a Great Presenter and Increase Your Influence
                                   • Transform Your Business with Dr. Deming’s 14 Points
                                   • Achieve Your Goals
                                   
                                   

                                   Connect with Andrew Stotz:

                                   • astotz.com
                                   • LinkedIn
                                   • Facebook
                                   • Instagram
                                   • Threads
                                   • X
                                   • YouTube
                                   • My Worst Investment Ever Podcast
                                   
                                   ]]>5b9b3f63-e76e-47e1-b0e8-f0b309d42deeTue, 25 Mar 2025 06:00:00 +070048:19falsefullWes Schaeffer – Future-Proofing Your Business: Trust, Strategy, and AgilityBIO: Wes Schaeffer is The Business Fixer®. He sees the message you want to convey but can’t find the words and gives them to you because if you don’t toot your own horn, there is no music.

                                   STORY: Wes discusses the evolving landscape of business and marketing, emphasizing the importance of human connection, trust, and information.

                                   LEARNING: Future-proof your business with trust, strategy, and agility.

                                    

                                   “It is time to spring clean your business. Get light, get lean, get focused, and build a legacy.”

                                   Wes Schaeffer

                                    

                                   Guest profile

                                   Wes Schaeffer is The Business Fixer®. He sees the message you want to convey but can’t find the words and gives them to you because if you don’t toot your own horn, there is no music. He’s a brown belt in Brazilian Jiu-Jitsu and the president of his HOA, so mow your lawn and pay attention to what this AF veteran, father of 7, and grandfather of three has to say. He’s written a couple of books, spoken around the world, published over 700 podcasts, and was once duct-taped to a bar in Korea.

                                   Join his free 12 Weeks to Peak program designed to help individuals and teams build a life cadence and achieve their goals.

                                   Worst investment ever

                                   In today’s episode, Wes, who previously appeared on the podcast on episode Ep280: Do Your Research and Trust Your Gut, discusses the evolving landscape of business and marketing, emphasizing the importance of human connection, trust, and information.

                                   Effects of technology on marketing

                                   Wes starts the discussion by noting how the salesperson’s role has evolved since the internet came around. Before the internet, he says, salespeople were the keepers of the knowledge. If you wanted to buy a car, you had to go down to the dealership. Now you have CarFax and online shopping in comparison, and you can compare models and negotiate before you get there. People freely share information online, so salespeople are no longer the keeper of knowledge.

                                   Despite the abundance of knowledge, buyers often find themselves in a state of confusion. In the past, this confusion stemmed from a lack of information. However, in today’s digital age, the problem has shifted to an overwhelming amount of information.

                                   This is where the salesperson’s role becomes crucial. As a salesperson, you have the opportunity to step in as a trusted advisor. Your role is to help your customers navigate the sea of information available online, assuage their fears, and instill in them the confidence that they are making the right decision.

                                   The role of trust and information in marketing

                                   Andrew and Wes delve into the significance of trust in marketing, with Wes underlining that trust is the cornerstone of purchasing decisions. He points out that despite the advancements in technology, people still crave individualized treatment.

                                   As a salesperson, it’s crucial to ask yourself: What am I doing to connect with the human being on the other side of the screen? This connection, built on trust, is what reassures customers and gives them the confidence to make a purchase.

                                   Wes reminds salespersons that customers don’t want to be treated like numbers, so they should be consistent and congruent in their approach to marketing and spend enough time building trust.

                                   Adapting to market changes and future-proofing businesses

                                   Wes and Andrew discuss the impact of global competition, particularly from China, on family businesses. They explore the idea of repositioning companies from low-cost leaders to higher-value-added brands, emphasizing the need for differentiation and strategic planning. Wes suggests leveraging current political and technological changes to improve business efficiency and adapt to new market realities.

                                   They also discuss the importance of businesses being nimble and responsive to market changes, with Wes highlighting the need for businesses to streamline and focus on their core strengths. This proactive approach ensures that businesses are not just surviving but thriving in the face of market shifts.

                                   Building a life cadence and personal development

                                   Wes introduces his program, “12 Weeks to Peak,” which helps individuals create a life cadence by scheduling time for self-improvement, relaxation, and other essential activities. This program has been proven to enhance productivity, reduce stress, and improve overall well-being.

                                   He shares insights from successful individuals like Warren Buffett and sports figures who maintain consistent routines and regimens.

                                   Wes emphasizes the importance of intentionality in life, suggesting that people should schedule time for activities that matter to them, such as calling friends and family.

                                   Andrew’s takeaways

                                   • You can build a happy life and great work.
                                   • If you’re sitting in a lousy job you’re unsatisfied with, leave.
                                   
                                   

                                   No.1 goal for the next 12 months

                                   Wes’s number one goal for the next 12 months is to ensure that his 12 Weeks to Peak program becomes recognizable. He aims to achieve this by helping more people create a life cadence that prioritizes self-improvement, relaxation, and other essential activities. By doing so, he hopes to make a significant impact on people’s lives and well-being.

                                   Parting words

                                    

                                   “Just take action. If this speaks to you, then do it. Don’t wait. You’ve got to become a good decision-maker, so listen to your little voice.”

                                   Wes Schaeffer

                                    

                                   [spp-transcript]

                                    

                                   Connect with Wes Schaeffer

                                   • LinkedIn
                                   • Facebook
                                   • Instagram 
                                   • X
                                   • Podcast
                                   • YouTube
                                   • Book 
                                   • Website
                                   
                                   

                                   Andrew’s books

                                   • How to Start Building Your Wealth Investing in the Stock Market
                                   • My Worst Investment Ever
                                   • 9 Valuation Mistakes and How to Avoid Them
                                   • Transform Your Business with Dr.Deming’s 14 Points
                                   
                                   

                                   Andrew’s online programs

                                   • Valuation Master Class
                                   • The Become a Better Investor Community
                                   • How to Start Building Your Wealth Investing in the Stock Market
                                   • Finance Made Ridiculously Simple
                                   • FVMR Investing: Quantamental Investing Across the World
                                   • Become a Great Presenter and Increase Your Influence
                                   • Transform Your Business with Dr. Deming’s 14 Points
                                   • Achieve Your Goals
                                   
                                   

                                   Connect with Andrew Stotz:

                                   • astotz.com
                                   • LinkedIn
                                   • Facebook
                                   • Instagram
                                   • “It is time to spring clean your business. Get light, get lean, get focused, and build a legacy.”

                                     Wes Schaeffer

                                      

                                     Guest profile

                                     Wes Schaeffer is The Business Fixer®. He sees the message you want to convey but can’t find the words and gives them to you because if you don’t toot your own horn, there is no music. He’s a brown belt in Brazilian Jiu-Jitsu and the president of his HOA, so mow your lawn and pay attention to what this AF veteran, father of 7, and grandfather of three has to say. He’s written a couple of books, spoken around the world, published over 700 podcasts, and was once duct-taped to a bar in Korea.

                                     Join his free 12 Weeks to Peak program designed to help individuals and teams build a life cadence and achieve their goals.

                                     Worst investment ever

                                     In today’s episode, Wes, who previously appeared on the podcast on episode Ep280: Do Your Research and Trust Your Gut, discusses the evolving landscape of business and marketing, emphasizing the importance of human connection, trust, and information.

                                     Effects of technology on marketing

                                     Wes starts the discussion by noting how the salesperson’s role has evolved since the internet came around. Before the internet, he says, salespeople were the keepers of the knowledge. If you wanted to buy a car, you had to go down to the dealership. Now you have CarFax and online shopping in comparison, and you can compare models and negotiate before you get there. People freely share information online, so salespeople are no longer the keeper of knowledge.

                                     Despite the abundance of knowledge, buyers often find themselves in a state of confusion. In the past, this confusion stemmed from a lack of information. However, in today’s digital age, the problem has shifted to an overwhelming amount of information.

                                     This is where the salesperson’s role becomes crucial. As a salesperson, you have the opportunity to step in as a trusted advisor. Your role is to help your customers navigate the sea of information available online, assuage their fears, and instill in them the confidence that they are making the right decision.

                                     The role of trust and information in marketing

                                     Andrew and Wes delve into the significance of trust in marketing, with Wes underlining that trust is the cornerstone of purchasing decisions. He points out that despite the advancements in technology, people still crave individualized treatment.

                                     As a salesperson, it’s crucial to ask yourself: What am I doing to connect with the human being on the other side of the screen? This connection, built on trust, is what reassures customers and gives them the confidence to make a purchase.

                                     Wes reminds salespersons that customers don’t want to be treated like numbers, so they should be consistent and congruent in their approach to marketing and spend enough time building trust.

                                     Adapting to market changes and future-proofing businesses

                                     Wes and Andrew discuss the impact of global competition, particularly from China, on family businesses. They explore the idea of repositioning companies from low-cost leaders to higher-value-added brands, emphasizing the need for differentiation and strategic planning. Wes suggests leveraging current political and technological changes to improve business efficiency and adapt to new market realities.

                                     They also discuss the importance of businesses being nimble and responsive to market changes, with Wes highlighting the need for businesses to streamline and focus on their core strengths. This proactive approach ensures that businesses are not just surviving but thriving in the face of market shifts.

                                     Building a life cadence and personal development

                                     Wes introduces his program, “12 Weeks to Peak,” which helps individuals create a life cadence by scheduling time for self-improvement, relaxation, and other essential activities. This program has been proven to enhance productivity, reduce stress, and improve overall well-being.

                                     He shares insights from successful individuals like Warren Buffett and sports figures who maintain consistent routines and regimens.

                                     Wes emphasizes the importance of intentionality in life, suggesting that people should schedule time for activities that matter to them, such as calling friends and family.

                                     Andrew’s takeaways

                                     • You can build a happy life and great work.
                                     • If you’re sitting in a lousy job you’re unsatisfied with, leave.
                                     
                                     

                                     No.1 goal for the next 12 months

                                     Wes’s number one goal for the next 12 months is to ensure that his 12 Weeks to Peak program becomes recognizable. He aims to achieve this by helping more people create a life cadence that prioritizes self-improvement, relaxation, and other essential activities. By doing so, he hopes to make a significant impact on people’s lives and well-being.

                                     Parting words

                                      

                                     “Just take action. If this speaks to you, then do it. Don’t wait. You’ve got to become a good decision-maker, so listen to your little voice.”

                                     Wes Schaeffer

                                      

                                     [spp-transcript]

                                      

                                     Connect with Wes Schaeffer

                                     • LinkedIn
                                     • Facebook
                                     • Instagram 
                                     • X
                                     • Podcast
                                     • YouTube
                                     • Book 
                                     • Website
                                     
                                     

                                     Andrew’s books

                                     • How to Start Building Your Wealth Investing in the Stock Market
                                     • My Worst Investment Ever
                                     • 9 Valuation Mistakes and How to Avoid Them
                                     • Transform Your Business with Dr.Deming’s 14 Points
                                     
                                     

                                     Andrew’s online programs

                                     • Valuation Master Class
                                     • The Become a Better Investor Community
                                     • How to Start Building Your Wealth Investing in the Stock Market
                                     • Finance Made Ridiculously Simple
                                     • FVMR Investing: Quantamental Investing Across the World
                                     • Become a Great Presenter and Increase Your Influence
                                     • Transform Your Business with Dr. Deming’s 14 Points
                                     • Achieve Your Goals
                                     
                                     

                                     Connect with Andrew Stotz:

                                     • astotz.com
                                     • LinkedIn
                                     • Facebook
                                     • Instagram
                                     • Threads
                                     • X
                                     • YouTube
                                     • My Worst Investment Ever Podcast
                                     
                                     ]]>411d5a26-dbb6-430a-9c45-d3d884bf3563Tue, 18 Mar 2025 06:00:00 +070048:19falsefullEnrich Your Future 26: Should You Invest Now or Spread It Out?In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 26: Dollar Cost Averaging.

                                     LEARNING: Invest all your money whenever you have it.

                                      

                                     “If you want to put the odds in your favor, which is the best we can do because we don’t have clear crystal balls, you should put all your money in whenever you have it to invest.”

                                     Larry Swedroe

                                      

                                     In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                     Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 26: Dollar Cost Averaging.

                                     Chapter 26: Dollar Cost Averaging

                                     In this chapter, Larry discusses why lump sum investing is better than dollar cost averaging.

                                     Should you invest your money all at once or spread it over time?

                                     According to Larry, the issue of Dollar Cost Averaging (DCA) typically arises when an investor receives a large lump sum of money and wonders if they should invest it all at once or spread it over time. The same problem arises when an investor panics and sells when confronted with a bear market, but then there are two questions: How does the investor decide when it is safe to reenter the market? And does she reinvest all at once or by DCA?

                                     Constantinides, a University of Chicago professor in the 1960s, studied this question. He demonstrated that DCA is an inferior strategy to lump sum investing. He termed it logically dumb as it makes no sense based on an expected return outcome. From a purely financial perspective, the logical answer is that if you have money to invest, you should always invest it whenever it’s available.

                                     Another paper by John Knight and Lewis Mandell compared DCA to a buy-and-hold strategy. Then, it analyzed the strategies across a series of investor profiles from risk-averse to aggressive. They concluded that DCA had no advantage over the two alternative investment strategies. Combined with their graphical analysis, their numerical trial and empirical evidence favored optimal rebalancing and buy-and-hold strategy over dollar cost averaging. Optimal rebalancing refers to the strategy of adjusting the proportions of assets in a portfolio to maintain a desired level of risk and return.

                                     Dollar cost averaging versus lump sum investing

                                     Knight and Mandell conducted a backtest to compare the performance of DCA versus LSI (lump sum investing). Backtesting is a simulation technique to evaluate the performance of a trading strategy using historical data. They backtested the two strategies between 1926 and 2010. Transaction costs were ignored (favoring DCA, which involves more trading). The authors assumed the initial portfolio was $1 million in cash, and the only investment available was the S&P 500 Index:

                                     • DCA Strategy: At the beginning of each month, one-twelfth of the initial portfolio was invested—the entire $1 million was invested by the end of the 12th month.
                                     • LSI Strategy: The $1 million portfolio was invested on day one.
                                     
                                     

                                     The study covered 781 rolling 20-year periods. The LSI strategy outperformed in 552 of them—over 70 percent of the time. In addition, in the roughly 30 percent of instances in which DCA outperformed, the magnitude of that outperformance was less than when LSI outperformed.

                                     Specifically, during the 552 20-year periods in which LSI did better than DCA, the average cumulative outperformance was $940,301 on the initial $1 million investment. During the 229 periods in which DCA did better than LSI, the average cumulative outperformance was $769,311.

                                     When dollar cost averaging is the better option

                                     Larry notes that there is an argument to be made in favor of DCA when it is the lesser of two evils—when an investor cannot “take the plunge” because they are sure that if they were to invest all at one time, that day would turn out to be the high not exceeded until the next millennium. That fear causes paralysis.

                                     If the market rises after they delay, how can they buy now at even higher prices? And if the market falls, how can they buy now because the bear market they feared has arrived? Once a decision has been made not to buy, how do you decide to buy?

                                     There is a solution to this dilemma that addresses both the logical and the emotional issues. Larry advises an investor to write a business plan for their lump sum. The plan should lay out a schedule with regularly planned investments. The plan might look like one of these alternatives:

                                     • Invest one-third of the investment immediately and invest the remainder one-third at a time during the next two months or the next two quarters.
                                     • Invest one-quarter today and spread the remainder equally over the next three quarters.
                                     • Invest one-sixth each month for six months or every other month.
                                     
                                     

                                     Adopt a glass is half-full perspective

                                     Having accomplished these objectives, Larry says, the investor should adopt a “glass is half full” perspective. If the market rises after the initial investment, they can feel good about how their portfolio has performed. She can also feel good about how smart she was not to delay investing.

                                     If, on the other hand, the market has fallen, the investor can feel good about the opportunity they now have to buy at lower prices and about being smart enough not to have put all of their money in at one time. Either way, the investor wins from a psychological perspective. This is an important consideration because emotions play an essential role in how individuals view outcomes.

                                     Lump sum investing is the way to go

                                     While DCA may sometimes work, Larry insists that putting all your money at once gives you the best odds of having the most money. If you want to put the odds in your favor, which is the best we can do because we don’t have clear crystal balls, he says, you should put all your money in whenever you have it to invest. Unfortunately, despite all the evidence, investors and advisors still recommend DCA.

                                     Further reading

                                     1. George Constantinides, “A Note On The SubOptimality Of Dollar Cost Averaging as an Investment Policy,” The Journal of Financial and Quantitative Analysis, June 1979.
                                     2. John Ross Knight and Lewis Mandell, “Nobody Gains From Dollar Cost Averaging: Analytical, Numerical and Empirical Results,” Financial Services Review, Volume 2, Issue 1 (1992-1993) pp. 1-71.
                                     3. Gerstein Fisher, “Does Dollar Cost Averaging Make Sense For Investors?” 2011.
                                     
                                     

                                     Did you miss out on the previous chapters? Check them out:

                                     Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                                     • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                     • Enrich Your Future 02: How Markets Set Prices
                                     • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                     • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                     • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                     • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                     • Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 26: Dollar Cost Averaging.

                                       LEARNING: Invest all your money whenever you have it.

                                        

                                       “If you want to put the odds in your favor, which is the best we can do because we don’t have clear crystal balls, you should put all your money in whenever you have it to invest.”

                                       Larry Swedroe

                                        

                                       In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                       Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 26: Dollar Cost Averaging.

                                       Chapter 26: Dollar Cost Averaging

                                       In this chapter, Larry discusses why lump sum investing is better than dollar cost averaging.

                                       Should you invest your money all at once or spread it over time?

                                       According to Larry, the issue of Dollar Cost Averaging (DCA) typically arises when an investor receives a large lump sum of money and wonders if they should invest it all at once or spread it over time. The same problem arises when an investor panics and sells when confronted with a bear market, but then there are two questions: How does the investor decide when it is safe to reenter the market? And does she reinvest all at once or by DCA?

                                       Constantinides, a University of Chicago professor in the 1960s, studied this question. He demonstrated that DCA is an inferior strategy to lump sum investing. He termed it logically dumb as it makes no sense based on an expected return outcome. From a purely financial perspective, the logical answer is that if you have money to invest, you should always invest it whenever it’s available.

                                       Another paper by John Knight and Lewis Mandell compared DCA to a buy-and-hold strategy. Then, it analyzed the strategies across a series of investor profiles from risk-averse to aggressive. They concluded that DCA had no advantage over the two alternative investment strategies. Combined with their graphical analysis, their numerical trial and empirical evidence favored optimal rebalancing and buy-and-hold strategy over dollar cost averaging. Optimal rebalancing refers to the strategy of adjusting the proportions of assets in a portfolio to maintain a desired level of risk and return.

                                       Dollar cost averaging versus lump sum investing

                                       Knight and Mandell conducted a backtest to compare the performance of DCA versus LSI (lump sum investing). Backtesting is a simulation technique to evaluate the performance of a trading strategy using historical data. They backtested the two strategies between 1926 and 2010. Transaction costs were ignored (favoring DCA, which involves more trading). The authors assumed the initial portfolio was $1 million in cash, and the only investment available was the S&P 500 Index:

                                       • DCA Strategy: At the beginning of each month, one-twelfth of the initial portfolio was invested—the entire $1 million was invested by the end of the 12th month.
                                       • LSI Strategy: The $1 million portfolio was invested on day one.
                                       
                                       

                                       The study covered 781 rolling 20-year periods. The LSI strategy outperformed in 552 of them—over 70 percent of the time. In addition, in the roughly 30 percent of instances in which DCA outperformed, the magnitude of that outperformance was less than when LSI outperformed.

                                       Specifically, during the 552 20-year periods in which LSI did better than DCA, the average cumulative outperformance was $940,301 on the initial $1 million investment. During the 229 periods in which DCA did better than LSI, the average cumulative outperformance was $769,311.

                                       When dollar cost averaging is the better option

                                       Larry notes that there is an argument to be made in favor of DCA when it is the lesser of two evils—when an investor cannot “take the plunge” because they are sure that if they were to invest all at one time, that day would turn out to be the high not exceeded until the next millennium. That fear causes paralysis.

                                       If the market rises after they delay, how can they buy now at even higher prices? And if the market falls, how can they buy now because the bear market they feared has arrived? Once a decision has been made not to buy, how do you decide to buy?

                                       There is a solution to this dilemma that addresses both the logical and the emotional issues. Larry advises an investor to write a business plan for their lump sum. The plan should lay out a schedule with regularly planned investments. The plan might look like one of these alternatives:

                                       • Invest one-third of the investment immediately and invest the remainder one-third at a time during the next two months or the next two quarters.
                                       • Invest one-quarter today and spread the remainder equally over the next three quarters.
                                       • Invest one-sixth each month for six months or every other month.
                                       
                                       

                                       Adopt a glass is half-full perspective

                                       Having accomplished these objectives, Larry says, the investor should adopt a “glass is half full” perspective. If the market rises after the initial investment, they can feel good about how their portfolio has performed. She can also feel good about how smart she was not to delay investing.

                                       If, on the other hand, the market has fallen, the investor can feel good about the opportunity they now have to buy at lower prices and about being smart enough not to have put all of their money in at one time. Either way, the investor wins from a psychological perspective. This is an important consideration because emotions play an essential role in how individuals view outcomes.

                                       Lump sum investing is the way to go

                                       While DCA may sometimes work, Larry insists that putting all your money at once gives you the best odds of having the most money. If you want to put the odds in your favor, which is the best we can do because we don’t have clear crystal balls, he says, you should put all your money in whenever you have it to invest. Unfortunately, despite all the evidence, investors and advisors still recommend DCA.

                                       Further reading

                                       1. George Constantinides, “A Note On The SubOptimality Of Dollar Cost Averaging as an Investment Policy,” The Journal of Financial and Quantitative Analysis, June 1979.
                                       2. John Ross Knight and Lewis Mandell, “Nobody Gains From Dollar Cost Averaging: Analytical, Numerical and Empirical Results,” Financial Services Review, Volume 2, Issue 1 (1992-1993) pp. 1-71.
                                       3. Gerstein Fisher, “Does Dollar Cost Averaging Make Sense For Investors?” 2011.
                                       
                                       

                                       Did you miss out on the previous chapters? Check them out:

                                       Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                                       • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                       • Enrich Your Future 02: How Markets Set Prices
                                       • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                       • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                       • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                       • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                       • Enrich Your Future 07: The Value of Security Analysis
                                       • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                       • Enrich Your Future 09: The Fed Model and the Money Illusion
                                       
                                       

                                       Part II: Strategic Portfolio Decisions

                                       • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                       • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                                       • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                                       • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                                       • Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
                                       • Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
                                       • Enrich Your Future 16: The Estimated Return Is Not Inevitable
                                       • Enrich Your Future 17: Take a Portfolio Approach to Your Investments
                                       • Enrich Your Future 18: Build a Portfolio That Can Withstand the Black Swans
                                       • Enrich Your Future 19: The Gold Illusion: Why Investing in Gold May Not Be Safe
                                       • Enrich Your Future 20: Passive Investing Is the Key to Prudent Wealth Management
                                       
                                       

                                       Part III: Behavioral Finance: We Have Met the Enemy and He Is Us

                                       • Enrich Your Future 21: Think You Can Beat the Market? Think Again
                                       • Enrich Your Future 22: Some Risks Are Not Worth Taking
                                       • Enrich Your Future 23: Seeing Through the Frame: Making Better Investment Decisions
                                       • Enrich Your Future 24: Why Smart People Do Dumb Things
                                       • Enrich Your Future 25: Stock Crashes Happen—Be Prepared
                                       
                                       

                                       About Larry Swedroe

                                       Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                       Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                       Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                       Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                        

                                       [spp-transcript]

                                        

                                       Connect with Larry Swedroe

                                       • LinkedIn
                                       • X
                                       • Website
                                       • Books
                                       
                                       

                                       Andrew’s books

                                       • How to Start Building Your Wealth Investing in the Stock Market
                                       • My Worst Investment Ever
                                       • 9 Valuation Mistakes and How to Avoid Them
                                       • Transform Your Business with Dr.Deming’s 14 Points
                                       
                                       

                                       Andrew’s online programs

                                       • Valuation Master Class
                                       • The Become a Better Investor Community
                                       • How to Start Building Your Wealth Investing in the Stock Market
                                       • Finance Made Ridiculously Simple
                                       • FVMR Investing: Quantamental Investing Across the World
                                       • Become a Great Presenter and Increase Your Influence
                                       • Transform Your Business with Dr. Deming’s 14 Points
                                       • Achieve Your Goals
                                       
                                       

                                       Connect with Andrew Stotz:

                                       • astotz.com
                                       • LinkedIn
                                       • Facebook
                                       • Instagram
                                       • Threads
                                       • X
                                       • YouTube
                                       • My Worst Investment Ever Podcast
                                       
                                       ]]>56127ae3-b8cb-42c2-86c6-a096964a6c27Tue, 11 Mar 2025 06:00:00 +070014:19falsefullElvi Caperonis - Why Passion Matters in BusinessBIO: Elvi Caperonis is a former Harvard University Analyst and Technical Program Manager at Amazon and LinkedIn’s top Voice and a career strategist who has mastered the art of storytelling to create a six-figure personal brand on LinkedIn.

                                       STORY: Elvi decided to be her own boss and started an e-commerce business for which she had no knowledge or passion. It turned out to be a nightmare that cost her $30,000.

                                       LEARNING: If you don’t have passion for something, don’t do it. Happiness and delivering value should be the ultimate goal, not just making money.

                                        

                                       “Yes, you want to start a business. But first, sit back and ask yourself, “Will I enjoy this? Is this going to tell the story that I want to live in the world?”

                                       Elvi Caperonis

                                        

                                       Guest profile

                                       Elvi Caperonis is a former Harvard University Analyst and Technical Program Manager at Amazon and LinkedIn’s top Voice and a career strategist who has mastered the art of storytelling to create a six-figure personal brand on LinkedIn.

                                       With a track record of helping job seekers land their dream jobs and supporting millions across the globe through her content on Linkedin, Elvi Caperonis has become the go-to expert for those looking to build a personal brand and land their dream job.

                                       The ability to connect with her audience through storytelling and content strategies has made an impact and helped build her brand. Elvi is passionate about helping and inspiring others to achieve results similar to hers.

                                       Land Your Dream Job and Succeed 10X Faster!: Access the same strategies that transformed my career Growth by landing jobs at top companies like Harvard University and Amazon—all for a fraction of the price.

                                       Worst investment ever

                                       A few years ago, Elvi decided she wanted to be an entrepreneur and her own boss. She discussed it with her husband, who was very supportive. Elvi chose to launch an E-commerce business. She had heard many people say it was a fun and profitable business and believed she could do it.

                                       Elvi took an online course and started learning about E-commerce and how to do it step by step. She did her due diligence. Unfortunately, Elvi didn’t have a passion for E-commerce. It was a lot of work, and it was a nightmare at the end because she was putting in a lot of hours and didn’t turn a profit. She lost about $30,000 in that business.

                                       Lessons learned

                                       • If you don’t have passion for something, question yourself 1,000 times before starting that business. Passion allows you to tell a story that resonates with your customers.
                                       • Learn from people who have done it before and get a mentor.
                                       • If you don’t have experience in the kind of business you want to start, don’t go all in; be agile and try to sell a few units of your product, then double down as you continue to grow and adapt.
                                       • Happiness and delivering value should be the ultimate goal, not just making money.
                                       
                                       

                                       Andrew’s takeaways

                                       • Whatever job or business you start, ensure it’s built around the core thing you do naturally today.
                                       
                                       

                                       No.1 goal for the next 12 months

                                       Elvi’s number one goal for the next 12 months is to spend more time with her kids, husband, mom, sisters, aunts, and whole family.

                                       Parting words

                                        

                                       “Even if you cannot see it now, whatever you are going through will be okay. Just keep reminding yourself of this.”

                                       Elvi Caperonis

                                        

                                       [spp-transcript]

                                        

                                       Connect with Elvi Caperonis

                                       • LinkedIn
                                       • Website
                                       
                                       

                                       Andrew’s books

                                       • How to Start Building Your Wealth Investing in the Stock Market
                                       • My Worst Investment Ever
                                       • 9 Valuation Mistakes and How to Avoid Them
                                       • Transform Your Business with Dr.Deming’s 14 Points
                                       
                                       

                                       Andrew’s online programs

                                       • Valuation Master Class
                                       • The Become a Better Investor Community
                                       • How to Start Building Your Wealth Investing in the Stock Market
                                       • Finance Made Ridiculously Simple
                                       • FVMR Investing: Quantamental Investing Across the World
                                       • Become a Great Presenter and Increase Your Influence
                                       • Transform Your Business with Dr. Deming’s 14 Points
                                       • Achieve Your Goals
                                       
                                       

                                       Connect with Andrew Stotz:

                                       • astotz.com
                                       • LinkedIn
                                       • Facebook
                                       • Instagram
                                       • Threads
                                       • X
                                       • YouTube
                                       • My Worst Investment Ever Podcast
                                       
                                       ]]>BIO: Elvi Caperonis is a former Harvard University Analyst and Technical Program Manager at Amazon and LinkedIn’s top Voice and a career strategist who has mastered the art of storytelling to create a six-figure personal brand on LinkedIn.

                                       STORY: Elvi decided to be her own boss and started an e-commerce business for which she had no knowledge or passion. It turned out to be a nightmare that cost her $30,000.

                                       LEARNING: If you don’t have passion for something, don’t do it. Happiness and delivering value should be the ultimate goal, not just making money.

                                        

                                       “Yes, you want to start a business. But first, sit back and ask yourself, “Will I enjoy this? Is this going to tell the story that I want to live in the world?”

                                       Elvi Caperonis

                                        

                                       Guest profile

                                       Elvi Caperonis is a former Harvard University Analyst and Technical Program Manager at Amazon and LinkedIn’s top Voice and a career strategist who has mastered the art of storytelling to create a six-figure personal brand on LinkedIn.

                                       With a track record of helping job seekers land their dream jobs and supporting millions across the globe through her content on Linkedin, Elvi Caperonis has become the go-to expert for those looking to build a personal brand and land their dream job.

                                       The ability to connect with her audience through storytelling and content strategies has made an impact and helped build her brand. Elvi is passionate about helping and inspiring others to achieve results similar to hers.

                                       Land Your Dream Job and Succeed 10X Faster!: Access the same strategies that transformed my career Growth by landing jobs at top companies like Harvard University and Amazon—all for a fraction of the price.

                                       Worst investment ever

                                       A few years ago, Elvi decided she wanted to be an entrepreneur and her own boss. She discussed it with her husband, who was very supportive. Elvi chose to launch an E-commerce business. She had heard many people say it was a fun and profitable business and believed she could do it.

                                       Elvi took an online course and started learning about E-commerce and how to do it step by step. She did her due diligence. Unfortunately, Elvi didn’t have a passion for E-commerce. It was a lot of work, and it was a nightmare at the end because she was putting in a lot of hours and didn’t turn a profit. She lost about $30,000 in that business.

                                       Lessons learned

                                       • If you don’t have passion for something, question yourself 1,000 times before starting that business. Passion allows you to tell a story that resonates with your customers.
                                       • Learn from people who have done it before and get a mentor.
                                       • If you don’t have experience in the kind of business you want to start, don’t go all in; be agile and try to sell a few units of your product, then double down as you continue to grow and adapt.
                                       • Happiness and delivering value should be the ultimate goal, not just making money.
                                       
                                       

                                       Andrew’s takeaways

                                       • Whatever job or business you start, ensure it’s built around the core thing you do naturally today.
                                       
                                       

                                       No.1 goal for the next 12 months

                                       Elvi’s number one goal for the next 12 months is to spend more time with her kids, husband, mom, sisters, aunts, and whole family.

                                       Parting words

                                        

                                       “Even if you cannot see it now, whatever you are going through will be okay. Just keep reminding yourself of this.”

                                       Elvi Caperonis

                                        

                                       [spp-transcript]

                                        

                                       Connect with Elvi Caperonis

                                       • LinkedIn
                                       • Website
                                       
                                       

                                       Andrew’s books

                                       • How to Start Building Your Wealth Investing in the Stock Market
                                       • My Worst Investment Ever
                                       • 9 Valuation Mistakes and How to Avoid Them
                                       • Transform Your Business with Dr.Deming’s 14 Points
                                       
                                       

                                       Andrew’s online programs

                                       • Valuation Master Class
                                       • The Become a Better Investor Community
                                       • How to Start Building Your Wealth Investing in the Stock Market
                                       • Finance Made Ridiculously Simple
                                       • FVMR Investing: Quantamental Investing Across the World
                                       • Become a Great Presenter and Increase Your Influence
                                       • Transform Your Business with Dr. Deming’s 14 Points
                                       • Achieve Your Goals
                                       
                                       

                                       Connect with Andrew Stotz:

                                       • astotz.com
                                       • LinkedIn
                                       • Facebook
                                       • Instagram
                                       • Threads
                                       • X
                                       • YouTube
                                       • My Worst Investment Ever Podcast
                                       
                                       ]]>5a86f3e1-bd17-4705-a791-2679b9bf7d5fTue, 04 Mar 2025 06:00:00 +070039:58falsefullEnrich Your Future 25: Stock Crashes Happen—Be PreparedIn this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 25: Battles are Won Before They Are Fought.

                                       LEARNING: Be well-prepared for potential disruptions in the market.

                                        

                                       “Many investors let emotions drive their decisions, and they end up buying high and selling low—the opposite of what you are doing when rebalancing.”

                                       Larry Swedroe

                                        

                                       In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                       Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 25: Battles are Won Before They Are Fought.

                                       Chapter 25: Battles Are Won Before They Are Fought

                                       In this chapter, Larry emphasizes the importance of strategic planning to anticipate market shocks, which occur approximately once every three or four years. This proactive approach ensures that investors are well-prepared for potential disruptions in the market.

                                       Historical distribution of stock returns

                                       Gene Fama studied the historical distribution of stock returns and found that the population of price changes if it was strictly normal on any stock, then a standard deviation shift from the mean of five standard deviations should occur about once every 7,000 years.

                                       The reality, though, is it occurs about once every three or four years in the US equity markets. That means the distribution of returns is not normally distributed. To illustrate this, Larry shares evidence of big fat tails in the distribution. From 1926–2022, in 26 out of the 97 years, the S&P 500 Index produced negative returns. In 11 of those years, the losses were greater than 10%. In six of the years, the losses exceeded 20%. In three of the years, the losses exceeded 30%. In one year, the loss exceeded 40%.

                                       Prepare to live through a big market downturn

                                       According to Larry, the data unequivocally shows that stocks are risky assets, with risks that are more prevalent than historical volatility would suggest. Investors must be prepared to face severe losses at some point. It’s not a matter of if these risks will manifest, but when, how sharp the declines will be, and when they will subside.

                                       For investors, Larry underscores the importance of winning the big fat tails battle in the planning stage. Successful investors know that bear markets will happen and that they cannot be predicted with a high degree of accuracy. Thus, they build bear markets into their plans. They determine their ability, willingness, and need to take risks.

                                       Larry notes that, on average, prudent investors prepare to live through a big market shock once every three or four years. They ensure that their asset allocation does not cause them to take so much risk that when a bear market inevitably shows up, they might sell in a panic. They also make sure that they don’t take so much risk that they lose sleep when emotions caused by bear markets run high.

                                       The best way to invest during crises

                                       While global diversification across equity asset classes is a prudent strategy that reduces risk over the long term, this benefit diminishes during crises. The only reliable refuge during such periods is high-quality fixed-income investments, such as Treasuries, government agency securities, and FDIC-insured CDs. This emphasis on diversification should instill a sense of security and protection in investors.

                                       Riskier fixed-income assets such as junk and emerging market bonds also suffer from flights-to-quality and liquidity. This is why the prudent strategy is to ensure that your portfolio contains a sufficient amount of safe bonds to dampen the overall portfolio’s risk to an acceptable level—winning the battle before the fight begins.

                                       Further reading

                                       1. Wall Street Journal, “One ‘Quant’ Sees Shakeout For the Ages—’10,000 Years,’ August 11-12, 2007.
                                       2. Roger Lowenstein, When Genius Failed, Random House (1st edition, September 2000).
                                       3. Worth (September 1995).
                                       4. Stephen Gould, Full House.
                                       
                                       

                                       Did you miss out on the previous chapters? Check them out:

                                       Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                                       • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                       • Enrich Your Future 02: How Markets Set Prices
                                       • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                       • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                       • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                       • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                       • Enrich Your Future 07: The Value of Security Analysis
                                       • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                       • Enrich Your Future 09: The Fed Model and the Money Illusion
                                       
                                       

                                       Part II: Strategic Portfolio Decisions

                                       • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                       • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                                       • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                                       • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                                       • Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
                                       • Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
                                       • Enrich Your Future 16: The Estimated Return Is Not Inevitable
                                       • Enrich Your Future 17: Take a Portfolio Approach to Your Investments
                                       • Enrich Your Future 18: Build a Portfolio That Can Withstand the Black...]]>In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 25: Battles are Won Before They Are Fought.

                                         LEARNING: Be well-prepared for potential disruptions in the market.

                                          

                                         “Many investors let emotions drive their decisions, and they end up buying high and selling low—the opposite of what you are doing when rebalancing.”

                                         Larry Swedroe

                                          

                                         In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                         Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 25: Battles are Won Before They Are Fought.

                                         Chapter 25: Battles Are Won Before They Are Fought

                                         In this chapter, Larry emphasizes the importance of strategic planning to anticipate market shocks, which occur approximately once every three or four years. This proactive approach ensures that investors are well-prepared for potential disruptions in the market.

                                         Historical distribution of stock returns

                                         Gene Fama studied the historical distribution of stock returns and found that the population of price changes if it was strictly normal on any stock, then a standard deviation shift from the mean of five standard deviations should occur about once every 7,000 years.

                                         The reality, though, is it occurs about once every three or four years in the US equity markets. That means the distribution of returns is not normally distributed. To illustrate this, Larry shares evidence of big fat tails in the distribution. From 1926–2022, in 26 out of the 97 years, the S&P 500 Index produced negative returns. In 11 of those years, the losses were greater than 10%. In six of the years, the losses exceeded 20%. In three of the years, the losses exceeded 30%. In one year, the loss exceeded 40%.

                                         Prepare to live through a big market downturn

                                         According to Larry, the data unequivocally shows that stocks are risky assets, with risks that are more prevalent than historical volatility would suggest. Investors must be prepared to face severe losses at some point. It’s not a matter of if these risks will manifest, but when, how sharp the declines will be, and when they will subside.

                                         For investors, Larry underscores the importance of winning the big fat tails battle in the planning stage. Successful investors know that bear markets will happen and that they cannot be predicted with a high degree of accuracy. Thus, they build bear markets into their plans. They determine their ability, willingness, and need to take risks.

                                         Larry notes that, on average, prudent investors prepare to live through a big market shock once every three or four years. They ensure that their asset allocation does not cause them to take so much risk that when a bear market inevitably shows up, they might sell in a panic. They also make sure that they don’t take so much risk that they lose sleep when emotions caused by bear markets run high.

                                         The best way to invest during crises

                                         While global diversification across equity asset classes is a prudent strategy that reduces risk over the long term, this benefit diminishes during crises. The only reliable refuge during such periods is high-quality fixed-income investments, such as Treasuries, government agency securities, and FDIC-insured CDs. This emphasis on diversification should instill a sense of security and protection in investors.

                                         Riskier fixed-income assets such as junk and emerging market bonds also suffer from flights-to-quality and liquidity. This is why the prudent strategy is to ensure that your portfolio contains a sufficient amount of safe bonds to dampen the overall portfolio’s risk to an acceptable level—winning the battle before the fight begins.

                                         Further reading

                                         1. Wall Street Journal, “One ‘Quant’ Sees Shakeout For the Ages—’10,000 Years,’ August 11-12, 2007.
                                         2. Roger Lowenstein, When Genius Failed, Random House (1st edition, September 2000).
                                         3. Worth (September 1995).
                                         4. Stephen Gould, Full House.
                                         
                                         

                                         Did you miss out on the previous chapters? Check them out:

                                         Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                                         • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                         • Enrich Your Future 02: How Markets Set Prices
                                         • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                         • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                         • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                         • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                         • Enrich Your Future 07: The Value of Security Analysis
                                         • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                         • Enrich Your Future 09: The Fed Model and the Money Illusion
                                         
                                         

                                         Part II: Strategic Portfolio Decisions

                                         • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                         • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                                         • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                                         • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                                         • Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
                                         • Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
                                         • Enrich Your Future 16: The Estimated Return Is Not Inevitable
                                         • Enrich Your Future 17: Take a Portfolio Approach to Your Investments
                                         • Enrich Your Future 18: Build a Portfolio That Can Withstand the Black Swans
                                         • Enrich Your Future 19: The Gold Illusion: Why Investing in Gold May Not Be Safe
                                         • Enrich Your Future 20: Passive Investing Is the Key to Prudent Wealth Management
                                         
                                         

                                         Part III: Behavioral Finance: We Have Met the Enemy and He Is Us

                                         • Enrich Your Future 21: Think You Can Beat the Market? Think Again
                                         • Enrich Your Future 22: Some Risks Are Not Worth Taking
                                         • Enrich Your Future 23: Seeing Through the Frame: Making Better Investment Decisions
                                         • Enrich Your Future 24: Why Smart People Do Dumb Things
                                         
                                         

                                         About Larry Swedroe

                                         Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                         Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                         Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                         Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                          

                                         [spp-transcript]

                                          

                                         Connect with Larry Swedroe

                                         • LinkedIn
                                         • X
                                         • Website
                                         • Books
                                         
                                         

                                         Andrew’s books

                                         • How to Start Building Your Wealth Investing in the Stock Market
                                         • My Worst Investment Ever
                                         • 9 Valuation Mistakes and How to Avoid Them
                                         • Transform Your Business with Dr.Deming’s 14 Points
                                         
                                         

                                         Andrew’s online programs

                                         • Valuation Master Class
                                         • The Become a Better Investor Community
                                         • How to Start Building Your Wealth Investing in the Stock Market
                                         • Finance Made Ridiculously Simple
                                         • FVMR Investing: Quantamental Investing Across the World
                                         • Become a Great Presenter and Increase Your Influence
                                         • Transform Your Business with Dr. Deming’s 14 Points
                                         • Achieve Your Goals
                                         
                                         

                                         Connect with Andrew Stotz:

                                         • astotz.com
                                         • LinkedIn
                                         • Facebook
                                         • Instagram
                                         • Threads
                                         • X
                                         • YouTube
                                         • My Worst Investment Ever Podcast
                                         
                                         ]]>406c5ef2-a4a4-4810-bd05-f2de23e65791Tue, 25 Feb 2025 06:00:00 +070026:44falsefullFabrizio Poli – When Passion Meets Poor PartnershipBIO: Fabrizio has always wanted to fly jets and has had a career flying both private jets and for various airlines worldwide. He has shared the cockpit with pilots from over 65 nationalities, giving him a broader perspective on people and life.

                                         STORY: Fabrizio invested in a luxury car business in Italy but chose the wrong person to run the show, and because of this, he lost all his money and a very good friend.

                                         LEARNING: Do not mix business with friendship. Hire the right people.

                                          

                                         “Business decisions need to be made to make money. If that money helps people as well, great. But trying to mix charity with business is a very bad idea.”

                                         Fabrizio Poli

                                          

                                         Guest profile

                                         Fabrizio Poli has always wanted to fly jets and has had a career flying both private jets and for various airlines worldwide. He has shared the cockpit with pilots from over 65 nationalities, giving him a broader perspective on people and life. For the last 14 years, Fabrizio has been buying, selling, leasing, and chartering private jets for the ultra-wealthy.

                                         Fabrizio is the author of “The Quantum Economy” and other books. He often shares his aviation expertise in the media and is featured in the Financial Times, Bloomberg, Social Media Examiner, and Chicago Tribune.

                                         Worst investment ever

                                         Being in the private jet business, Fabrizio decided to venture into the car business a few years ago. He figured people who buy private jets also collect cars. Fabrizio teamed up with a friend of his in Italy. The idea was to buy Vespers, Alfa Romeos, and Ferraris in Italy and sell them internationally. They bought a bunch of cars and opened a showroom in Italy on the road where the first Ferrari was driven. However, Fabrizio was in England at the time. He assumed that his friend was doing things properly.

                                         Since the showroom was on a popular road with all these flashy cars parked outside, many people were walking into the showroom, unfortunately not to buy but to look at them.

                                         Fabrizio sent over a web designer to help tweak the website and suggested that his partner let people into the showroom by appointment only. This way, he’d avoid spending 90% of his day talking to people who are not there to buy a car. The friend did not heed his advice, and eventually, the business went under.

                                         Fabrizio had invested in the right business but in the wrong person, and because of this, he lost all his money and a very good friend.

                                         Lessons learned

                                         • Hire the right people and create a supportive environment for them.
                                         • Separate business decisions from personal emotions and make independent evaluations.
                                         • The product and the process can be great, but if you pick the wrong people to run it, they’ll screw the whole thing up.
                                         
                                         

                                         Andrew’s takeaways

                                         • Find an independent, objective, knowledgeable third party to help pick a business partner.
                                         • Separate the business idea from the person in charge of bringing it to life.
                                         
                                         

                                         Actionable advice

                                         If you are going to invest with your friend, you are emotionally engaged, and that’s dangerous. Bring somebody else to play the bad guy, someone who can make tough decisions and keep emotions in check if you cannot take the emotion out.

                                         Fabrizio’s recommendations

                                         Fabrizio recommends reading a lot—both fiction and nonfiction—to open up new possibilities and perspectives. He also recommends listening to other business leaders to learn from their experiences. This practice can inspire and inform your business decisions.

                                         No.1 goal for the next 12 months

                                         Fabrizio’s number one goal for the next 12 months is to start and launch a new business by September. He is also planning on publishing another book this year.

                                         Parting words

                                          

                                         “Fly high. Think high.”

                                         Fabrizio Poli

                                          

                                         [spp-transcript]

                                          

                                         Connect with Fabrizio Poli

                                         • LinkedIn
                                         • Podcast
                                         • YouTube
                                         
                                         

                                         Andrew’s books

                                         • How to Start Building Your Wealth Investing in the Stock Market
                                         • My Worst Investment Ever
                                         • 9 Valuation Mistakes and How to Avoid Them
                                         • Transform Your Business with Dr.Deming’s 14 Points
                                         
                                         

                                         Andrew’s online programs

                                         • Valuation Master Class
                                         • The Become a Better Investor Community
                                         • How to Start Building Your Wealth Investing in the Stock Market
                                         • Finance Made Ridiculously Simple
                                         • FVMR Investing: Quantamental Investing Across the World
                                         • Become a Great Presenter and Increase Your Influence
                                         • Transform Your Business with Dr. Deming’s 14 Points
                                         • Achieve Your Goals
                                         
                                         

                                         Connect with Andrew Stotz:

                                         • astotz.com
                                         • LinkedIn
                                         • Facebook
                                         • Instagram
                                         • Threads
                                         • X
                                         • YouTube
                                         • My Worst Investment Ever Podcast
                                         
                                         ]]>BIO: Fabrizio has always wanted to fly jets and has had a career flying both private jets and for various airlines worldwide. He has shared the cockpit with pilots from over 65 nationalities, giving him a broader perspective on people and life.

                                         STORY: Fabrizio invested in a luxury car business in Italy but chose the wrong person to run the show, and because of this, he lost all his money and a very good friend.

                                         LEARNING: Do not mix business with friendship. Hire the right people.

                                          

                                         “Business decisions need to be made to make money. If that money helps people as well, great. But trying to mix charity with business is a very bad idea.”

                                         Fabrizio Poli

                                          

                                         Guest profile

                                         Fabrizio Poli has always wanted to fly jets and has had a career flying both private jets and for various airlines worldwide. He has shared the cockpit with pilots from over 65 nationalities, giving him a broader perspective on people and life. For the last 14 years, Fabrizio has been buying, selling, leasing, and chartering private jets for the ultra-wealthy.

                                         Fabrizio is the author of “The Quantum Economy” and other books. He often shares his aviation expertise in the media and is featured in the Financial Times, Bloomberg, Social Media Examiner, and Chicago Tribune.

                                         Worst investment ever

                                         Being in the private jet business, Fabrizio decided to venture into the car business a few years ago. He figured people who buy private jets also collect cars. Fabrizio teamed up with a friend of his in Italy. The idea was to buy Vespers, Alfa Romeos, and Ferraris in Italy and sell them internationally. They bought a bunch of cars and opened a showroom in Italy on the road where the first Ferrari was driven. However, Fabrizio was in England at the time. He assumed that his friend was doing things properly.

                                         Since the showroom was on a popular road with all these flashy cars parked outside, many people were walking into the showroom, unfortunately not to buy but to look at them.

                                         Fabrizio sent over a web designer to help tweak the website and suggested that his partner let people into the showroom by appointment only. This way, he’d avoid spending 90% of his day talking to people who are not there to buy a car. The friend did not heed his advice, and eventually, the business went under.

                                         Fabrizio had invested in the right business but in the wrong person, and because of this, he lost all his money and a very good friend.

                                         Lessons learned

                                         • Hire the right people and create a supportive environment for them.
                                         • Separate business decisions from personal emotions and make independent evaluations.
                                         • The product and the process can be great, but if you pick the wrong people to run it, they’ll screw the whole thing up.
                                         
                                         

                                         Andrew’s takeaways

                                         • Find an independent, objective, knowledgeable third party to help pick a business partner.
                                         • Separate the business idea from the person in charge of bringing it to life.
                                         
                                         

                                         Actionable advice

                                         If you are going to invest with your friend, you are emotionally engaged, and that’s dangerous. Bring somebody else to play the bad guy, someone who can make tough decisions and keep emotions in check if you cannot take the emotion out.

                                         Fabrizio’s recommendations

                                         Fabrizio recommends reading a lot—both fiction and nonfiction—to open up new possibilities and perspectives. He also recommends listening to other business leaders to learn from their experiences. This practice can inspire and inform your business decisions.

                                         No.1 goal for the next 12 months

                                         Fabrizio’s number one goal for the next 12 months is to start and launch a new business by September. He is also planning on publishing another book this year.

                                         Parting words

                                          

                                         “Fly high. Think high.”

                                         Fabrizio Poli

                                          

                                         [spp-transcript]

                                          

                                         Connect with Fabrizio Poli

                                         • LinkedIn
                                         • Podcast
                                         • YouTube
                                         
                                         

                                         Andrew’s books

                                         • How to Start Building Your Wealth Investing in the Stock Market
                                         • My Worst Investment Ever
                                         • 9 Valuation Mistakes and How to Avoid Them
                                         • Transform Your Business with Dr.Deming’s 14 Points
                                         
                                         

                                         Andrew’s online programs

                                         • Valuation Master Class
                                         • The Become a Better Investor Community
                                         • How to Start Building Your Wealth Investing in the Stock Market
                                         • Finance Made Ridiculously Simple
                                         • FVMR Investing: Quantamental Investing Across the World
                                         • Become a Great Presenter and Increase Your Influence
                                         • Transform Your Business with Dr. Deming’s 14 Points
                                         • Achieve Your Goals
                                         
                                         

                                         Connect with Andrew Stotz:

                                         • astotz.com
                                         • LinkedIn
                                         • Facebook
                                         • Instagram
                                         • Threads
                                         • X
                                         • YouTube
                                         • My Worst Investment Ever Podcast
                                         
                                         ]]>a1a3315f-f568-4d32-bbd9-4a8b9c7e4033Tue, 18 Feb 2025 06:00:00 +070044:18falsefullEnrich Your Future 24: Why Smart People Do Dumb ThingsIn this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 24: Why Do Smart People Do Dumb Things?

                                         LEARNING: Past performance does not guarantee future results. Change the criteria you use to select managers.

                                          

                                         “There are only two things that are infinite, the universe and man’s capacity for stupidity.”

                                         Larry Swedroe

                                          

                                         In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                         Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 24: Why Do Smart People Do Dumb Things?

                                         Chapter 24: Why Do Smart People Do Dumb Things?

                                         In this chapter, Larry discusses why investors still make mistakes despite multiple SEC warnings.

                                         The past performance delusion

                                         Larry explains that it’s normal for most investors to make mistakes when investing, often due to behavioral errors like overconfidence. Being overconfident can cause investors to take too much risk, trade too much, and confuse the familiar with the safe. Those are explainable errors.

                                         However, there’s one mistake that Larry finds hard to explain. Most investors ignore the SEC’s required warning that accompanies all mutual fund advertising: “Past performance does not guarantee future results.” Despite an overwhelming body of evidence, including the annual S&P’s Active Versus Passive Scorecards, that demonstrates that active managers’ past mutual fund returns are not prologue and the SEC’s warning, investors still flock to funds that have performed well in the past.

                                         Today’s underperforming manager may be tomorrow’s outperformer

                                         According to Larry, various researchers have found that the common selection methodology is detrimental to performance. The greater benchmark-adjusted return to investing in ‘loser funds’ over ‘winner funds’ is statistically and economically large and robust to reasonable variations in the evaluation and holding periods and standard risk adjustments.

                                         Additionally, the standard practice of firing managers who have recently underperformed actually eliminates those managers who are more likely to outperform in the future.

                                         Why Are Warnings Worthless?

                                         Larry quotes the study “Worthless Warnings? Testing the Effectiveness of Disclaimers in Mutual Fund Advertisements,” which provided some interesting results. The authors found that people viewing the advertisement with the current SEC disclaimer were just as likely to invest in a fund and had the exact expectations regarding a fund’s future returns as people viewing the advertisement with no disclaimer whatsoever.

                                         The authors concluded that the SEC-mandating disclaimer is completely ineffective. The disclaimer neither reduces investors’ propensity to invest in advertised funds nor diminishes their expectations regarding future returns.

                                         The current SEC disclaimer is too weak

                                         The authors noted that the current disclaimer fails because it is too weak. It only conveys that high past returns don’t guarantee high future returns and that investors in the fund could lose money, things that almost all investors already know.

                                         It fails to convey what investors need to understand: high past returns are a poor predictor of high future returns. In the authors’ opinion, a stronger disclaimer—one that informs investors that high fund returns generally don’t persist (they are often a matter of chance)—would be much more effective.

                                         The insane investor

                                         In conclusion, Larry observes that many investors do the same thing over and over again and expect a different outcome. Most seem never to stop and ask: If the managers I hired based on their past outperformance have underperformed after being hired, why do I think the new managers I hire to replace them will outperform if I use the same criteria that have repeatedly failed? And, if I am not doing anything different, why should I expect a different outcome?

                                         Change the criteria you use to select managers

                                         Larry advises investors to change the criteria they use to select managers. Instead of relying mainly, if not solely, on past performance, they should use criteria such as fund expenses and the fund’s degree of exposure to well-documented factors (such as size, value, momentum, profitability, and quality) that have been shown to have provided premiums.

                                         These premiums should have evidence that they have been persistent, pervasive, robust to various definitions, implementable (they survive transaction costs) and that they have intuitive explanations for why you should expect the premium to persist.

                                         By using criteria that lead to superior results, investors can avoid actively managed funds and significantly increase their chances of achieving better investment outcomes.

                                         Further reading

                                         1. Itzhak Ben-David, Jiacui Li, Andrea Rossi, and Yang Son, “Advice-Driven Demand and Systematic Price Fluctuations,” February 2021.
                                         2. Bradford Cornell, Jason Hsu and David Nanigian, “Does Past Performance Matter in Investment Manager Selection?” Journal of Portfolio Management, Summer 2017.
                                         3. Rob Bauer, Rik Frehen, Hurber Lum and Roger Otten, “The Performance of U.S. Pension Plans,” 2008.
                                         4. Amit Goyal and Sunil Wahal, “The Selection and Termination of Investment Management Firms by Plan Sponsors,” Journal of Portfolio Management (August 2008).
                                         5. Molly Mercer, Alan R. Palmer and Ahmed E. Taha, “Worthless Warnings? Testing the Effectiveness of Disclaimers in Mutual Fund Advertisements,” Journal of Empirical Legal Studies (September 2010).
                                         
                                         

                                         Did you miss out on the previous chapters? Check them out:

                                         Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                                         • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                         • Enrich Your Future 02: How Markets Set Prices
                                         • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                         • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                         • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                         • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                         • Enrich Your Future 07: The Value of Security Analysis
                                         • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                         • In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 24: Why Do Smart People Do Dumb Things?

                                           LEARNING: Past performance does not guarantee future results. Change the criteria you use to select managers.

                                            

                                           “There are only two things that are infinite, the universe and man’s capacity for stupidity.”

                                           Larry Swedroe

                                            

                                           In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                           Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 24: Why Do Smart People Do Dumb Things?

                                           Chapter 24: Why Do Smart People Do Dumb Things?

                                           In this chapter, Larry discusses why investors still make mistakes despite multiple SEC warnings.

                                           The past performance delusion

                                           Larry explains that it’s normal for most investors to make mistakes when investing, often due to behavioral errors like overconfidence. Being overconfident can cause investors to take too much risk, trade too much, and confuse the familiar with the safe. Those are explainable errors.

                                           However, there’s one mistake that Larry finds hard to explain. Most investors ignore the SEC’s required warning that accompanies all mutual fund advertising: “Past performance does not guarantee future results.” Despite an overwhelming body of evidence, including the annual S&P’s Active Versus Passive Scorecards, that demonstrates that active managers’ past mutual fund returns are not prologue and the SEC’s warning, investors still flock to funds that have performed well in the past.

                                           Today’s underperforming manager may be tomorrow’s outperformer

                                           According to Larry, various researchers have found that the common selection methodology is detrimental to performance. The greater benchmark-adjusted return to investing in ‘loser funds’ over ‘winner funds’ is statistically and economically large and robust to reasonable variations in the evaluation and holding periods and standard risk adjustments.

                                           Additionally, the standard practice of firing managers who have recently underperformed actually eliminates those managers who are more likely to outperform in the future.

                                           Why Are Warnings Worthless?

                                           Larry quotes the study “Worthless Warnings? Testing the Effectiveness of Disclaimers in Mutual Fund Advertisements,” which provided some interesting results. The authors found that people viewing the advertisement with the current SEC disclaimer were just as likely to invest in a fund and had the exact expectations regarding a fund’s future returns as people viewing the advertisement with no disclaimer whatsoever.

                                           The authors concluded that the SEC-mandating disclaimer is completely ineffective. The disclaimer neither reduces investors’ propensity to invest in advertised funds nor diminishes their expectations regarding future returns.

                                           The current SEC disclaimer is too weak

                                           The authors noted that the current disclaimer fails because it is too weak. It only conveys that high past returns don’t guarantee high future returns and that investors in the fund could lose money, things that almost all investors already know.

                                           It fails to convey what investors need to understand: high past returns are a poor predictor of high future returns. In the authors’ opinion, a stronger disclaimer—one that informs investors that high fund returns generally don’t persist (they are often a matter of chance)—would be much more effective.

                                           The insane investor

                                           In conclusion, Larry observes that many investors do the same thing over and over again and expect a different outcome. Most seem never to stop and ask: If the managers I hired based on their past outperformance have underperformed after being hired, why do I think the new managers I hire to replace them will outperform if I use the same criteria that have repeatedly failed? And, if I am not doing anything different, why should I expect a different outcome?

                                           Change the criteria you use to select managers

                                           Larry advises investors to change the criteria they use to select managers. Instead of relying mainly, if not solely, on past performance, they should use criteria such as fund expenses and the fund’s degree of exposure to well-documented factors (such as size, value, momentum, profitability, and quality) that have been shown to have provided premiums.

                                           These premiums should have evidence that they have been persistent, pervasive, robust to various definitions, implementable (they survive transaction costs) and that they have intuitive explanations for why you should expect the premium to persist.

                                           By using criteria that lead to superior results, investors can avoid actively managed funds and significantly increase their chances of achieving better investment outcomes.

                                           Further reading

                                           1. Itzhak Ben-David, Jiacui Li, Andrea Rossi, and Yang Son, “Advice-Driven Demand and Systematic Price Fluctuations,” February 2021.
                                           2. Bradford Cornell, Jason Hsu and David Nanigian, “Does Past Performance Matter in Investment Manager Selection?” Journal of Portfolio Management, Summer 2017.
                                           3. Rob Bauer, Rik Frehen, Hurber Lum and Roger Otten, “The Performance of U.S. Pension Plans,” 2008.
                                           4. Amit Goyal and Sunil Wahal, “The Selection and Termination of Investment Management Firms by Plan Sponsors,” Journal of Portfolio Management (August 2008).
                                           5. Molly Mercer, Alan R. Palmer and Ahmed E. Taha, “Worthless Warnings? Testing the Effectiveness of Disclaimers in Mutual Fund Advertisements,” Journal of Empirical Legal Studies (September 2010).
                                           
                                           

                                           Did you miss out on the previous chapters? Check them out:

                                           Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                                           • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                           • Enrich Your Future 02: How Markets Set Prices
                                           • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                           • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                           • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                           • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                           • Enrich Your Future 07: The Value of Security Analysis
                                           • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                           • Enrich Your Future 09: The Fed Model and the Money Illusion
                                           
                                           

                                           Part II: Strategic Portfolio Decisions

                                           • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                           • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                                           • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                                           • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                                           • Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
                                           • Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
                                           • Enrich Your Future 16: The Estimated Return Is Not Inevitable
                                           • Enrich Your Future 17: Take a Portfolio Approach to Your Investments
                                           • Enrich Your Future 18: Build a Portfolio That Can Withstand the Black Swans
                                           • Enrich Your Future 19: The Gold Illusion: Why Investing in Gold May Not Be Safe
                                           • Enrich Your Future 20: Passive Investing Is the Key to Prudent Wealth Management
                                           
                                           

                                           Part III: Behavioral Finance: We Have Met the Enemy and He Is Us

                                           • Enrich Your Future 21: Think You Can Beat the Market? Think Again
                                           • Enrich Your Future 22: Some Risks Are Not Worth Taking
                                           • Enrich Your Future 23: Seeing Through the Frame: Making Better Investment Decisions
                                           
                                           

                                           About Larry Swedroe

                                           Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                           Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                           Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                           Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                            

                                           [spp-transcript]

                                            

                                           Connect with Larry Swedroe

                                           • LinkedIn
                                           • X
                                           • Website
                                           • Books
                                           
                                           

                                           Andrew’s books

                                           • How to Start Building Your Wealth Investing in the Stock Market
                                           • My Worst Investment Ever
                                           • 9 Valuation Mistakes and How to Avoid Them
                                           • Transform Your Business with Dr.Deming’s 14 Points
                                           
                                           

                                           Andrew’s online programs

                                           • Valuation Master Class
                                           • The Become a Better Investor Community
                                           • How to Start Building Your Wealth Investing in the Stock Market
                                           • Finance Made Ridiculously Simple
                                           • FVMR Investing: Quantamental Investing Across the World
                                           • Become a Great Presenter and Increase Your Influence
                                           • Transform Your Business with Dr. Deming’s 14 Points
                                           • Achieve Your Goals
                                           
                                           

                                           Connect with Andrew Stotz:

                                           • astotz.com
                                           • LinkedIn
                                           • Facebook
                                           • Instagram
                                           • Threads
                                           • X
                                           • YouTube
                                           • My Worst Investment Ever Podcast
                                           
                                           ]]>e3ad1945-cf75-4afe-b9a4-7dbccc0a4517Tue, 11 Feb 2025 06:00:00 +070028:58falsefullJimmy Milliron - Lessons From Love, Money, and Missed OpportunitiesBIO: James “Jimmy” Milliron is Co-Founder & President of National Brokerage Atlantic, specializing in Wealth Enhancement, Estate Planning, and Asset Protection.

                                           STORY: Jimmy wanted to invest $100,000 in Bitcoin, but when he couldn’t find an easy way to do it, he bought a car instead.

                                           LEARNING: Research and learn all you can about investment opportunities before investing.

                                            

                                           “Don’t be afraid to pick up the phone and make a few calls. There’s nothing like picking up the phone and talking to a real person on the other end instead of just texting them.”

                                           Jimmy Milliron

                                            

                                           Guest profile

                                           James “Jimmy” Milliron is Co-Founder & President of National Brokerage Atlantic, specializing in Wealth Enhancement, Estate Planning, and Asset Protection. An insurance veteran, he previously served as Executive Vice President at NexTier Bank, building a $400 million premium finance portfolio. He holds a BA from VMI and various securities and insurance licenses.

                                           Worst investment ever

                                           Jimmy’s worst investment is a mix between marrying a second wife and buying a car in 2016. He invested many resources in his second marriage, but it did not last that long.

                                           When Jimmy married his second ex-wife, he wanted to invest about $100,000 in Bitcoin. But he was busy and did not have time to research and learn more about Bitcoin. When Jimmy could not find an easy way to do it, he purchased a car instead with that cash.

                                           Lessons learned

                                           • Go the extra mile in research and learning about investment opportunities before investing.
                                           • Consider all the investment options available.
                                           
                                           

                                           Actionable advice

                                           If you’re young, seek advice from a mentor or your parents about what they would do instead of arbitrarily investing in a make-me-feel-good investment. Their guidance can be invaluable in navigating the complex world of investments.

                                           Jimmy’s recommendations

                                           Jimmy recommends reading Donald Trump’s Art of the Deal as a valuable resource for negotiation and decision-making.

                                           No.1 goal for the next 12 months

                                           Jimmy’s number one goal for the next 12 months is losing weight.

                                           Parting words

                                            

                                           “Thank you very much. Andrew and I wish everyone well.”

                                           Jimmy Milliron

                                            

                                           [spp-transcript]

                                            

                                           Connect with Jimmy Milliron

                                           • LinkedIn
                                           • Website
                                           
                                           

                                           Andrew’s books

                                           • How to Start Building Your Wealth Investing in the Stock Market
                                           • My Worst Investment Ever
                                           • 9 Valuation Mistakes and How to Avoid Them
                                           • Transform Your Business with Dr.Deming’s 14 Points
                                           
                                           

                                           Andrew’s online programs

                                           • Valuation Master Class
                                           • The Become a Better Investor Community
                                           • How to Start Building Your Wealth Investing in the Stock Market
                                           • Finance Made Ridiculously Simple
                                           • FVMR Investing: Quantamental Investing Across the World
                                           • Become a Great Presenter and Increase Your Influence
                                           • Transform Your Business with Dr. Deming’s 14 Points
                                           • Achieve Your Goals
                                           
                                           

                                           Connect with Andrew Stotz:

                                           • astotz.com
                                           • LinkedIn
                                           • Facebook
                                           • Instagram
                                           • Threads
                                           • X
                                           • YouTube
                                           • My Worst Investment Ever Podcast
                                           
                                           ]]>BIO: James “Jimmy” Milliron is Co-Founder & President of National Brokerage Atlantic, specializing in Wealth Enhancement, Estate Planning, and Asset Protection.

                                           STORY: Jimmy wanted to invest $100,000 in Bitcoin, but when he couldn’t find an easy way to do it, he bought a car instead.

                                           LEARNING: Research and learn all you can about investment opportunities before investing.

                                            

                                           “Don’t be afraid to pick up the phone and make a few calls. There’s nothing like picking up the phone and talking to a real person on the other end instead of just texting them.”

                                           Jimmy Milliron

                                            

                                           Guest profile

                                           James “Jimmy” Milliron is Co-Founder & President of National Brokerage Atlantic, specializing in Wealth Enhancement, Estate Planning, and Asset Protection. An insurance veteran, he previously served as Executive Vice President at NexTier Bank, building a $400 million premium finance portfolio. He holds a BA from VMI and various securities and insurance licenses.

                                           Worst investment ever

                                           Jimmy’s worst investment is a mix between marrying a second wife and buying a car in 2016. He invested many resources in his second marriage, but it did not last that long.

                                           When Jimmy married his second ex-wife, he wanted to invest about $100,000 in Bitcoin. But he was busy and did not have time to research and learn more about Bitcoin. When Jimmy could not find an easy way to do it, he purchased a car instead with that cash.

                                           Lessons learned

                                           • Go the extra mile in research and learning about investment opportunities before investing.
                                           • Consider all the investment options available.
                                           
                                           

                                           Actionable advice

                                           If you’re young, seek advice from a mentor or your parents about what they would do instead of arbitrarily investing in a make-me-feel-good investment. Their guidance can be invaluable in navigating the complex world of investments.

                                           Jimmy’s recommendations

                                           Jimmy recommends reading Donald Trump’s Art of the Deal as a valuable resource for negotiation and decision-making.

                                           No.1 goal for the next 12 months

                                           Jimmy’s number one goal for the next 12 months is losing weight.

                                           Parting words

                                            

                                           “Thank you very much. Andrew and I wish everyone well.”

                                           Jimmy Milliron

                                            

                                           [spp-transcript]

                                            

                                           Connect with Jimmy Milliron

                                           • LinkedIn
                                           • Website
                                           
                                           

                                           Andrew’s books

                                           • How to Start Building Your Wealth Investing in the Stock Market
                                           • My Worst Investment Ever
                                           • 9 Valuation Mistakes and How to Avoid Them
                                           • Transform Your Business with Dr.Deming’s 14 Points
                                           
                                           

                                           Andrew’s online programs

                                           • Valuation Master Class
                                           • The Become a Better Investor Community
                                           • How to Start Building Your Wealth Investing in the Stock Market
                                           • Finance Made Ridiculously Simple
                                           • FVMR Investing: Quantamental Investing Across the World
                                           • Become a Great Presenter and Increase Your Influence
                                           • Transform Your Business with Dr. Deming’s 14 Points
                                           • Achieve Your Goals
                                           
                                           

                                           Connect with Andrew Stotz:

                                           • astotz.com
                                           • LinkedIn
                                           • Facebook
                                           • Instagram
                                           • Threads
                                           • X
                                           • YouTube
                                           • My Worst Investment Ever Podcast
                                           
                                           ]]>faedefe3-037f-47bf-9060-88eef26b0a66Tue, 04 Feb 2025 06:00:00 +070022:52falsefullEnrich Your Future 23: Seeing Through the Frame: Making Better Investment DecisionsIn this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 23: Framing the Problem.

                                           LEARNING: Understand how each indexed annuity feature works before buying one.

                                            

                                           “I would never buy an annuity that didn’t give me full inflation protection.”

                                           Larry Swedroe

                                            

                                           In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                           Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 23: Framing the Problem.

                                           Chapter 23: Framing the Problem

                                           In this chapter, Larry discusses how we, as human beings, are subject to biases and mistakes that we’re almost certainly not aware of. He introduces the concept of ‘framing’ in the context of behavioral finance, which refers to how a question or a problem is presented and how this presentation can influence our decision-making, often leading us to answer how the questioner wants us to.

                                           Examples of framing

                                           Larry shares the following examples from Jason Zweig’s book Your Money & Your Brain to support the theory of framing in decision-making. These examples illustrate how the same information, when presented in different ways, can lead to significantly different decisions, highlighting the impact of framing on our perceptions and choices.

                                           • A group of people was told ground beef was “75% lean.” Another was told the same meat was “25% fat.” The “fat” group estimated the meat would be 31% lower in quality and taste 22% worse than the “lean” group estimated.
                                           • Pregnant women are more willing to agree to amniocentesis if told they face a 20% chance of having a Down syndrome child than if told there is an 80% chance they will have a “normal” baby.
                                           • A study asked more than 400 doctors whether they would prefer radiation or surgery if they became cancer patients themselves. Among the physicians who were informed that 10% would die from surgery, 50% said they would prefer radiation. Among those who were told that 90% would survive the surgery, only 16% chose radiation.
                                           
                                           

                                           The evidence from the three examples shows that if a situation is framed from a negative viewpoint, people focus on that. On the other hand, if a problem is framed positively, the results are pretty different.

                                           The indexed annuities fallacy

                                           Larry Swedroe goes on to connect the concept of framing to investing, particularly in the context of indexed annuities. He explains how annuities are often presented with hidden costs and benefits, leading to misleading conclusions for investors.

                                           According to Larry, indexed annuities are products that salesmen describe as providing “the best of both worlds”—the potential rewards of equity investing without the downside risks. Unfortunately, indexed annuities contain many negative features, making them an unfavorable investment option.

                                           The SEC’s warning against indexed annuities

                                           Larry points out that the typical indexed annuity is so intricate and filled with negative features that it is challenging for most investors to fully comprehend. He highlights a bulletin warning issued by the SEC in July 2020, urging people to be cautious about investing in indexed annuities, fostering a sense of careful consideration.

                                           The bulletin advised investors to read the contract before buying an indexed annuity and, if the annuity is a security, to read the prospectus. Investors should understand how each feature works and what impact it and the other features may have on the annuity’s potential return. The SEC also suggested asking an insurance agent, broker, or other financial professional questions to understand how the annuity works.

                                           The agency also reminded investors that indexed annuity contracts commonly allow the insurance company to periodically change some of these features, such as the rate cap. Such changes can affect your return. So, read your contract carefully to determine what changes the insurance company may make to your annuity.

                                           So why do investors still love indexed annuities?

                                           Despite the negatives, why do investors continue to be drawn to this product, purchasing tens of billions year after year? Larry offers a straightforward explanation. The insurance industry presents the investment decision in a way that directs investors’ attention to the potential for significant gains, the principal protection, and the guaranteed minimum return offered by annuities, instilling a sense of hope.

                                           Further, all the products sold by the typical insurance company and Wall Street firms are laden with glitzy features. In each case, you’re paying an excessive fee to get that benefit, but they’re framing it, and you’re getting it without being told that the costs far exceed the mathematical odds of your getting it. This makes you lose sight of the costs and the lost upside potential. In other words, “you’ve been framed.”

                                           Better alternatives to indexed annuities

                                           Larry advises investors and financial advisors to frame problems in a way that allows for analysis from various perspectives. This is the best way to ensure investors consider all the pros and cons. He emphasizes that financial advisors can add value by understanding how human beings make mistakes and helping them avoid them, instilling a sense of responsibility.

                                           He also discusses alternative ways to create a similar financial outcome to annuities, such as investing in Treasury Inflation-Protected Securities (TIPS).

                                           Further reading

                                           1. Jason Zweig, Your Money & Your Brain (Simon & Schuster 2007), pp. 134–5.
                                           
                                           

                                           Did you miss out on the previous chapters? Check them out:

                                           Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                                           • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                           • Enrich Your Future 02: How Markets Set Prices
                                           • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                           • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                           • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                           • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                           • Enrich Your Future 07: The Value of Security Analysis
                                           • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                           • Enrich Your Future 09: The Fed Model and the Money Illusion
                                           
                                           

                                           Part II: Strategic Portfolio Decisions

                                           • In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 23: Framing the Problem.

                                             LEARNING: Understand how each indexed annuity feature works before buying one.

                                              

                                             “I would never buy an annuity that didn’t give me full inflation protection.”

                                             Larry Swedroe

                                              

                                             In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                             Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 23: Framing the Problem.

                                             Chapter 23: Framing the Problem

                                             In this chapter, Larry discusses how we, as human beings, are subject to biases and mistakes that we’re almost certainly not aware of. He introduces the concept of ‘framing’ in the context of behavioral finance, which refers to how a question or a problem is presented and how this presentation can influence our decision-making, often leading us to answer how the questioner wants us to.

                                             Examples of framing

                                             Larry shares the following examples from Jason Zweig’s book Your Money & Your Brain to support the theory of framing in decision-making. These examples illustrate how the same information, when presented in different ways, can lead to significantly different decisions, highlighting the impact of framing on our perceptions and choices.

                                             • A group of people was told ground beef was “75% lean.” Another was told the same meat was “25% fat.” The “fat” group estimated the meat would be 31% lower in quality and taste 22% worse than the “lean” group estimated.
                                             • Pregnant women are more willing to agree to amniocentesis if told they face a 20% chance of having a Down syndrome child than if told there is an 80% chance they will have a “normal” baby.
                                             • A study asked more than 400 doctors whether they would prefer radiation or surgery if they became cancer patients themselves. Among the physicians who were informed that 10% would die from surgery, 50% said they would prefer radiation. Among those who were told that 90% would survive the surgery, only 16% chose radiation.
                                             
                                             

                                             The evidence from the three examples shows that if a situation is framed from a negative viewpoint, people focus on that. On the other hand, if a problem is framed positively, the results are pretty different.

                                             The indexed annuities fallacy

                                             Larry Swedroe goes on to connect the concept of framing to investing, particularly in the context of indexed annuities. He explains how annuities are often presented with hidden costs and benefits, leading to misleading conclusions for investors.

                                             According to Larry, indexed annuities are products that salesmen describe as providing “the best of both worlds”—the potential rewards of equity investing without the downside risks. Unfortunately, indexed annuities contain many negative features, making them an unfavorable investment option.

                                             The SEC’s warning against indexed annuities

                                             Larry points out that the typical indexed annuity is so intricate and filled with negative features that it is challenging for most investors to fully comprehend. He highlights a bulletin warning issued by the SEC in July 2020, urging people to be cautious about investing in indexed annuities, fostering a sense of careful consideration.

                                             The bulletin advised investors to read the contract before buying an indexed annuity and, if the annuity is a security, to read the prospectus. Investors should understand how each feature works and what impact it and the other features may have on the annuity’s potential return. The SEC also suggested asking an insurance agent, broker, or other financial professional questions to understand how the annuity works.

                                             The agency also reminded investors that indexed annuity contracts commonly allow the insurance company to periodically change some of these features, such as the rate cap. Such changes can affect your return. So, read your contract carefully to determine what changes the insurance company may make to your annuity.

                                             So why do investors still love indexed annuities?

                                             Despite the negatives, why do investors continue to be drawn to this product, purchasing tens of billions year after year? Larry offers a straightforward explanation. The insurance industry presents the investment decision in a way that directs investors’ attention to the potential for significant gains, the principal protection, and the guaranteed minimum return offered by annuities, instilling a sense of hope.

                                             Further, all the products sold by the typical insurance company and Wall Street firms are laden with glitzy features. In each case, you’re paying an excessive fee to get that benefit, but they’re framing it, and you’re getting it without being told that the costs far exceed the mathematical odds of your getting it. This makes you lose sight of the costs and the lost upside potential. In other words, “you’ve been framed.”

                                             Better alternatives to indexed annuities

                                             Larry advises investors and financial advisors to frame problems in a way that allows for analysis from various perspectives. This is the best way to ensure investors consider all the pros and cons. He emphasizes that financial advisors can add value by understanding how human beings make mistakes and helping them avoid them, instilling a sense of responsibility.

                                             He also discusses alternative ways to create a similar financial outcome to annuities, such as investing in Treasury Inflation-Protected Securities (TIPS).

                                             Further reading

                                             1. Jason Zweig, Your Money & Your Brain (Simon & Schuster 2007), pp. 134–5.
                                             
                                             

                                             Did you miss out on the previous chapters? Check them out:

                                             Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                                             • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                             • Enrich Your Future 02: How Markets Set Prices
                                             • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                             • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                             • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                             • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                             • Enrich Your Future 07: The Value of Security Analysis
                                             • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                             • Enrich Your Future 09: The Fed Model and the Money Illusion
                                             
                                             

                                             Part II: Strategic Portfolio Decisions

                                             • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                             • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                                             • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                                             • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                                             • Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
                                             • Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
                                             • Enrich Your Future 16: The Estimated Return Is Not Inevitable
                                             • Enrich Your Future 17: Take a Portfolio Approach to Your Investments
                                             • Enrich Your Future 18: Build a Portfolio That Can Withstand the Black Swans
                                             • Enrich Your Future 19: The Gold Illusion: Why Investing in Gold May Not Be Safe
                                             • Enrich Your Future 20: Passive Investing Is the Key to Prudent Wealth Management
                                             
                                             

                                             Part III: Behavioral Finance: We Have Met the Enemy and He Is Us

                                             • Enrich Your Future 21: Think You Can Beat the Market? Think Again
                                             • Enrich Your Future 22: Some Risks Are Not Worth Taking
                                             
                                             

                                             About Larry Swedroe

                                             Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                             Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                             Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                             Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                              

                                             [spp-transcript]

                                              

                                             Connect with Larry Swedroe

                                             • LinkedIn
                                             • X
                                             • Website
                                             • Books
                                             
                                             

                                             Andrew’s books

                                             • How to Start Building Your Wealth Investing in the Stock Market
                                             • My Worst Investment Ever
                                             • 9 Valuation Mistakes and How to Avoid Them
                                             • Transform Your Business with Dr.Deming’s 14 Points
                                             
                                             

                                             Andrew’s online programs

                                             • Valuation Master Class
                                             • The Become a Better Investor Community
                                             • How to Start Building Your Wealth Investing in the Stock Market
                                             • Finance Made Ridiculously Simple
                                             • FVMR Investing: Quantamental Investing Across the World
                                             • Become a Great Presenter and Increase Your Influence
                                             • Transform Your Business with Dr. Deming’s 14 Points
                                             • Achieve Your Goals
                                             
                                             

                                             Connect with Andrew Stotz:

                                             • astotz.com
                                             • LinkedIn
                                             • Facebook
                                             • Instagram
                                             • Threads
                                             • X
                                             • YouTube
                                             • My Worst Investment Ever Podcast
                                             
                                             ]]>c5c1c9ca-eab7-433b-98be-b51c0066afc3Tue, 28 Jan 2025 06:00:00 +070021:50falsefullMitch Russo - Sell It First Before You Build ItBIO: Mitch Russo is a serial entrepreneur who built and sold his first software company for eight figures, scaled a $25M business with Tony Robbins and Chet Holmes, and was twice nominated for Inc. Entrepreneur of the Year.

                                             STORY: Mitch bought several Amazon stores to make passive income, which he did for a while. Unfortunately, the lucky streak ended after Amazon significantly reduced the commissions it paid to its resellers, and Google changed its algorithm. Now, Mitch’s SEO pages were not working, and nobody was finding them.

                                             LEARNING: Never start a business without knowing who will buy the product. Try to sell your product/service before you build it.

                                              

                                             “Please do not create a product until you understand exactly what the client needs. Try and sell it first before you build it.”

                                             Mitch Russo

                                              

                                             Guest profile

                                             Mitch Russo is a serial entrepreneur who built and sold his first software company for eight figures, scaled a $25M business with Tony Robbins and Chet Holmes, and was twice nominated for Inc. Entrepreneur of the Year. He’s the author of four books and the creator of ClientFol.io.

                                             Worst investment ever

                                             Mitch highlighted two particular investments that have left a lasting mark on his life as an investor.

                                             The Amazon stores

                                             A couple of years ago, Mitch embarked on an exhilarating journey to create recurring revenue by investing in businesses that required minimal participation. The Amazon stores, a hot trend at the time, became his focus. With significant investments, these stores flourished, and Mitch was able to generate a substantial monthly income of $18,000 to $20,000, almost passively.

                                             Then the whole thing came crashing down. Two things happened simultaneously: Amazon significantly reduced the commissions it paid to its resellers, and Google changed its algorithm. Now, Mitch’s SEO pages were not working, and nobody was finding them.

                                             The peer-to-peer accountability platform

                                             Mitch created an earlier version of ClientFol.io called resultsbreakthrough.com, a peer-to-peer accountability platform. Mitch had to invent some technology to do it. At the time, the platform worked fantastic.

                                             To succeed with the the peer-to-peer accountability platform, Mitch poured his heart and soul into it. He was deeply passionate about what he had created. However, the platform did not receive the response he had hoped for. Despite his belief in the platform’s potential, it remained unsold, a stark reminder that success is not guaranteed, no matter how brilliant the idea.

                                             Lessons learned

                                             • Never start a business without knowing who will buy the product first.
                                             • Try to sell your product/service before you build it.
                                             • It’s never over until you quit.
                                             • Hire a coach to accelerate business growth and learn valuable lessons quickly.
                                             
                                             

                                             Andrew’s takeaways

                                             • Solving a problem is not enough; you must ensure your target customer can pay for the product. Is the pain valuable enough that they’ll pay high enough prices?
                                             
                                             

                                             Actionable advice

                                             • If you are smart and you can see what’s happening around you, you can make almost any mistake, recover from it, learn from it, and grow from it.
                                             
                                             

                                             Mitch’s recommendations

                                             Mitch recommends reading Crossing the Chasm, which beautifully encapsulates the power of focus.

                                             No.1 goal for the next 12 months

                                             Mitch’s number one goal for the next 12 months is to continue building recurring revenue through internet processes and funnels, a path he is deeply passionate about. Additionally, he is on the verge of publishing two fiction books, one of which he believes will be adapted into a movie. He is actively working to lay the groundwork for this promising future.

                                             Parting words

                                              

                                             “Keep on tracking.”

                                             Mitch Russo

                                              

                                             [spp-transcript]

                                              

                                             Connect with Mitch Russo

                                             • LinkedIn
                                             • X
                                             • Facebook
                                             • Instagram
                                             • Website
                                             • Podcast
                                             • Books
                                             
                                             

                                             Andrew’s books

                                             • How to Start Building Your Wealth Investing in the Stock Market
                                             • My Worst Investment Ever
                                             • 9 Valuation Mistakes and How to Avoid Them
                                             • Transform Your Business with Dr.Deming’s 14 Points
                                             
                                             

                                             Andrew’s online programs

                                             • Valuation Master Class
                                             • The Become a Better Investor Community
                                             • How to Start Building Your Wealth Investing in the Stock Market
                                             • Finance Made Ridiculously Simple
                                             • FVMR Investing: Quantamental Investing Across the World
                                             • Become a Great Presenter and Increase Your Influence
                                             • Transform Your Business with Dr. Deming’s 14 Points
                                             • Achieve Your Goals
                                             
                                             

                                             Connect with Andrew Stotz:

                                             • astotz.com
                                             • LinkedIn
                                             • Facebook
                                             • Instagram
                                             • Threads
                                             • X
                                             • YouTube
                                             • My Worst Investment Ever Podcast
                                             
                                             ]]>BIO: Mitch Russo is a serial entrepreneur who built and sold his first software company for eight figures, scaled a $25M business with Tony Robbins and Chet Holmes, and was twice nominated for Inc. Entrepreneur of the Year.

                                             STORY: Mitch bought several Amazon stores to make passive income, which he did for a while. Unfortunately, the lucky streak ended after Amazon significantly reduced the commissions it paid to its resellers, and Google changed its algorithm. Now, Mitch’s SEO pages were not working, and nobody was finding them.

                                             LEARNING: Never start a business without knowing who will buy the product. Try to sell your product/service before you build it.

                                              

                                             “Please do not create a product until you understand exactly what the client needs. Try and sell it first before you build it.”

                                             Mitch Russo

                                              

                                             Guest profile

                                             Mitch Russo is a serial entrepreneur who built and sold his first software company for eight figures, scaled a $25M business with Tony Robbins and Chet Holmes, and was twice nominated for Inc. Entrepreneur of the Year. He’s the author of four books and the creator of ClientFol.io.

                                             Worst investment ever

                                             Mitch highlighted two particular investments that have left a lasting mark on his life as an investor.

                                             The Amazon stores

                                             A couple of years ago, Mitch embarked on an exhilarating journey to create recurring revenue by investing in businesses that required minimal participation. The Amazon stores, a hot trend at the time, became his focus. With significant investments, these stores flourished, and Mitch was able to generate a substantial monthly income of $18,000 to $20,000, almost passively.

                                             Then the whole thing came crashing down. Two things happened simultaneously: Amazon significantly reduced the commissions it paid to its resellers, and Google changed its algorithm. Now, Mitch’s SEO pages were not working, and nobody was finding them.

                                             The peer-to-peer accountability platform

                                             Mitch created an earlier version of ClientFol.io called resultsbreakthrough.com, a peer-to-peer accountability platform. Mitch had to invent some technology to do it. At the time, the platform worked fantastic.

                                             To succeed with the the peer-to-peer accountability platform, Mitch poured his heart and soul into it. He was deeply passionate about what he had created. However, the platform did not receive the response he had hoped for. Despite his belief in the platform’s potential, it remained unsold, a stark reminder that success is not guaranteed, no matter how brilliant the idea.

                                             Lessons learned

                                             • Never start a business without knowing who will buy the product first.
                                             • Try to sell your product/service before you build it.
                                             • It’s never over until you quit.
                                             • Hire a coach to accelerate business growth and learn valuable lessons quickly.
                                             
                                             

                                             Andrew’s takeaways

                                             • Solving a problem is not enough; you must ensure your target customer can pay for the product. Is the pain valuable enough that they’ll pay high enough prices?
                                             
                                             

                                             Actionable advice

                                             • If you are smart and you can see what’s happening around you, you can make almost any mistake, recover from it, learn from it, and grow from it.
                                             
                                             

                                             Mitch’s recommendations

                                             Mitch recommends reading Crossing the Chasm, which beautifully encapsulates the power of focus.

                                             No.1 goal for the next 12 months

                                             Mitch’s number one goal for the next 12 months is to continue building recurring revenue through internet processes and funnels, a path he is deeply passionate about. Additionally, he is on the verge of publishing two fiction books, one of which he believes will be adapted into a movie. He is actively working to lay the groundwork for this promising future.

                                             Parting words

                                              

                                             “Keep on tracking.”

                                             Mitch Russo

                                              

                                             [spp-transcript]

                                              

                                             Connect with Mitch Russo

                                             • LinkedIn
                                             • X
                                             • Facebook
                                             • Instagram
                                             • Website
                                             • Podcast
                                             • Books
                                             
                                             

                                             Andrew’s books

                                             • How to Start Building Your Wealth Investing in the Stock Market
                                             • My Worst Investment Ever
                                             • 9 Valuation Mistakes and How to Avoid Them
                                             • Transform Your Business with Dr.Deming’s 14 Points
                                             
                                             

                                             Andrew’s online programs

                                             • Valuation Master Class
                                             • The Become a Better Investor Community
                                             • How to Start Building Your Wealth Investing in the Stock Market
                                             • Finance Made Ridiculously Simple
                                             • FVMR Investing: Quantamental Investing Across the World
                                             • Become a Great Presenter and Increase Your Influence
                                             • Transform Your Business with Dr. Deming’s 14 Points
                                             • Achieve Your Goals
                                             
                                             

                                             Connect with Andrew Stotz:

                                             • astotz.com
                                             • LinkedIn
                                             • Facebook
                                             • Instagram
                                             • Threads
                                             • X
                                             • YouTube
                                             • My Worst Investment Ever Podcast
                                             
                                             ]]>5c62d861-e28e-49c5-90df-b3e5ac462e6cTue, 21 Jan 2025 06:00:00 +070043:41falsefullEnrich Your Future 22: Some Risks Are Not Worth TakingIn this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 22: Some Risks are Not Worth Taking.

                                             LEARNING: Don’t put all your eggs in one basket; diversify your portfolio.

                                              

                                             “Once you have enough to live a high-quality life and enjoy things, taking unwarranted risks becomes unnecessary.”

                                             Larry Swedroe

                                              

                                             In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                             Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 22: Some Risks are Not Worth Taking.

                                             Chapter 22: Some Risks Are Not Worth Taking

                                             In this chapter, Larry discusses the importance of investors knowing which risks are worth taking and which are not.

                                             The $10 million bet that almost didn’t pay off

                                             To kick off this episode, Larry shared a story of an executive who put his entire $10 million portfolio in one stock.

                                             Around the late 1999 and early 2000s, Larry was a consultant to a registered investment advisor in Atlanta, and one of their clients was a very senior Intel executive. This executive’s net worth was about $13 million, and $10 million was an Intel stock. To Larry’s shock, the executive would not consider selling even a small%age of his stock to diversify his portfolio. He was confident that this stock was the best company despite acknowledging the risks of this concentrated strategy. It was, in fact, the NVIDIA of its day. It was trading at spectacular levels. The executive had watched it go up and up and up.

                                             Learning from the past

                                             Larry pointed out that there were similar situations not long ago, from the 60s, for example, when we had the Nifty 50 bubble, and, once great companies like Xerox, Polaroid Kodak, and many others disappeared, and these were among the leading stocks.

                                             Like this executive, many had invested all their money in a single company and had seen their net worth suffer greatly when these companies crumbled.

                                             This history serves as a powerful lesson, enlightening us about the risks of overconfidence and the importance of diversification.

                                             The Intel stock comes tumbling down

                                             Since he was a senior executive, he believed he would know if Intel was ever in trouble. Larry went ahead and told him some risks were not worth taking. He advised him to sell most of his stock and build a nice, safe, diversified portfolio, mostly even bonds.

                                             The executive could withdraw half a million bucks a year from it pretty safely because interest rates were higher, and that was far more than he needed. Larry’s advice didn’t matter—he couldn’t convince him.

                                             Within two and a half years, Intel’s stock was trading at about $10, falling about 75%. It was not until late in 2017 that it once again reached $40.

                                             Some risks are just not worth taking

                                             Over the period from March 2000 through September 2020, while an investment in Vanguard’s 500 Index Fund (VFINX) returned 6.4% per annum, Intel returned just 1.8% per annum. This stark contrast highlights the consequences of overconfidence and the importance of diversification, making it clear that some risks are simply not worth taking.

                                             Overconfidence blurs out the risk

                                             Larry advises against such overconfidence, stressing the importance of considering the consequences of being wrong. He points out that investing is about taking risks. However, prudent investors know some risks are worth taking, and some are not. And they know the difference.

                                             Thus, Larry adds, when the cost of a negative outcome is greater than you can bear, you should not take the risk, no matter how great the odds appear to be of a favorable outcome. In other words, the consequences of your investment decisions should dominate the probabilities, no matter how favorable you think the odds are.

                                             Marginal utility of wealth

                                             Larry also discusses the marginal utility of wealth, explaining that once basic needs are met, additional wealth provides little extra value. He argues that taking unwarranted risks becomes unnecessary once you have enough to live comfortably.

                                             Larry emphasizes the importance of considering both the ability to take risks and the potential consequences of being wrong. He explains that while youth provides a longer investment horizon, the cost of being wrong is higher when young. He recommends a balanced approach that includes some risk-taking and a stable investment plan, encouraging the audience to think carefully about their investment strategies.

                                             Further reading

                                             1. Laurence Gonzalez, Deep Survival (W. W. Norton & Company, October 2003).
                                             2. Wall Street Journal, “Portrait of a Loss: Chicago Art Institute Learns Tough Lesson About Hedge Funds,” (February 1, 2002).
                                             
                                             

                                             Did you miss out on the previous chapters? Check them out:

                                             Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                                             • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                             • Enrich Your Future 02: How Markets Set Prices
                                             • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                             • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                             • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                             • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                             • Enrich Your Future 07: The Value of Security Analysis
                                             • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                             • Enrich Your Future 09: The Fed Model and the Money Illusion
                                             
                                             

                                             Part II: Strategic Portfolio Decisions

                                             • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                             • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                                             • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                                             • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                                             • Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
                                             • Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
                                             • In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 22: Some Risks are Not Worth Taking.

                                               LEARNING: Don’t put all your eggs in one basket; diversify your portfolio.

                                                

                                               “Once you have enough to live a high-quality life and enjoy things, taking unwarranted risks becomes unnecessary.”

                                               Larry Swedroe

                                                

                                               In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                               Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 22: Some Risks are Not Worth Taking.

                                               Chapter 22: Some Risks Are Not Worth Taking

                                               In this chapter, Larry discusses the importance of investors knowing which risks are worth taking and which are not.

                                               The $10 million bet that almost didn’t pay off

                                               To kick off this episode, Larry shared a story of an executive who put his entire $10 million portfolio in one stock.

                                               Around the late 1999 and early 2000s, Larry was a consultant to a registered investment advisor in Atlanta, and one of their clients was a very senior Intel executive. This executive’s net worth was about $13 million, and $10 million was an Intel stock. To Larry’s shock, the executive would not consider selling even a small%age of his stock to diversify his portfolio. He was confident that this stock was the best company despite acknowledging the risks of this concentrated strategy. It was, in fact, the NVIDIA of its day. It was trading at spectacular levels. The executive had watched it go up and up and up.

                                               Learning from the past

                                               Larry pointed out that there were similar situations not long ago, from the 60s, for example, when we had the Nifty 50 bubble, and, once great companies like Xerox, Polaroid Kodak, and many others disappeared, and these were among the leading stocks.

                                               Like this executive, many had invested all their money in a single company and had seen their net worth suffer greatly when these companies crumbled.

                                               This history serves as a powerful lesson, enlightening us about the risks of overconfidence and the importance of diversification.

                                               The Intel stock comes tumbling down

                                               Since he was a senior executive, he believed he would know if Intel was ever in trouble. Larry went ahead and told him some risks were not worth taking. He advised him to sell most of his stock and build a nice, safe, diversified portfolio, mostly even bonds.

                                               The executive could withdraw half a million bucks a year from it pretty safely because interest rates were higher, and that was far more than he needed. Larry’s advice didn’t matter—he couldn’t convince him.

                                               Within two and a half years, Intel’s stock was trading at about $10, falling about 75%. It was not until late in 2017 that it once again reached $40.

                                               Some risks are just not worth taking

                                               Over the period from March 2000 through September 2020, while an investment in Vanguard’s 500 Index Fund (VFINX) returned 6.4% per annum, Intel returned just 1.8% per annum. This stark contrast highlights the consequences of overconfidence and the importance of diversification, making it clear that some risks are simply not worth taking.

                                               Overconfidence blurs out the risk

                                               Larry advises against such overconfidence, stressing the importance of considering the consequences of being wrong. He points out that investing is about taking risks. However, prudent investors know some risks are worth taking, and some are not. And they know the difference.

                                               Thus, Larry adds, when the cost of a negative outcome is greater than you can bear, you should not take the risk, no matter how great the odds appear to be of a favorable outcome. In other words, the consequences of your investment decisions should dominate the probabilities, no matter how favorable you think the odds are.

                                               Marginal utility of wealth

                                               Larry also discusses the marginal utility of wealth, explaining that once basic needs are met, additional wealth provides little extra value. He argues that taking unwarranted risks becomes unnecessary once you have enough to live comfortably.

                                               Larry emphasizes the importance of considering both the ability to take risks and the potential consequences of being wrong. He explains that while youth provides a longer investment horizon, the cost of being wrong is higher when young. He recommends a balanced approach that includes some risk-taking and a stable investment plan, encouraging the audience to think carefully about their investment strategies.

                                               Further reading

                                               1. Laurence Gonzalez, Deep Survival (W. W. Norton & Company, October 2003).
                                               2. Wall Street Journal, “Portrait of a Loss: Chicago Art Institute Learns Tough Lesson About Hedge Funds,” (February 1, 2002).
                                               
                                               

                                               Did you miss out on the previous chapters? Check them out:

                                               Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                                               • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                               • Enrich Your Future 02: How Markets Set Prices
                                               • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                               • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                               • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                               • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                               • Enrich Your Future 07: The Value of Security Analysis
                                               • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                               • Enrich Your Future 09: The Fed Model and the Money Illusion
                                               
                                               

                                               Part II: Strategic Portfolio Decisions

                                               • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                               • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                                               • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                                               • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                                               • Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
                                               • Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
                                               • Enrich Your Future 16: The Estimated Return Is Not Inevitable
                                               • Enrich Your Future 17: Take a Portfolio Approach to Your Investments
                                               • Enrich Your Future 18: Build a Portfolio That Can Withstand the Black Swans
                                               • Enrich Your Future 19: The Gold Illusion: Why Investing in Gold May Not Be Safe
                                               • Enrich Your Future 20: Passive Investing Is the Key to Prudent Wealth Management
                                               
                                               

                                               Part III: Behavioral Finance: We Have Met the Enemy and He Is Us

                                               • Enrich Your Future 21: Think You Can Beat the Market? Think Again
                                               
                                               

                                               About Larry Swedroe

                                               Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                               Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                               Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                               Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                

                                               [spp-transcript]

                                                

                                               Connect with Larry Swedroe

                                               • LinkedIn
                                               • X
                                               • Website
                                               • Books
                                               
                                               

                                               Andrew’s books

                                               • How to Start Building Your Wealth Investing in the Stock Market
                                               • My Worst Investment Ever
                                               • 9 Valuation Mistakes and How to Avoid Them
                                               • Transform Your Business with Dr.Deming’s 14 Points
                                               
                                               

                                               Andrew’s online programs

                                               • Valuation Master Class
                                               • The Become a Better Investor Community
                                               • How to Start Building Your Wealth Investing in the Stock Market
                                               • Finance Made Ridiculously Simple
                                               • FVMR Investing: Quantamental Investing Across the World
                                               • Become a Great Presenter and Increase Your Influence
                                               • Transform Your Business with Dr. Deming’s 14 Points
                                               • Achieve Your Goals
                                               
                                               

                                               Connect with Andrew Stotz:

                                               • astotz.com
                                               • LinkedIn
                                               • Facebook
                                               • Instagram
                                               • Threads
                                               • X
                                               • YouTube
                                               • My Worst Investment Ever Podcast
                                               
                                               ]]>e438c56a-88da-4ece-9ae5-587153c64ce5Tue, 14 Jan 2025 06:00:00 +070018:28falsefullCraig Cecilio - From Trust to Turmoil: Lesson on Friendship and BusinessBIO: Craig Cecilio is a visionary disruptor and CEO of DiversyFund, dedicated to democratizing wealth building. He has broken barriers in private markets, raising over $1 billion and offering investment opportunities once reserved for the elite.

                                               STORY: Craig had a potential business partner introduced to him by a friend. The partner had a land deal and convinced Craig to invest $10,000. A couple of other people joined in and deposited about $250,000 into the land development deal in New Mexico. A week went by, and the investors got ghosted by the land deal owner.

                                               LEARNING: Don’t mix friendship with business. Do your due diligence on all the parties involved in the transaction.

                                                

                                               “Assume everybody is a crook and work backward. That’s the key to underwriting and any investment.”

                                               Craig Cecilio

                                                

                                               Guest profile

                                               Craig Cecilio is a visionary disruptor and CEO of DiversyFund, dedicated to democratizing wealth-building. He has broken barriers in private markets, raising over $1 billion and offering investment opportunities once reserved for the elite. Craig empowers others to reclaim financial control and make meaningful, lasting impact.

                                               DiversyFund offers a unique opportunity to invest in multifamily real estate, making wealth-building accessible to everyone. By investing in DiversyFund, your audience can take part in a diversified real estate portfolio typically reserved for high-net-worth investors—no accreditation needed.

                                               Worst investment ever

                                               Craig had a potential business partner, and they were doing a land deal. The partner always liked to chase big deals, while Craig is a singles hitter. However, he decided to invest $10,000 in this deal. A couple of other people joined the deal and deposited about $250,000 into the land development deal in New Mexico. A week went by, and the investors got ghosted by the land deal owner.

                                               Realizing the gravity of the situation, Craig took it upon himself to investigate the deal. He delved into the intricacies of the financial system, learning about wire transfers and the sequence of events. His thorough examination of the circumstances and the paperwork revealed crucial oversights in basic information and essential due diligence items.

                                               While Craig lost $10,000, losing that potential partner and the trust was the biggest loss. Craig had to sever that relationship as well.

                                               Lessons learned

                                               • When underwriting, ensure all the boxes get checked, and ask those questions a little more.
                                               • Don’t mix friendship with business.
                                               
                                               

                                               Andrew’s takeaways

                                               • Before you transfer any money, stop and go through a checklist to make sure you know what you are doing. You have to assume that once it’s gone, it’s gone.
                                               
                                               

                                               Actionable advice

                                               • Do your due diligence on all the parties involved in the transaction, and if it sounds too good to be true, it is not.
                                               • Assume everybody is the crook and work backward. That’s the key to underwriting and any investment.
                                               
                                               

                                               Craig’s recommendations

                                               Craig recommends checking out the online courses he plans to launch next month. He also recommends his upcoming book, You Know What You Got To Do.

                                               No.1 goal for the next 12 months

                                               Craig’s number one goal for the next 12 months is to launch his online courses. He also plans to put them on the map.

                                               Parting words

                                                

                                               “Just get started. Lean into it and get started. Take the first step. Read about it. You have so many tools in your hand. So just get started.”

                                               Craig Cecilio

                                                

                                               [spp-transcript]

                                                

                                               Connect with Craig Cecilio

                                               • LinkedIn
                                               • Instagram
                                               • Website
                                               
                                               

                                               Andrew’s books

                                               • How to Start Building Your Wealth Investing in the Stock Market
                                               • My Worst Investment Ever
                                               • 9 Valuation Mistakes and How to Avoid Them
                                               • Transform Your Business with Dr.Deming’s 14 Points
                                               
                                               

                                               Andrew’s online programs

                                               • Valuation Master Class
                                               • The Become a Better Investor Community
                                               • How to Start Building Your Wealth Investing in the Stock Market
                                               • Finance Made Ridiculously Simple
                                               • FVMR Investing: Quantamental Investing Across the World
                                               • Become a Great Presenter and Increase Your Influence
                                               • Transform Your Business with Dr. Deming’s 14 Points
                                               • Achieve Your Goals
                                               
                                               

                                               Connect with Andrew Stotz:

                                               • astotz.com
                                               • LinkedIn
                                               • Facebook
                                               • Instagram
                                               • Threads
                                               • X
                                               • YouTube
                                               • My Worst Investment Ever Podcast
                                               
                                               ]]>BIO: Craig Cecilio is a visionary disruptor and CEO of DiversyFund, dedicated to democratizing wealth building. He has broken barriers in private markets, raising over $1 billion and offering investment opportunities once reserved for the elite.

                                               STORY: Craig had a potential business partner introduced to him by a friend. The partner had a land deal and convinced Craig to invest $10,000. A couple of other people joined in and deposited about $250,000 into the land development deal in New Mexico. A week went by, and the investors got ghosted by the land deal owner.

                                               LEARNING: Don’t mix friendship with business. Do your due diligence on all the parties involved in the transaction.

                                                

                                               “Assume everybody is a crook and work backward. That’s the key to underwriting and any investment.”

                                               Craig Cecilio

                                                

                                               Guest profile

                                               Craig Cecilio is a visionary disruptor and CEO of DiversyFund, dedicated to democratizing wealth-building. He has broken barriers in private markets, raising over $1 billion and offering investment opportunities once reserved for the elite. Craig empowers others to reclaim financial control and make meaningful, lasting impact.

                                               DiversyFund offers a unique opportunity to invest in multifamily real estate, making wealth-building accessible to everyone. By investing in DiversyFund, your audience can take part in a diversified real estate portfolio typically reserved for high-net-worth investors—no accreditation needed.

                                               Worst investment ever

                                               Craig had a potential business partner, and they were doing a land deal. The partner always liked to chase big deals, while Craig is a singles hitter. However, he decided to invest $10,000 in this deal. A couple of other people joined the deal and deposited about $250,000 into the land development deal in New Mexico. A week went by, and the investors got ghosted by the land deal owner.

                                               Realizing the gravity of the situation, Craig took it upon himself to investigate the deal. He delved into the intricacies of the financial system, learning about wire transfers and the sequence of events. His thorough examination of the circumstances and the paperwork revealed crucial oversights in basic information and essential due diligence items.

                                               While Craig lost $10,000, losing that potential partner and the trust was the biggest loss. Craig had to sever that relationship as well.

                                               Lessons learned

                                               • When underwriting, ensure all the boxes get checked, and ask those questions a little more.
                                               • Don’t mix friendship with business.
                                               
                                               

                                               Andrew’s takeaways

                                               • Before you transfer any money, stop and go through a checklist to make sure you know what you are doing. You have to assume that once it’s gone, it’s gone.
                                               
                                               

                                               Actionable advice

                                               • Do your due diligence on all the parties involved in the transaction, and if it sounds too good to be true, it is not.
                                               • Assume everybody is the crook and work backward. That’s the key to underwriting and any investment.
                                               
                                               

                                               Craig’s recommendations

                                               Craig recommends checking out the online courses he plans to launch next month. He also recommends his upcoming book, You Know What You Got To Do.

                                               No.1 goal for the next 12 months

                                               Craig’s number one goal for the next 12 months is to launch his online courses. He also plans to put them on the map.

                                               Parting words

                                                

                                               “Just get started. Lean into it and get started. Take the first step. Read about it. You have so many tools in your hand. So just get started.”

                                               Craig Cecilio

                                                

                                               [spp-transcript]

                                                

                                               Connect with Craig Cecilio

                                               • LinkedIn
                                               • Instagram
                                               • Website
                                               
                                               

                                               Andrew’s books

                                               • How to Start Building Your Wealth Investing in the Stock Market
                                               • My Worst Investment Ever
                                               • 9 Valuation Mistakes and How to Avoid Them
                                               • Transform Your Business with Dr.Deming’s 14 Points
                                               
                                               

                                               Andrew’s online programs

                                               • Valuation Master Class
                                               • The Become a Better Investor Community
                                               • How to Start Building Your Wealth Investing in the Stock Market
                                               • Finance Made Ridiculously Simple
                                               • FVMR Investing: Quantamental Investing Across the World
                                               • Become a Great Presenter and Increase Your Influence
                                               • Transform Your Business with Dr. Deming’s 14 Points
                                               • Achieve Your Goals
                                               
                                               

                                               Connect with Andrew Stotz:

                                               • astotz.com
                                               • LinkedIn
                                               • Facebook
                                               • Instagram
                                               • Threads
                                               • X
                                               • YouTube
                                               • My Worst Investment Ever Podcast
                                               
                                               ]]>f506059c-bcfb-434a-adc1-6dc9cb6c0d6fThu, 19 Dec 2024 06:00:00 +070022:44falsefullEnrich Your Future 21: Think You Can Beat the Market? Think AgainIn this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 21: You Can’t Handle the Truth.

                                               LEARNING: Overconfidence leads to poor investment decisions. Measure your returns against benchmarks.

                                                

                                               “If you think you can forecast the future better than others, you’re going to ignore risks that you shouldn’t ignore because you’ll treat the unlikely as possible.”

                                               Larry Swedroe

                                                

                                               In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                               Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 21: You Can’t Handle the Truth.

                                               Chapter 21: You Can’t Handle the Truth

                                               In this chapter, Larry discusses how investors delude themselves about their skills and performance, leading to persistent and costly investment mistakes.

                                               The deluded investor

                                               According to Larry, evidence from the field of behavioral finance suggests that investors persist in deluding themselves about their skills and performance. This persistent self-deception leads to costly investment mistakes, emphasizing the need for continuous vigilance in investment decisions.

                                               Larry quotes a New York Times article in which professors Richard Thaler and Robert Shiller noted that individual investors and money managers persist in believing that they are endowed with more and better information than others and can profit by picking stocks. This insight helps explain why individual investors think they can:

                                               • Pick stocks that will outperform the market.
                                               • Time the market, so they’re in it when it’s rising and out of it when it’s falling.
                                               • Identify the few active managers who will beat their respective benchmarks.
                                               
                                               

                                               The overconfident investor

                                               Larry adds that even when individuals acknowledge the difficulty of beating the market, they are buoyed by the hope of success. He quotes noted economist Peter Bernstein: “Active management is extraordinarily difficult because there are so many knowledgeable investors and information does move so fast. The market is hard to beat. There are a lot of smart people trying to do the same thing. Nobody’s saying that it’s easy. But possible? Yes.”

                                               This slim possibility keeps hope alive. Overconfidence, fueled by this hope, leads investors to believe they will be among the few who succeed.

                                               Why investors spend so much time and money on actively managed mutual funds

                                               Larry also examined another study, Positive Illusions and Forecasting Errors in Mutual Fund Investment Decisions, which sought to find out why investors spend so much time and money on actively managed mutual funds despite passively managed index funds outperforming the vast majority of these funds.

                                               The authors concluded that the reason was that investors deluded themselves. They found that most participants had consistently overestimated their investments’ future and past performance.

                                               In fact, more than a third who believed they had beaten the market had actually underperformed by at least 5 percent, and at least a fourth lagged by at least 15 percent. Biases such as this contribute to suboptimal investment decisions.

                                               You are better off accepting market returns

                                               While Larry agrees that it is undoubtedly possible for investors to outperform the market, the evidence demonstrates that the vast majority would be better off aligning their expectations with reality and simply accepting market returns.

                                               At the very least, investors should know the odds of outperforming. Unfortunately, most investors delude themselves about those odds, highlighting the necessity of aligning expectations with reality.

                                               One reason, Larry says, might be that investors are unaware of the evidence. Another is that they don’t know their own track records. Larry notes that this self-delusion helps explain why investors exhibit the common human trait of overconfidence.

                                               Most people want to believe they are above average. Thus, the disconnect investors have between reality and illusion persists.

                                               Always measure your investment returns

                                               In conclusion, Larry advises investors to measure their investment returns and compare them to appropriate benchmarks. Doing so will force you to confront reality rather than allow an illusion to undermine your ability to achieve your financial objectives.

                                               Further reading

                                               1. Jason Zweig, Your Money & Your Brain, (Simon & Schuster 2007).
                                               2. Jonathan Fuerbringer, “Why Both Bulls and Bears Can Act So Bird-Brained,” New York Times, March 30, 1997.
                                               3. Jonathan Burton, Investment Titans, (McGraw-Hill, 2000).
                                               4. Money, “Did You Beat the Market?” (January 1, 2000).
                                               5. Don A. Moore, Terri R. Kurtzberg, Craig R. Fox, and Max H. Bazerman, “Positive Illusions and Forecasting Errors in Mutual Fund Investment Decisions,” Harvard Business School Working Paper.
                                               6. Markus Glaser and Martin Weber, “Why Inexperienced Investors Do Not Learn: They Don’t Know Their Past Portfolio Performance,” (July 21, 2007).
                                               
                                               

                                               Did you miss out on the previous chapters? Check them out:

                                               Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                                               • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                               • Enrich Your Future 02: How Markets Set Prices
                                               • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                               • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                               • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                               • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                               • Enrich Your Future 07: The Value of Security Analysis
                                               • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                               • Enrich Your Future 09: The Fed Model and the Money Illusion
                                               
                                               

                                               Part II: Strategic Portfolio Decisions

                                               • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                               • In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 21: You Can’t Handle the Truth.

                                                 LEARNING: Overconfidence leads to poor investment decisions. Measure your returns against benchmarks.

                                                  

                                                 “If you think you can forecast the future better than others, you’re going to ignore risks that you shouldn’t ignore because you’ll treat the unlikely as possible.”

                                                 Larry Swedroe

                                                  

                                                 In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                 Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 21: You Can’t Handle the Truth.

                                                 Chapter 21: You Can’t Handle the Truth

                                                 In this chapter, Larry discusses how investors delude themselves about their skills and performance, leading to persistent and costly investment mistakes.

                                                 The deluded investor

                                                 According to Larry, evidence from the field of behavioral finance suggests that investors persist in deluding themselves about their skills and performance. This persistent self-deception leads to costly investment mistakes, emphasizing the need for continuous vigilance in investment decisions.

                                                 Larry quotes a New York Times article in which professors Richard Thaler and Robert Shiller noted that individual investors and money managers persist in believing that they are endowed with more and better information than others and can profit by picking stocks. This insight helps explain why individual investors think they can:

                                                 • Pick stocks that will outperform the market.
                                                 • Time the market, so they’re in it when it’s rising and out of it when it’s falling.
                                                 • Identify the few active managers who will beat their respective benchmarks.
                                                 
                                                 

                                                 The overconfident investor

                                                 Larry adds that even when individuals acknowledge the difficulty of beating the market, they are buoyed by the hope of success. He quotes noted economist Peter Bernstein: “Active management is extraordinarily difficult because there are so many knowledgeable investors and information does move so fast. The market is hard to beat. There are a lot of smart people trying to do the same thing. Nobody’s saying that it’s easy. But possible? Yes.”

                                                 This slim possibility keeps hope alive. Overconfidence, fueled by this hope, leads investors to believe they will be among the few who succeed.

                                                 Why investors spend so much time and money on actively managed mutual funds

                                                 Larry also examined another study, Positive Illusions and Forecasting Errors in Mutual Fund Investment Decisions, which sought to find out why investors spend so much time and money on actively managed mutual funds despite passively managed index funds outperforming the vast majority of these funds.

                                                 The authors concluded that the reason was that investors deluded themselves. They found that most participants had consistently overestimated their investments’ future and past performance.

                                                 In fact, more than a third who believed they had beaten the market had actually underperformed by at least 5 percent, and at least a fourth lagged by at least 15 percent. Biases such as this contribute to suboptimal investment decisions.

                                                 You are better off accepting market returns

                                                 While Larry agrees that it is undoubtedly possible for investors to outperform the market, the evidence demonstrates that the vast majority would be better off aligning their expectations with reality and simply accepting market returns.

                                                 At the very least, investors should know the odds of outperforming. Unfortunately, most investors delude themselves about those odds, highlighting the necessity of aligning expectations with reality.

                                                 One reason, Larry says, might be that investors are unaware of the evidence. Another is that they don’t know their own track records. Larry notes that this self-delusion helps explain why investors exhibit the common human trait of overconfidence.

                                                 Most people want to believe they are above average. Thus, the disconnect investors have between reality and illusion persists.

                                                 Always measure your investment returns

                                                 In conclusion, Larry advises investors to measure their investment returns and compare them to appropriate benchmarks. Doing so will force you to confront reality rather than allow an illusion to undermine your ability to achieve your financial objectives.

                                                 Further reading

                                                 1. Jason Zweig, Your Money & Your Brain, (Simon & Schuster 2007).
                                                 2. Jonathan Fuerbringer, “Why Both Bulls and Bears Can Act So Bird-Brained,” New York Times, March 30, 1997.
                                                 3. Jonathan Burton, Investment Titans, (McGraw-Hill, 2000).
                                                 4. Money, “Did You Beat the Market?” (January 1, 2000).
                                                 5. Don A. Moore, Terri R. Kurtzberg, Craig R. Fox, and Max H. Bazerman, “Positive Illusions and Forecasting Errors in Mutual Fund Investment Decisions,” Harvard Business School Working Paper.
                                                 6. Markus Glaser and Martin Weber, “Why Inexperienced Investors Do Not Learn: They Don’t Know Their Past Portfolio Performance,” (July 21, 2007).
                                                 
                                                 

                                                 Did you miss out on the previous chapters? Check them out:

                                                 Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                                                 • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                 • Enrich Your Future 02: How Markets Set Prices
                                                 • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                                 • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                                 • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                                 • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                                 • Enrich Your Future 07: The Value of Security Analysis
                                                 • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                                 • Enrich Your Future 09: The Fed Model and the Money Illusion
                                                 
                                                 

                                                 Part II: Strategic Portfolio Decisions

                                                 • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                                 • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                                                 • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                                                 • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                                                 • Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
                                                 • Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
                                                 • Enrich Your Future 16: The Estimated Return Is Not Inevitable
                                                 • Enrich Your Future 17: Take a Portfolio Approach to Your Investments
                                                 • Enrich Your Future 18: Build a Portfolio That Can Withstand the Black Swans
                                                 • Enrich Your Future 19: The Gold Illusion: Why Investing in Gold May Not Be Safe
                                                 • Enrich Your Future 20: Passive Investing Is the Key to Prudent Wealth Management
                                                 
                                                 

                                                 About Larry Swedroe

                                                 Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                 Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                 Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                 Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                  

                                                 [spp-transcript]

                                                  

                                                 Connect with Larry Swedroe

                                                 • LinkedIn
                                                 • X
                                                 • Website
                                                 • Books
                                                 
                                                 

                                                 Andrew’s books

                                                 • How to Start Building Your Wealth Investing in the Stock Market
                                                 • My Worst Investment Ever
                                                 • 9 Valuation Mistakes and How to Avoid Them
                                                 • Transform Your Business with Dr.Deming’s 14 Points
                                                 
                                                 

                                                 Andrew’s online programs

                                                 • Valuation Master Class
                                                 • The Become a Better Investor Community
                                                 • How to Start Building Your Wealth Investing in the Stock Market
                                                 • Finance Made Ridiculously Simple
                                                 • FVMR Investing: Quantamental Investing Across the World
                                                 • Become a Great Presenter and Increase Your Influence
                                                 • Transform Your Business with Dr. Deming’s 14 Points
                                                 • Achieve Your Goals
                                                 
                                                 

                                                 Connect with Andrew Stotz:

                                                 • astotz.com
                                                 • LinkedIn
                                                 • Facebook
                                                 • Instagram
                                                 • Threads
                                                 • X
                                                 • YouTube
                                                 • My Worst Investment Ever Podcast
                                                 
                                                 ]]>8d286bdb-90cc-43ff-b8bf-3f23d259976eThu, 12 Dec 2024 06:00:00 +070017:45falsefullMichael Episcope - Investing Is About How You Behave and Not What You KnowBIO: Michael Episcope is the co-CEO of Origin Investments. He co-chairs its investment committee and oversees investor relations and capital raising.

                                                 STORY: Michael invested in a multi-family property in Austin with a friend who had vouched for somebody else. Unbeknownst to Michael, the guy in Austin had taken a loan against his property to save other properties in his portfolio.

                                                 LEARNING: Do not justify the red flags because an investment opportunity looks great. Investing is about how you behave and not what you know.

                                                  

                                                 “When looking at an investment opportunity, do not justify the red flags because the investor investment opportunity looks so great.”

                                                 Michael Episcope

                                                  

                                                 Guest profile

                                                 Michael Episcope is the co-CEO of Origin Investments. He co-chairs its investment committee and oversees investor relations and capital raising. Prior to Origin, Michael had a prolific derivatives trading career and was twice named one of the top 100 traders in the world. Michael earned his undergraduate and master’s degrees from DePaul University. He has more than 30 years of investment and risk management experience.

                                                 Worst investment ever

                                                 In 2004, Michael, a commodities trader, ventured into an investment with a friend’s recommendation. His friend’s assurance and Michael’s financial stability made him believe he was impervious to mistakes.

                                                 The investment was a multi-family property in Austin, Texas. Michael trusted his friend and thought he did the due diligence, but he did not. The deal was okay, as they had the right city and the right piece of land. But then the communication from the individual in Austin was not going very well, and things just weren’t adding up. But Michael’s friend kept insisting everything was good.

                                                 Still, something didn’t sit well with Michael, so he went online and Googled his property. He saw his property was sitting on a bridge lender site. The guy in Austin had taken a loan against Michael’s property to save other properties in his portfolio.

                                                 The whole thing just went sideways. Michael took a lot of time and effort to wrangle away from that investment, wasting a year of his life. He got pennies on the dollar back from that investment.

                                                 Lessons learned

                                                 • Investing is about people.
                                                 • When looking at an investment opportunity, do not justify the red flags because the investment opportunity seems so great.
                                                 • Investing is about how you behave and not what you know.
                                                 
                                                 

                                                 Andrew’s takeaways

                                                 • Even though you may sometimes have the wrong outcome, it doesn’t mean you didn’t do the right thing.
                                                 
                                                 

                                                 Actionable advice

                                                 • Do as much due diligence as possible. When investing with someone, ask yourself:
                                                 • Do they have something to lose if the investment fails?
                                                 • Do they have their skin in the game?
                                                 • Do they have a balance sheet?
                                                 • Do they have something here at risk more than you do?
                                                 
                                                 

                                                 Michael’s recommendations

                                                 Michael recommends that anyone wanting to learn about personal finance read Morgan Housel’s books. He also recommends downloading his free Comprehensive Guide to Real Estate Investing.

                                                 No.1 goal for the next 12 months

                                                 Michael’s number one goal for the next 12 months is to deliver a great product and service to his investors. On the personal side, Michael has two kids in college and one still at home. He aims to spend as much time as possible with the son still at home and then enjoy life after kids as an empty nester with his wife.

                                                 Parting words

                                                  

                                                 “Thank you so much for having me on today. It’s been great.”

                                                 Michael Episcope

                                                  

                                                 [spp-transcript]

                                                  

                                                 Connect with Michael Episcope

                                                 • LinkedIn
                                                 • X
                                                 • YouTube
                                                 
                                                 

                                                 Andrew’s books

                                                 • How to Start Building Your Wealth Investing in the Stock Market
                                                 • My Worst Investment Ever
                                                 • 9 Valuation Mistakes and How to Avoid Them
                                                 • Transform Your Business with Dr.Deming’s 14 Points
                                                 
                                                 

                                                 Andrew’s online programs

                                                 • Valuation Master Class
                                                 • The Become a Better Investor Community
                                                 • How to Start Building Your Wealth Investing in the Stock Market
                                                 • Finance Made Ridiculously Simple
                                                 • FVMR Investing: Quantamental Investing Across the World
                                                 • Become a Great Presenter and Increase Your Influence
                                                 • Transform Your Business with Dr. Deming’s 14 Points
                                                 • Achieve Your Goals
                                                 
                                                 

                                                 Connect with Andrew Stotz:

                                                 • astotz.com
                                                 • LinkedIn
                                                 • Facebook
                                                 • Instagram
                                                 • Threads
                                                 • X
                                                 • YouTube
                                                 • My Worst Investment Ever Podcast
                                                 
                                                 ]]>BIO: Michael Episcope is the co-CEO of Origin Investments. He co-chairs its investment committee and oversees investor relations and capital raising.

                                                 STORY: Michael invested in a multi-family property in Austin with a friend who had vouched for somebody else. Unbeknownst to Michael, the guy in Austin had taken a loan against his property to save other properties in his portfolio.

                                                 LEARNING: Do not justify the red flags because an investment opportunity looks great. Investing is about how you behave and not what you know.

                                                  

                                                 “When looking at an investment opportunity, do not justify the red flags because the investor investment opportunity looks so great.”

                                                 Michael Episcope

                                                  

                                                 Guest profile

                                                 Michael Episcope is the co-CEO of Origin Investments. He co-chairs its investment committee and oversees investor relations and capital raising. Prior to Origin, Michael had a prolific derivatives trading career and was twice named one of the top 100 traders in the world. Michael earned his undergraduate and master’s degrees from DePaul University. He has more than 30 years of investment and risk management experience.

                                                 Worst investment ever

                                                 In 2004, Michael, a commodities trader, ventured into an investment with a friend’s recommendation. His friend’s assurance and Michael’s financial stability made him believe he was impervious to mistakes.

                                                 The investment was a multi-family property in Austin, Texas. Michael trusted his friend and thought he did the due diligence, but he did not. The deal was okay, as they had the right city and the right piece of land. But then the communication from the individual in Austin was not going very well, and things just weren’t adding up. But Michael’s friend kept insisting everything was good.

                                                 Still, something didn’t sit well with Michael, so he went online and Googled his property. He saw his property was sitting on a bridge lender site. The guy in Austin had taken a loan against Michael’s property to save other properties in his portfolio.

                                                 The whole thing just went sideways. Michael took a lot of time and effort to wrangle away from that investment, wasting a year of his life. He got pennies on the dollar back from that investment.

                                                 Lessons learned

                                                 • Investing is about people.
                                                 • When looking at an investment opportunity, do not justify the red flags because the investment opportunity seems so great.
                                                 • Investing is about how you behave and not what you know.
                                                 
                                                 

                                                 Andrew’s takeaways

                                                 • Even though you may sometimes have the wrong outcome, it doesn’t mean you didn’t do the right thing.
                                                 
                                                 

                                                 Actionable advice

                                                 • Do as much due diligence as possible. When investing with someone, ask yourself:
                                                 • Do they have something to lose if the investment fails?
                                                 • Do they have their skin in the game?
                                                 • Do they have a balance sheet?
                                                 • Do they have something here at risk more than you do?
                                                 
                                                 

                                                 Michael’s recommendations

                                                 Michael recommends that anyone wanting to learn about personal finance read Morgan Housel’s books. He also recommends downloading his free Comprehensive Guide to Real Estate Investing.

                                                 No.1 goal for the next 12 months

                                                 Michael’s number one goal for the next 12 months is to deliver a great product and service to his investors. On the personal side, Michael has two kids in college and one still at home. He aims to spend as much time as possible with the son still at home and then enjoy life after kids as an empty nester with his wife.

                                                 Parting words

                                                  

                                                 “Thank you so much for having me on today. It’s been great.”

                                                 Michael Episcope

                                                  

                                                 [spp-transcript]

                                                  

                                                 Connect with Michael Episcope

                                                 • LinkedIn
                                                 • X
                                                 • YouTube
                                                 
                                                 

                                                 Andrew’s books

                                                 • How to Start Building Your Wealth Investing in the Stock Market
                                                 • My Worst Investment Ever
                                                 • 9 Valuation Mistakes and How to Avoid Them
                                                 • Transform Your Business with Dr.Deming’s 14 Points
                                                 
                                                 

                                                 Andrew’s online programs

                                                 • Valuation Master Class
                                                 • The Become a Better Investor Community
                                                 • How to Start Building Your Wealth Investing in the Stock Market
                                                 • Finance Made Ridiculously Simple
                                                 • FVMR Investing: Quantamental Investing Across the World
                                                 • Become a Great Presenter and Increase Your Influence
                                                 • Transform Your Business with Dr. Deming’s 14 Points
                                                 • Achieve Your Goals
                                                 
                                                 

                                                 Connect with Andrew Stotz:

                                                 • astotz.com
                                                 • LinkedIn
                                                 • Facebook
                                                 • Instagram
                                                 • Threads
                                                 • X
                                                 • YouTube
                                                 • My Worst Investment Ever Podcast
                                                 
                                                 ]]>5d019887-d107-45a3-aff9-0ff3e3899cd5Tue, 03 Dec 2024 06:00:00 +070040:37falsefullEnrich Your Future 20: Passive Investing Is the Key to Prudent Wealth ManagementIn this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 20: A Higher Intelligence.

                                                 LEARNING: Choose passive investing over active investing.

                                                  

                                                 “Passive investing involves systematic, transparent, and replicable strategies without individual stock selection or market timing. It’s the more ethical way to go.”

                                                 Larry Swedroe

                                                  

                                                 In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                 Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 20: A Higher Intelligence.

                                                 Chapter 20: A Higher Intelligence

                                                 In this chapter, Larry discusses prudent investing.

                                                 The Uniform Prudent Investor Act

                                                 The Uniform Prudent Investor Act, a cornerstone of prudent investment management, offers two key benefits.

                                                 Firstly, it underscores the importance of broad diversification in risk management, empowering trustees and investors to make informed decisions.

                                                 Secondly, it promotes cost control as a vital aspect of prudent investing, providing a clear roadmap for those who may lack the necessary knowledge, skill, time, or interest to manage a portfolio effectively.

                                                 Ethical malfeasance and misfeasance in investing

                                                 In this chapter, Larry sheds light on Michael G. Sher’s insights. Sher extensively discusses ethical malfeasance and misfeasance. He says ethical malfeasance occurs when an investment manager does something deliberately or conceals it (e.g., the manager knows that he’s too drunk to drive but drives anyway).

                                                 For example, consider the manager who invests intentionally at a higher level of risk than the client chose without informing them and then generates a subsequently higher return. The manager attributes the alpha or the excess return to his superior skill instead of the reality that he was taking more risk, so it was just more exposure to beta, not alpha.

                                                 On the other hand, ethical misfeasance occurs when an investment manager does something by accident (e.g., the manager really believes that he’s sober enough to drive). Thus, the manager doesn’t know what he’s doing and shouldn’t be managing money.

                                                 Avoid active investing

                                                 Larry highly discourages active investing because the evidence shows that active managers who tend to outperform on average outperform by a little bit, and the ones that underperform tend to underperform by a lot.

                                                 Either they don’t have the skill, and they have higher expenses, and the ones who have enough skills to beat the market, most of that skill is offset by their higher costs. So it’s still really tough to generate alpha.

                                                 Passive investing is the ethical way to go

                                                 According to Sher, managing money in an efficient market without investing passively is investment malfeasance. He also notes that not knowing that such a market is efficient is investment misfeasance because you should know it. It’s in the law books. Sher concludes that passive investing is a systematic, transparent, and replicable strategy that is more ethical.

                                                 Further reading

                                                 1. W. Scott Simon, The Prudent Investor Act (Namborn Publishing, 2002)
                                                 
                                                 

                                                 Did you miss out on the previous chapters? Check them out:

                                                 Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                                                 • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                 • Enrich Your Future 02: How Markets Set Prices
                                                 • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                                 • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                                 • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                                 • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                                 • Enrich Your Future 07: The Value of Security Analysis
                                                 • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                                 • Enrich Your Future 09: The Fed Model and the Money Illusion
                                                 
                                                 

                                                 Part II: Strategic Portfolio Decisions

                                                 • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                                 • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                                                 • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                                                 • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                                                 • Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
                                                 • Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
                                                 • Enrich Your Future 16: The Estimated Return Is Not Inevitable
                                                 • Enrich Your Future 17: Take a Portfolio Approach to Your Investments
                                                 • Enrich Your Future 18: Build a Portfolio That Can Withstand the Black Swans
                                                 • Enrich Your Future 19: The Gold Illusion: Why Investing in Gold May Not Be Safe
                                                 
                                                 

                                                 About Larry Swedroe

                                                 Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                 Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 20: A Higher Intelligence.

                                                 LEARNING: Choose passive investing over active investing.

                                                  

                                                 “Passive investing involves systematic, transparent, and replicable strategies without individual stock selection or market timing. It’s the more ethical way to go.”

                                                 Larry Swedroe

                                                  

                                                 In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                 Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 20: A Higher Intelligence.

                                                 Chapter 20: A Higher Intelligence

                                                 In this chapter, Larry discusses prudent investing.

                                                 The Uniform Prudent Investor Act

                                                 The Uniform Prudent Investor Act, a cornerstone of prudent investment management, offers two key benefits.

                                                 Firstly, it underscores the importance of broad diversification in risk management, empowering trustees and investors to make informed decisions.

                                                 Secondly, it promotes cost control as a vital aspect of prudent investing, providing a clear roadmap for those who may lack the necessary knowledge, skill, time, or interest to manage a portfolio effectively.

                                                 Ethical malfeasance and misfeasance in investing

                                                 In this chapter, Larry sheds light on Michael G. Sher’s insights. Sher extensively discusses ethical malfeasance and misfeasance. He says ethical malfeasance occurs when an investment manager does something deliberately or conceals it (e.g., the manager knows that he’s too drunk to drive but drives anyway).

                                                 For example, consider the manager who invests intentionally at a higher level of risk than the client chose without informing them and then generates a subsequently higher return. The manager attributes the alpha or the excess return to his superior skill instead of the reality that he was taking more risk, so it was just more exposure to beta, not alpha.

                                                 On the other hand, ethical misfeasance occurs when an investment manager does something by accident (e.g., the manager really believes that he’s sober enough to drive). Thus, the manager doesn’t know what he’s doing and shouldn’t be managing money.

                                                 Avoid active investing

                                                 Larry highly discourages active investing because the evidence shows that active managers who tend to outperform on average outperform by a little bit, and the ones that underperform tend to underperform by a lot.

                                                 Either they don’t have the skill, and they have higher expenses, and the ones who have enough skills to beat the market, most of that skill is offset by their higher costs. So it’s still really tough to generate alpha.

                                                 Passive investing is the ethical way to go

                                                 According to Sher, managing money in an efficient market without investing passively is investment malfeasance. He also notes that not knowing that such a market is efficient is investment misfeasance because you should know it. It’s in the law books. Sher concludes that passive investing is a systematic, transparent, and replicable strategy that is more ethical.

                                                 Further reading

                                                 1. W. Scott Simon, The Prudent Investor Act (Namborn Publishing, 2002)
                                                 
                                                 

                                                 Did you miss out on the previous chapters? Check them out:

                                                 Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                                                 • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                 • Enrich Your Future 02: How Markets Set Prices
                                                 • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                                 • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                                 • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                                 • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                                 • Enrich Your Future 07: The Value of Security Analysis
                                                 • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                                 • Enrich Your Future 09: The Fed Model and the Money Illusion
                                                 
                                                 

                                                 Part II: Strategic Portfolio Decisions

                                                 • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                                 • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                                                 • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                                                 • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                                                 • Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
                                                 • Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
                                                 • Enrich Your Future 16: The Estimated Return Is Not Inevitable
                                                 • Enrich Your Future 17: Take a Portfolio Approach to Your Investments
                                                 • Enrich Your Future 18: Build a Portfolio That Can Withstand the Black Swans
                                                 • Enrich Your Future 19: The Gold Illusion: Why Investing in Gold May Not Be Safe
                                                 
                                                 

                                                 About Larry Swedroe

                                                 Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                 Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                 Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                 Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                  

                                                 [spp-transcript]

                                                  

                                                 Connect with Larry Swedroe

                                                 • LinkedIn
                                                 • Twitter
                                                 • Website
                                                 • Books
                                                 
                                                 

                                                 Andrew’s books

                                                 • How to Start Building Your Wealth Investing in the Stock Market
                                                 • My Worst Investment Ever
                                                 • 9 Valuation Mistakes and How to Avoid Them
                                                 • Transform Your Business with Dr.Deming’s 14 Points
                                                 
                                                 

                                                 Andrew’s online programs

                                                 • Valuation Master Class
                                                 • The Become a Better Investor Community
                                                 • How to Start Building Your Wealth Investing in the Stock Market
                                                 • Finance Made Ridiculously Simple
                                                 • FVMR Investing: Quantamental Investing Across the World
                                                 • Become a Great Presenter and Increase Your Influence
                                                 • Transform Your Business with Dr. Deming’s 14 Points
                                                 • Achieve Your Goals
                                                 
                                                 

                                                 Connect with Andrew Stotz:

                                                 • astotz.com
                                                 • LinkedIn
                                                 • Facebook
                                                 • Instagram
                                                 • Threads
                                                 • Twitter
                                                 • YouTube
                                                 • My Worst Investment Ever Podcast
                                                 
                                                 ]]>b4337060-4de0-437d-990f-00230cc2cd6bTue, 19 Nov 2024 06:00:00 +070018:36falsefullEnrich Your Future 19: The Gold Illusion: Why Investing in Gold May Not Be SafeIn this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 19: Is Gold a Safe Haven Asset?

                                                 LEARNING: Do not allocate more than 5% of gold to your portfolio.

                                                  

                                                 “I don’t have a problem with people allocating a very small amount of gold to their portfolio, but they should only do it if they’re prepared to earn lousy returns most of the time.”

                                                 Larry Swedroe

                                                  

                                                 In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                 Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 19: Is Gold a Safe Haven Asset?

                                                 Chapter 19: Is Gold a Safe Haven Asset?

                                                 In this chapter, Larry explains why you should not buy gold because you think it’s a good inflation hedge. While he is fine with people allocating a minimal amount of gold to their portfolio, Larry cautions that they should only do it if they’re prepared to earn lousy returns most of the time.

                                                 Gold as an investment asset

                                                 Gold has long been used as a store of value, a unit of exchange, and as jewelry. More recently, many investors have come to believe that gold should be considered an investment asset, playing a potential role in the asset allocation decision by providing a hedge against currency risk, a hedge against inflation, and a haven of safety during severe economic recessions. Larry reviews various research findings to determine if the evidence supports those beliefs.

                                                 The evidence

                                                 In their June 2012 study, “The Golden Dilemma,” Claude Erb and Campbell Harvey found that in terms of being a currency hedge, changes in the real price of gold were largely independent of the change in currency values—gold is not a good hedge against currency risk.

                                                 This means that the value of gold does not necessarily increase or decrease in response to changes in currency values, making it a less effective hedge than commonly believed.

                                                 Erb and Harvey also found gold isn’t quite the safe haven many investors think it is, as 17% of monthly stock returns fell into the category where gold dropped while stocks posted negative returns. If gold acted as a true safe haven, we would expect very few, if any, such observations. Still, 83% of the time, on the right side isn’t a bad record.

                                                 Gold is not an inflation hedge, no matter the trading horizon

                                                 The following example provides the answer regarding gold’s value as an inflation hedge. On January 21, 1980, the price of gold reached a then-record high of US$850. On March 19, 2002, gold traded at US$293, well below its price two decades earlier. The inflation rate for the period from 1980 through 2001 was 3.9%.

                                                 Thus, gold’s loss in real purchasing power, which refers to the amount of goods or services that can be purchased with a unit of gold, was about 85%. This means that the value of gold, in terms of what it can buy, decreased significantly over this period. Gold cannot be considered an inflation hedge over most investors’ horizons when it lost 85% in real terms over 22 years.

                                                 Gold is not as attractive an asset as many may think

                                                 Investors are often attracted to gold because they believe it provides hedging benefits—hedging inflation, hedging currency risk, and acting as a haven of safety in bad times. The evidence demonstrates that investors should be wary.

                                                 While gold might protect against inflation in the long run, 10 or 20 years is not the long run; you need a longer investment horizon to make actual returns. And there is no evidence that gold acts as a hedge against currency risk.

                                                 As to being a safe haven, gold is a volatile investment capable and likely to overshoot or undershoot any notion of fair value. Evidence of gold’s short-term volatility is that over the 17 years (2006-2022), the annual standard deviation of the iShares Gold Trust ETF (IAU), at 17.2%, was higher than the 15.6% annual standard deviation of Vanguard’s 500 Index Investor Fund (VFINX).

                                                 In addition, gold experienced a maximum drawdown of almost 43%—safe havens don’t experience losses of that magnitude.

                                                 Don’t allocate more than 5% gold in your portfolio

                                                 With this evidence in mind, Larry advises investors never to own more than 5% of gold in their portfolio. Further, investors should remember that gold only acts as a safe haven on occasion, but there are also many times when it doesn’t. Historically, the probability is close to a 50/50 coin toss, slightly favoring gold.

                                                 Alternative assets to own instead of gold

                                                 Larry says investors are better off owning real assets than gold because they have expected actual returns. So, for example, real estate prices over the long term go up because part of the cost is land and buildings, making real estate an excellent long-term hedge.

                                                 Another asset Larry suggests instead of gold is infrastructure ETFs that, for example, own toll roads and water facilities. Such assets raise their prices with the inflation rate and can act as a hedge.

                                                 Further reading

                                                 1. Claude Erb and Campbell Harvey, “The Golden Dilemma,” Financial Analysts Journal (July/August 2013).
                                                 2. Claude Erb and Campbell Harvey, “The Golden Constant,” May 2019.
                                                 3. Goldman Sachs, “Over the Horizon,” 2013 Investment Outlook.
                                                 4. Pim van Vliet and Harald Lohre, “The Golden Rule of Investing,” Jun 2023.
                                                 
                                                 

                                                 Did you miss out on the previous chapters? Check them out:

                                                 Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                                                 • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                 • Enrich Your Future 02: How Markets Set Prices
                                                 • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                                 • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                                 • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                                 • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                                 • Enrich Your Future 07: The Value of Security Analysis
                                                 • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                                 • Enrich Your Future 09: The Fed Model and the Money Illusion
                                                 
                                                 

                                                 Part II: Strategic Portfolio Decisions

                                                 • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                                 • Enrich Your Future 11: Long-Term Outperformance Is Not Always...]]>In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 19: Is Gold a Safe Haven Asset?

                                                   LEARNING: Do not allocate more than 5% of gold to your portfolio.

                                                    

                                                   “I don’t have a problem with people allocating a very small amount of gold to their portfolio, but they should only do it if they’re prepared to earn lousy returns most of the time.”

                                                   Larry Swedroe

                                                    

                                                   In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                   Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 19: Is Gold a Safe Haven Asset?

                                                   Chapter 19: Is Gold a Safe Haven Asset?

                                                   In this chapter, Larry explains why you should not buy gold because you think it’s a good inflation hedge. While he is fine with people allocating a minimal amount of gold to their portfolio, Larry cautions that they should only do it if they’re prepared to earn lousy returns most of the time.

                                                   Gold as an investment asset

                                                   Gold has long been used as a store of value, a unit of exchange, and as jewelry. More recently, many investors have come to believe that gold should be considered an investment asset, playing a potential role in the asset allocation decision by providing a hedge against currency risk, a hedge against inflation, and a haven of safety during severe economic recessions. Larry reviews various research findings to determine if the evidence supports those beliefs.

                                                   The evidence

                                                   In their June 2012 study, “The Golden Dilemma,” Claude Erb and Campbell Harvey found that in terms of being a currency hedge, changes in the real price of gold were largely independent of the change in currency values—gold is not a good hedge against currency risk.

                                                   This means that the value of gold does not necessarily increase or decrease in response to changes in currency values, making it a less effective hedge than commonly believed.

                                                   Erb and Harvey also found gold isn’t quite the safe haven many investors think it is, as 17% of monthly stock returns fell into the category where gold dropped while stocks posted negative returns. If gold acted as a true safe haven, we would expect very few, if any, such observations. Still, 83% of the time, on the right side isn’t a bad record.

                                                   Gold is not an inflation hedge, no matter the trading horizon

                                                   The following example provides the answer regarding gold’s value as an inflation hedge. On January 21, 1980, the price of gold reached a then-record high of US$850. On March 19, 2002, gold traded at US$293, well below its price two decades earlier. The inflation rate for the period from 1980 through 2001 was 3.9%.

                                                   Thus, gold’s loss in real purchasing power, which refers to the amount of goods or services that can be purchased with a unit of gold, was about 85%. This means that the value of gold, in terms of what it can buy, decreased significantly over this period. Gold cannot be considered an inflation hedge over most investors’ horizons when it lost 85% in real terms over 22 years.

                                                   Gold is not as attractive an asset as many may think

                                                   Investors are often attracted to gold because they believe it provides hedging benefits—hedging inflation, hedging currency risk, and acting as a haven of safety in bad times. The evidence demonstrates that investors should be wary.

                                                   While gold might protect against inflation in the long run, 10 or 20 years is not the long run; you need a longer investment horizon to make actual returns. And there is no evidence that gold acts as a hedge against currency risk.

                                                   As to being a safe haven, gold is a volatile investment capable and likely to overshoot or undershoot any notion of fair value. Evidence of gold’s short-term volatility is that over the 17 years (2006-2022), the annual standard deviation of the iShares Gold Trust ETF (IAU), at 17.2%, was higher than the 15.6% annual standard deviation of Vanguard’s 500 Index Investor Fund (VFINX).

                                                   In addition, gold experienced a maximum drawdown of almost 43%—safe havens don’t experience losses of that magnitude.

                                                   Don’t allocate more than 5% gold in your portfolio

                                                   With this evidence in mind, Larry advises investors never to own more than 5% of gold in their portfolio. Further, investors should remember that gold only acts as a safe haven on occasion, but there are also many times when it doesn’t. Historically, the probability is close to a 50/50 coin toss, slightly favoring gold.

                                                   Alternative assets to own instead of gold

                                                   Larry says investors are better off owning real assets than gold because they have expected actual returns. So, for example, real estate prices over the long term go up because part of the cost is land and buildings, making real estate an excellent long-term hedge.

                                                   Another asset Larry suggests instead of gold is infrastructure ETFs that, for example, own toll roads and water facilities. Such assets raise their prices with the inflation rate and can act as a hedge.

                                                   Further reading

                                                   1. Claude Erb and Campbell Harvey, “The Golden Dilemma,” Financial Analysts Journal (July/August 2013).
                                                   2. Claude Erb and Campbell Harvey, “The Golden Constant,” May 2019.
                                                   3. Goldman Sachs, “Over the Horizon,” 2013 Investment Outlook.
                                                   4. Pim van Vliet and Harald Lohre, “The Golden Rule of Investing,” Jun 2023.
                                                   
                                                   

                                                   Did you miss out on the previous chapters? Check them out:

                                                   Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                                                   • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                   • Enrich Your Future 02: How Markets Set Prices
                                                   • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                                   • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                                   • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                                   • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                                   • Enrich Your Future 07: The Value of Security Analysis
                                                   • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                                   • Enrich Your Future 09: The Fed Model and the Money Illusion
                                                   
                                                   

                                                   Part II: Strategic Portfolio Decisions

                                                   • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                                   • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                                                   • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                                                   • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                                                   • Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
                                                   • Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
                                                   • Enrich Your Future 16: The Estimated Return Is Not Inevitable
                                                   • Enrich Your Future 17: Take a Portfolio Approach to Your Investments
                                                   • Enrich Your Future 18: Build a Portfolio That Can Withstand the Black Swans
                                                   
                                                   

                                                   About Larry Swedroe

                                                   Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                   Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                   Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                   Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                    

                                                   [spp-transcript]

                                                    

                                                   Connect with Larry Swedroe

                                                   • LinkedIn
                                                   • Twitter
                                                   • Website
                                                   • Books
                                                   
                                                   

                                                   Andrew’s books

                                                   • How to Start Building Your Wealth Investing in the Stock Market
                                                   • My Worst Investment Ever
                                                   • 9 Valuation Mistakes and How to Avoid Them
                                                   • Transform Your Business with Dr.Deming’s 14 Points
                                                   
                                                   

                                                   Andrew’s online programs

                                                   • Valuation Master Class
                                                   • The Become a Better Investor Community
                                                   • How to Start Building Your Wealth Investing in the Stock Market
                                                   • Finance Made Ridiculously Simple
                                                   • FVMR Investing: Quantamental Investing Across the World
                                                   • Become a Great Presenter and Increase Your Influence
                                                   • Transform Your Business with Dr. Deming’s 14 Points
                                                   • Achieve Your Goals
                                                   
                                                   

                                                   Connect with Andrew Stotz:

                                                   • astotz.com
                                                   • LinkedIn
                                                   • Facebook
                                                   • Instagram
                                                   • Threads
                                                   • Twitter
                                                   • YouTube
                                                   • My Worst Investment Ever Podcast
                                                   
                                                   ]]>211c744b-0f18-4afd-ac2d-4a72663a4fc0Tue, 12 Nov 2024 06:00:00 +070032:30falsefullEnrich Your Future 18: Build a Portfolio That Can Withstand the Black SwansIn this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 18: Black Swans and Fat Tails.

                                                   LEARNING: Never treat the unlikely as impossible. Diversify your portfolio to withstand black swans.

                                                    

                                                   “If you build a portfolio that can withstand the black swans and is highly diversified, then psychological or economic events won’t force you to sell.”

                                                   Larry Swedroe

                                                    

                                                   In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                   Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 18: Black Swans and Fat Tails.

                                                   Chapter 18: Black Swans and Fat Tails

                                                   In this chapter, Larry explains the importance of never treating the unlikely as impossible and ensuring your plan includes the near certainty that black swan events will appear. Thus, your plan should consider their risks and how to address them.

                                                   Understanding the risk of fat tails

                                                   In terms of investing, Larry says, fat tails are distributions in which very low and high values are more frequent than a normal distribution predicts. In a normal distribution, the tails to the extreme left and extreme right of the mean become smaller, ultimately reaching zero occurrences.

                                                   However, the historical evidence on stock returns is that they demonstrate occurrences of low and high values that are far greater than theoretically expected by a normal distribution. Thus, understanding the risk of fat tails is essential to developing an appropriate asset allocation and investment plan. Unfortunately, Larry notes, many investors fail to account for the risks of fat tails.

                                                   History of the black swans

                                                   With the publication of Nassim Nicholas Taleb’s 2001 book Fooled by Randomness, the term black swan became part of the investment vernacular—virtually synonymous with the term fat tail. In his second book, The Black Swan, published in 2007, Taleb called a black swan an event with three attributes:

                                                   • It is an outlier, as it lies outside the realm of regular expectations because nothing in the past can convincingly point to its possibility.
                                                   • It carries an extreme impact.
                                                   • Despite its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable.
                                                   
                                                   

                                                   Taleb went on further to show that stock returns have big fat tails. Their distribution of returns is not normally distributed, and fat tails mean that what people think are unlikely events are much more likely to occur than people believe will.

                                                   To illustrate this, Larry uses an example: if you take stock returns, and in the last 100 years, you cut out one best month per year, which is 1% of the distribution, the assumption is that you wouldn’t lose all that much of the returns. But the fact is, you lose most of the returns. So that’s the good fat tails. Similarly, if you avoid the worst months, your returns become spectacular.

                                                   Do not try to time the market

                                                   However, Larry cautions investors that trying to time the market because of unpredictable events is the wrong strategy. The fact that you have fat tails in the data doesn’t mean you should try to time the market or engage in an active management strategy because evidence shows that it doesn’t work.

                                                   What it means, very simply put, is that your investment strategy, investment policy, and asset allocation decisions must take into account that these fat tails exist; they’re unpredictable, and therefore, don’t take more risks than you can stomach. Further, Larry adds, you must be prepared to rebalance the portfolio to take advantage of those drops and buy more when things are down.

                                                   Active management will not protect you from fat tails

                                                   The existence of fat tails doesn’t change the prudent strategy of being a passive buy, hold, and rebalance investor. Active managers have demonstrated no ability to protect investors from fat tails.

                                                   However, the existence of fat tails is significant because of their effect on portfolios. The risks of black swans and the damage they can do to portfolios, especially for those in the withdrawal phase, must be considered when designing your asset allocation. With that in mind, Larry offers the following advice:

                                                   • Make sure your investment plan accounts for the existence of fat tails.
                                                   • Don’t take more risks than you have the ability, willingness, or need to take.
                                                   • Never treat the unlikely as impossible or the likely as certain.
                                                   
                                                   

                                                   Further reading

                                                   1. Nassim Nicholas Taleb, Fooled by Randomness, Texere, 2001.
                                                   2. Javier Estrada, “Black Swans and Market Timing: How Not to Generate Alpha,” November 2007.
                                                   3. Nassim Nicholas Taleb, The Black Swan, Random House, 2007.
                                                   
                                                   

                                                   Did you miss out on the previous chapters? Check them out:

                                                   Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                                                   • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                   • Enrich Your Future 02: How Markets Set Prices
                                                   • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                                   • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                                   • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                                   • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                                   • Enrich Your Future 07: The Value of Security Analysis
                                                   • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                                   • Enrich Your Future 09: The Fed Model and the Money Illusion
                                                   
                                                   

                                                   Part II: Strategic Portfolio Decisions

                                                   • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                                   • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                                                   • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                                                   • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                                                   • Enrich Your Future 14: Stocks Are Risky...]]>In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 18: Black Swans and Fat Tails.

                                                     LEARNING: Never treat the unlikely as impossible. Diversify your portfolio to withstand black swans.

                                                      

                                                     “If you build a portfolio that can withstand the black swans and is highly diversified, then psychological or economic events won’t force you to sell.”

                                                     Larry Swedroe

                                                      

                                                     In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                     Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 18: Black Swans and Fat Tails.

                                                     Chapter 18: Black Swans and Fat Tails

                                                     In this chapter, Larry explains the importance of never treating the unlikely as impossible and ensuring your plan includes the near certainty that black swan events will appear. Thus, your plan should consider their risks and how to address them.

                                                     Understanding the risk of fat tails

                                                     In terms of investing, Larry says, fat tails are distributions in which very low and high values are more frequent than a normal distribution predicts. In a normal distribution, the tails to the extreme left and extreme right of the mean become smaller, ultimately reaching zero occurrences.

                                                     However, the historical evidence on stock returns is that they demonstrate occurrences of low and high values that are far greater than theoretically expected by a normal distribution. Thus, understanding the risk of fat tails is essential to developing an appropriate asset allocation and investment plan. Unfortunately, Larry notes, many investors fail to account for the risks of fat tails.

                                                     History of the black swans

                                                     With the publication of Nassim Nicholas Taleb’s 2001 book Fooled by Randomness, the term black swan became part of the investment vernacular—virtually synonymous with the term fat tail. In his second book, The Black Swan, published in 2007, Taleb called a black swan an event with three attributes:

                                                     • It is an outlier, as it lies outside the realm of regular expectations because nothing in the past can convincingly point to its possibility.
                                                     • It carries an extreme impact.
                                                     • Despite its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable.
                                                     
                                                     

                                                     Taleb went on further to show that stock returns have big fat tails. Their distribution of returns is not normally distributed, and fat tails mean that what people think are unlikely events are much more likely to occur than people believe will.

                                                     To illustrate this, Larry uses an example: if you take stock returns, and in the last 100 years, you cut out one best month per year, which is 1% of the distribution, the assumption is that you wouldn’t lose all that much of the returns. But the fact is, you lose most of the returns. So that’s the good fat tails. Similarly, if you avoid the worst months, your returns become spectacular.

                                                     Do not try to time the market

                                                     However, Larry cautions investors that trying to time the market because of unpredictable events is the wrong strategy. The fact that you have fat tails in the data doesn’t mean you should try to time the market or engage in an active management strategy because evidence shows that it doesn’t work.

                                                     What it means, very simply put, is that your investment strategy, investment policy, and asset allocation decisions must take into account that these fat tails exist; they’re unpredictable, and therefore, don’t take more risks than you can stomach. Further, Larry adds, you must be prepared to rebalance the portfolio to take advantage of those drops and buy more when things are down.

                                                     Active management will not protect you from fat tails

                                                     The existence of fat tails doesn’t change the prudent strategy of being a passive buy, hold, and rebalance investor. Active managers have demonstrated no ability to protect investors from fat tails.

                                                     However, the existence of fat tails is significant because of their effect on portfolios. The risks of black swans and the damage they can do to portfolios, especially for those in the withdrawal phase, must be considered when designing your asset allocation. With that in mind, Larry offers the following advice:

                                                     • Make sure your investment plan accounts for the existence of fat tails.
                                                     • Don’t take more risks than you have the ability, willingness, or need to take.
                                                     • Never treat the unlikely as impossible or the likely as certain.
                                                     
                                                     

                                                     Further reading

                                                     1. Nassim Nicholas Taleb, Fooled by Randomness, Texere, 2001.
                                                     2. Javier Estrada, “Black Swans and Market Timing: How Not to Generate Alpha,” November 2007.
                                                     3. Nassim Nicholas Taleb, The Black Swan, Random House, 2007.
                                                     
                                                     

                                                     Did you miss out on the previous chapters? Check them out:

                                                     Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                                                     • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                     • Enrich Your Future 02: How Markets Set Prices
                                                     • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                                     • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                                     • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                                     • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                                     • Enrich Your Future 07: The Value of Security Analysis
                                                     • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                                     • Enrich Your Future 09: The Fed Model and the Money Illusion
                                                     
                                                     

                                                     Part II: Strategic Portfolio Decisions

                                                     • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                                     • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                                                     • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                                                     • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                                                     • Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
                                                     • Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
                                                     • Enrich Your Future 16: The Estimated Return Is Not Inevitable
                                                     • Enrich Your Future 17: Take a Portfolio Approach to Your Investments
                                                     
                                                     

                                                     About Larry Swedroe

                                                     Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                     Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                     Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                     Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                      

                                                     [spp-transcript]

                                                      

                                                     Connect with Larry Swedroe

                                                     • LinkedIn
                                                     • Twitter
                                                     • Website
                                                     • Books
                                                     
                                                     

                                                     Andrew’s books

                                                     • How to Start Building Your Wealth Investing in the Stock Market
                                                     • My Worst Investment Ever
                                                     • 9 Valuation Mistakes and How to Avoid Them
                                                     • Transform Your Business with Dr.Deming’s 14 Points
                                                     
                                                     

                                                     Andrew’s online programs

                                                     • Valuation Master Class
                                                     • The Become a Better Investor Community
                                                     • How to Start Building Your Wealth Investing in the Stock Market
                                                     • Finance Made Ridiculously Simple
                                                     • FVMR Investing: Quantamental Investing Across the World
                                                     • Become a Great Presenter and Increase Your Influence
                                                     • Transform Your Business with Dr. Deming’s 14 Points
                                                     • Achieve Your Goals
                                                     
                                                     

                                                     Connect with Andrew Stotz:

                                                     • astotz.com
                                                     • LinkedIn
                                                     • Facebook
                                                     • Instagram
                                                     • Threads
                                                     • Twitter
                                                     • YouTube
                                                     • My Worst Investment Ever Podcast
                                                     
                                                     ]]>0385c256-ad10-4392-8d52-9b321fd93027Tue, 29 Oct 2024 06:00:00 +070032:21falsefullEnrich Your Future 17: Take a Portfolio Approach to Your InvestmentsIn this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 17: There is Only One Way to See Things Rightly.

                                                     LEARNING: Consider the overall impact of investments rather than focusing on individual metrics.

                                                      

                                                     "There is only one right way to build a portfolio—by recognizing that the risk and return of any asset class by itself should be irrelevant."

                                                     Larry Swedroe

                                                      

                                                     In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                     Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 17: There is Only One Way to See Things Rightly.

                                                     Chapter 17: There is Only One Way to See Things Rightly

                                                     In this chapter, Larry enlightens us on the benefits of considering the overall impact of investments rather than focusing on individual metrics. This holistic approach empowers investors and advisors to make more informed decisions.

                                                     Don’t view an asset class’s returns and risk in isolation

                                                     A common mistake that investors and even professional advisors often make is viewing an asset class’s returns and risk in isolation. Larry emphasizes this point by giving the example of Vanguard’s popular index funds, the largest index funds in their respective categories, to make us all more cautious and aware of the potential pitfalls of this approach.

                                                     From 1998 through 2022, the Vanguard 500 Index Fund (VFINX) returned 7.53% per annum, outperforming Vanguard’s Emerging Markets Index Fund (VEIEX), which returned 6.14% per annum. VFINX also experienced lower volatility of 15.7% versus 22.6% for VEIEX. The result was that VFINX produced a much higher Sharpe ratio (risk-adjusted return measure) of 0.43 versus 0.30 for VEIEX.

                                                     Why more volatile emerging markets have a higher return

                                                     According to Larry, despite including an allocation to the lower returning and more volatile VEIEX, a portfolio of 90% VFINX/10% VEIEX, rebalanced annually, would have outperformed, returning 7.59%. And it did so while also producing the same Sharpe ratio of 0.43. Perhaps surprisingly, a 20% allocation to VEIEX would have done even better, returning 7.61% with a 0.43 Sharpe ratio.

                                                     Even a 30% allocation to VEIEX would have returned 7.59%, higher than the 7.53% return of VFINX (though the Sharpe ratio would have fallen slightly to 0.42 from 0.43). The portfolios that included an allocation to the lower-returning and more volatile emerging markets benefited from the imperfect correlation of returns (0.77) between the S&P 500 Index and the MSCI Emerging Markets Index.

                                                     The right way to build a portfolio

                                                     Larry says there is only one right way to build a portfolio—by recognizing that the risk and return of any asset class by itself should be irrelevant. The only thing that should matter is considering how adding an asset class impacts the risk and return of the entire portfolio.

                                                     Further, Larry stresses the importance of global diversification, a strategy that can reassure and instill confidence in investors and advisors. He points out that if markets are efficient, all risky assets should have very similar risk-adjusted returns. This argument for broad global diversification, avoiding the home country bias, is a logical starting point for you to consider in your investment strategies.

                                                     Did you miss out on the previous chapters? Check them out:

                                                     Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                                                     • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                     • Enrich Your Future 02: How Markets Set Prices
                                                     • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                                     • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                                     • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                                     • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                                     • Enrich Your Future 07: The Value of Security Analysis
                                                     • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                                     • Enrich Your Future 09: The Fed Model and the Money Illusion
                                                     
                                                     

                                                     Part II: Strategic Portfolio Decisions

                                                     • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                                     • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                                                     • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                                                     • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                                                     • Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
                                                     • Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
                                                     • Enrich Your Future 16: The Estimated Return Is Not Inevitable
                                                     
                                                     

                                                     About Larry Swedroe

                                                     Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                     Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                     Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                     Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth]]>In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 17: There is Only One Way to See Things Rightly.

                                                     LEARNING: Consider the overall impact of investments rather than focusing on individual metrics.

                                                      

                                                     "There is only one right way to build a portfolio—by recognizing that the risk and return of any asset class by itself should be irrelevant."

                                                     Larry Swedroe

                                                      

                                                     In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                     Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 17: There is Only One Way to See Things Rightly.

                                                     Chapter 17: There is Only One Way to See Things Rightly

                                                     In this chapter, Larry enlightens us on the benefits of considering the overall impact of investments rather than focusing on individual metrics. This holistic approach empowers investors and advisors to make more informed decisions.

                                                     Don’t view an asset class’s returns and risk in isolation

                                                     A common mistake that investors and even professional advisors often make is viewing an asset class’s returns and risk in isolation. Larry emphasizes this point by giving the example of Vanguard’s popular index funds, the largest index funds in their respective categories, to make us all more cautious and aware of the potential pitfalls of this approach.

                                                     From 1998 through 2022, the Vanguard 500 Index Fund (VFINX) returned 7.53% per annum, outperforming Vanguard’s Emerging Markets Index Fund (VEIEX), which returned 6.14% per annum. VFINX also experienced lower volatility of 15.7% versus 22.6% for VEIEX. The result was that VFINX produced a much higher Sharpe ratio (risk-adjusted return measure) of 0.43 versus 0.30 for VEIEX.

                                                     Why more volatile emerging markets have a higher return

                                                     According to Larry, despite including an allocation to the lower returning and more volatile VEIEX, a portfolio of 90% VFINX/10% VEIEX, rebalanced annually, would have outperformed, returning 7.59%. And it did so while also producing the same Sharpe ratio of 0.43. Perhaps surprisingly, a 20% allocation to VEIEX would have done even better, returning 7.61% with a 0.43 Sharpe ratio.

                                                     Even a 30% allocation to VEIEX would have returned 7.59%, higher than the 7.53% return of VFINX (though the Sharpe ratio would have fallen slightly to 0.42 from 0.43). The portfolios that included an allocation to the lower-returning and more volatile emerging markets benefited from the imperfect correlation of returns (0.77) between the S&P 500 Index and the MSCI Emerging Markets Index.

                                                     The right way to build a portfolio

                                                     Larry says there is only one right way to build a portfolio—by recognizing that the risk and return of any asset class by itself should be irrelevant. The only thing that should matter is considering how adding an asset class impacts the risk and return of the entire portfolio.

                                                     Further, Larry stresses the importance of global diversification, a strategy that can reassure and instill confidence in investors and advisors. He points out that if markets are efficient, all risky assets should have very similar risk-adjusted returns. This argument for broad global diversification, avoiding the home country bias, is a logical starting point for you to consider in your investment strategies.

                                                     Did you miss out on the previous chapters? Check them out:

                                                     Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                                                     • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                     • Enrich Your Future 02: How Markets Set Prices
                                                     • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                                     • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                                     • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                                     • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                                     • Enrich Your Future 07: The Value of Security Analysis
                                                     • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                                     • Enrich Your Future 09: The Fed Model and the Money Illusion
                                                     
                                                     

                                                     Part II: Strategic Portfolio Decisions

                                                     • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                                     • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                                                     • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                                                     • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                                                     • Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
                                                     • Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
                                                     • Enrich Your Future 16: The Estimated Return Is Not Inevitable
                                                     
                                                     

                                                     About Larry Swedroe

                                                     Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                     Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                     Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                     Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                      

                                                     [spp-transcript]

                                                      

                                                     Connect with Larry Swedroe

                                                     • LinkedIn
                                                     • Twitter
                                                     • Website
                                                     • Books
                                                     
                                                     

                                                     Andrew’s books

                                                     • How to Start Building Your Wealth Investing in the Stock Market
                                                     • My Worst Investment Ever
                                                     • 9 Valuation Mistakes and How to Avoid Them
                                                     • Transform Your Business with Dr.Deming’s 14 Points
                                                     
                                                     

                                                     Andrew’s online programs

                                                     • Valuation Master Class
                                                     • The Become a Better Investor Community
                                                     • How to Start Building Your Wealth Investing in the Stock Market
                                                     • Finance Made Ridiculously Simple
                                                     • FVMR Investing: Quantamental Investing Across the World
                                                     • Become a Great Presenter and Increase Your Influence
                                                     • Transform Your Business with Dr. Deming’s 14 Points
                                                     • Achieve Your Goals
                                                     
                                                     

                                                     Connect with Andrew Stotz:

                                                     • astotz.com
                                                     • LinkedIn
                                                     • Facebook
                                                     • Instagram
                                                     • Threads
                                                     • Twitter
                                                     • YouTube
                                                     • My Worst Investment Ever Podcast
                                                     
                                                     ]]>197e1c62-9835-4710-837e-f31679fe80cfTue, 22 Oct 2024 06:00:00 +070016:23falsefullEnrich Your Future 16: The Estimated Return Is Not InevitableListen on

                                                     Apple | Listen Notes | Spotify | YouTube | Other

                                                     Quick take

                                                     In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 16: All Crystal Balls are Cloudy.

                                                     LEARNING: Estimated return is not always inevitable.

                                                      

                                                     “If returns are negative early on, don’t withdraw large amounts because when the market eventually recovers, you won’t have that money to earn your returns.”

                                                     Larry Swedroe

                                                      

                                                     In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                     Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 16: All Crystal Balls are Cloudy.

                                                     Chapter 16: All crystal balls are cloudy

                                                     In this chapter, Larry illustrates why past returns are not crystal balls that predict future returns.

                                                     According to Larry, the problem with all forecasts that deal with estimations of probabilities is that people tend to think of them in a deterministic way. He says that as an investor, you should think about returns with the idea that distribution and estimate are only the middle points.

                                                     Your plan has to be prepared for either the good tail to show up, which is easy to deal with and usually will allow you to take chips off the table and reduce your risk because you’ll be well ahead of your goal. But if the bad tail shows up, you may have to either work longer, plan on saving more, or rebalance, which means buying stocks at a tough time.

                                                     The threat of sequence risk

                                                     To demonstrate the danger of sequence risk, Larry asks us to imagine it’s 1973, and stocks have returned 8% in real terms and 10% in nominal returns. We’ve had similar results over the next 50 years. Say an investor in that time frame decides to withdraw 7% yearly from their portfolio in real terms because they know with their clear crystal ball that they will get 8% for the next 50 years.

                                                     This means if they take out, say, $100,000 in the first year, and inflation is 3%, to keep their actual spending the same, they have to take out $103,000. According to Larry, this investor will be bankrupt within 10 years due to the sequence of returns, which is the order in which the returns occur, not the returns themselves.

                                                     As you can see in the table below, despite providing an 8.7% per annum real return over the 27 years, because the S&P 500 Index declined by more than 37% from January 1973 through December 1974, withdrawing an inflation-adjusted 7% per annum in the portfolio caused it to be depleted by the end of 1982—in just 10 years! (Note that from January 1973 through October 1974, when the bear market ended, the S&P 500 lost 48%.)

                                                     Sacrificing expected returns

                                                     Larry says this example shows the danger of sequence risk and illustrates that the order of returns matters significantly in the decumulation phase because systematic withdrawals work like a dollar-cost averaging program in reverse—market declines are accentuated. This can cause principal loss, which the portfolio may never recover from.

                                                     In this case, the combination of the bear market and relatively high inflation caused the portfolio to shrink by almost 56% in the first two years. For the portfolio to be restored to its original $1 million level, the S&P 500 Index would have had to return 127% in 1975. And because of the inflation experienced, the amount to be withdrawn would have needed to increase from $70,000 to over $90,000. In such cases, the odds of outliving one’s assets significantly increase if you don’t adjust the plan (such as increasing savings, delaying retirement, or reducing the spending goal).

                                                     The order of returns matters

                                                     According to Larry, our investor made the mistake of treating the single-point estimate as if it were an inevitable outcome and not a single potential outcome within a broad spectrum of potential outcomes.

                                                     Another mistake our investor made was failing to consider that his investment experience might be different from the return over the entire period because of the impact of his withdrawals. In other words, the order of returns matters, not just the returns over the entire period.

                                                     Estimated return is not inevitable

                                                     Larry insists that since we live in a world with cloudy crystal balls, and all we can do is estimate returns, it is best to avoid treating a portfolio’s estimated return as inevitable. Consider the possible dispersion of likely returns and calculate the odds of successfully achieving the financial goal.

                                                     The goal is generally, though not always, defined as achieving and maintaining an acceptable lifestyle—not running out of money while still alive. In other words, the goal is not to retire with as much wealth as possible but to ensure you do not retire poor and risk running out of assets while still alive.

                                                     Using a Monte Carlo simulator to forecast the potential dispersion of returns

                                                     Larry says that forecasting the potential dispersion of returns is best accomplished through a Monte Carlo simulator—a computer simulation that uses random processes to model the impact of risk and uncertainty in financial and investment forecasting.

                                                     This tool allows one to see the probabilities of different possible outcomes of an investment strategy. The computer program will produce numerous random iterations (usually at least 1,000 and often many thousands), letting one see the odds of meeting a goal. Since thousands of iterations are run, one must think about probabilities instead of just one outcome.

                                                     Projecting the likelihood of success

                                                     Divide the Monte Carlo simulation based on your investment life into an accumulation phase when you’re working and making contributions and a distribution phase that begins when you retire and lasts as long as you live. The inputs into the Monte Carlo simulation are:

                                                     • The investment assumptions (expected returns, standard deviations, and correlations)
                                                     • Future deposits into the investment account
                                                     • The desired annual withdrawal amount
                                                     • The years the account must last
                                                     
                                                     

                                                     The output is summarized by assigning probabilities to the various investment outcomes.

                                                     The ultimate goal is to ensure you are comfortable with the projected likelihood of success—the odds you can withdraw sufficient funds from the portfolio each year and still achieve your financial goal.

                                                     Nobody can predict the future when people are involved

                                                     In conclusion, Larry reminds investors that crystal balls will always be cloudy when forecasting the future, be it the weather or stock market returns. He quotes Alan Greenspan’s advice: “Learn everything you can, collect all the data, crunch all the numbers before making a prediction or a financial forecast. Even then, accept and understand that nobody can predict the future when people are involved.”

                                                     However, Larry adds that the inability to forecast the future accurately does not render forecasting useless. It just means we must accept this shortcoming and take it into account. Another essential investment advice is to never make the mistake of treating even the highly likely as if it were inevitable.

                                                     Further reading

                                                     1. Didier Sornette, Why Stock Markets Crash (Princeton University Press 2002), p. 322.
                                                     
                                                     

                                                     Did you miss out on the previous chapters? Check them out:

                                                     Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                                                     • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                     • Enrich Your Future 02: How Markets Set Prices
                                                     • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                                     • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                                     • Listen on

                                                       Apple | Listen Notes | Spotify | YouTube | Other

                                                       Quick take

                                                       In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 16: All Crystal Balls are Cloudy.

                                                       LEARNING: Estimated return is not always inevitable.

                                                        

                                                       “If returns are negative early on, don’t withdraw large amounts because when the market eventually recovers, you won’t have that money to earn your returns.”

                                                       Larry Swedroe

                                                        

                                                       In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                       Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 16: All Crystal Balls are Cloudy.

                                                       Chapter 16: All crystal balls are cloudy

                                                       In this chapter, Larry illustrates why past returns are not crystal balls that predict future returns.

                                                       According to Larry, the problem with all forecasts that deal with estimations of probabilities is that people tend to think of them in a deterministic way. He says that as an investor, you should think about returns with the idea that distribution and estimate are only the middle points.

                                                       Your plan has to be prepared for either the good tail to show up, which is easy to deal with and usually will allow you to take chips off the table and reduce your risk because you’ll be well ahead of your goal. But if the bad tail shows up, you may have to either work longer, plan on saving more, or rebalance, which means buying stocks at a tough time.

                                                       The threat of sequence risk

                                                       To demonstrate the danger of sequence risk, Larry asks us to imagine it’s 1973, and stocks have returned 8% in real terms and 10% in nominal returns. We’ve had similar results over the next 50 years. Say an investor in that time frame decides to withdraw 7% yearly from their portfolio in real terms because they know with their clear crystal ball that they will get 8% for the next 50 years.

                                                       This means if they take out, say, $100,000 in the first year, and inflation is 3%, to keep their actual spending the same, they have to take out $103,000. According to Larry, this investor will be bankrupt within 10 years due to the sequence of returns, which is the order in which the returns occur, not the returns themselves.

                                                       As you can see in the table below, despite providing an 8.7% per annum real return over the 27 years, because the S&P 500 Index declined by more than 37% from January 1973 through December 1974, withdrawing an inflation-adjusted 7% per annum in the portfolio caused it to be depleted by the end of 1982—in just 10 years! (Note that from January 1973 through October 1974, when the bear market ended, the S&P 500 lost 48%.)

                                                       Sacrificing expected returns

                                                       Larry says this example shows the danger of sequence risk and illustrates that the order of returns matters significantly in the decumulation phase because systematic withdrawals work like a dollar-cost averaging program in reverse—market declines are accentuated. This can cause principal loss, which the portfolio may never recover from.

                                                       In this case, the combination of the bear market and relatively high inflation caused the portfolio to shrink by almost 56% in the first two years. For the portfolio to be restored to its original $1 million level, the S&P 500 Index would have had to return 127% in 1975. And because of the inflation experienced, the amount to be withdrawn would have needed to increase from $70,000 to over $90,000. In such cases, the odds of outliving one’s assets significantly increase if you don’t adjust the plan (such as increasing savings, delaying retirement, or reducing the spending goal).

                                                       The order of returns matters

                                                       According to Larry, our investor made the mistake of treating the single-point estimate as if it were an inevitable outcome and not a single potential outcome within a broad spectrum of potential outcomes.

                                                       Another mistake our investor made was failing to consider that his investment experience might be different from the return over the entire period because of the impact of his withdrawals. In other words, the order of returns matters, not just the returns over the entire period.

                                                       Estimated return is not inevitable

                                                       Larry insists that since we live in a world with cloudy crystal balls, and all we can do is estimate returns, it is best to avoid treating a portfolio’s estimated return as inevitable. Consider the possible dispersion of likely returns and calculate the odds of successfully achieving the financial goal.

                                                       The goal is generally, though not always, defined as achieving and maintaining an acceptable lifestyle—not running out of money while still alive. In other words, the goal is not to retire with as much wealth as possible but to ensure you do not retire poor and risk running out of assets while still alive.

                                                       Using a Monte Carlo simulator to forecast the potential dispersion of returns

                                                       Larry says that forecasting the potential dispersion of returns is best accomplished through a Monte Carlo simulator—a computer simulation that uses random processes to model the impact of risk and uncertainty in financial and investment forecasting.

                                                       This tool allows one to see the probabilities of different possible outcomes of an investment strategy. The computer program will produce numerous random iterations (usually at least 1,000 and often many thousands), letting one see the odds of meeting a goal. Since thousands of iterations are run, one must think about probabilities instead of just one outcome.

                                                       Projecting the likelihood of success

                                                       Divide the Monte Carlo simulation based on your investment life into an accumulation phase when you’re working and making contributions and a distribution phase that begins when you retire and lasts as long as you live. The inputs into the Monte Carlo simulation are:

                                                       • The investment assumptions (expected returns, standard deviations, and correlations)
                                                       • Future deposits into the investment account
                                                       • The desired annual withdrawal amount
                                                       • The years the account must last
                                                       
                                                       

                                                       The output is summarized by assigning probabilities to the various investment outcomes.

                                                       The ultimate goal is to ensure you are comfortable with the projected likelihood of success—the odds you can withdraw sufficient funds from the portfolio each year and still achieve your financial goal.

                                                       Nobody can predict the future when people are involved

                                                       In conclusion, Larry reminds investors that crystal balls will always be cloudy when forecasting the future, be it the weather or stock market returns. He quotes Alan Greenspan’s advice: “Learn everything you can, collect all the data, crunch all the numbers before making a prediction or a financial forecast. Even then, accept and understand that nobody can predict the future when people are involved.”

                                                       However, Larry adds that the inability to forecast the future accurately does not render forecasting useless. It just means we must accept this shortcoming and take it into account. Another essential investment advice is to never make the mistake of treating even the highly likely as if it were inevitable.

                                                       Further reading

                                                       1. Didier Sornette, Why Stock Markets Crash (Princeton University Press 2002), p. 322.
                                                       
                                                       

                                                       Did you miss out on the previous chapters? Check them out:

                                                       Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                                                       • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                       • Enrich Your Future 02: How Markets Set Prices
                                                       • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                                       • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                                       • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                                       • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                                       • Enrich Your Future 07: The Value of Security Analysis
                                                       • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                                       • Enrich Your Future 09: The Fed Model and the Money Illusion
                                                       
                                                       

                                                       Part II: Strategic Portfolio Decisions

                                                       • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                                       • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                                                       • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                                                       • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                                                       • Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
                                                       • Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
                                                       
                                                       

                                                       About Larry Swedroe

                                                       Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                       Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                       Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                       Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                        

                                                       [spp-transcript]

                                                        

                                                       Connect with Larry Swedroe

                                                       • LinkedIn
                                                       • Twitter
                                                       • Website
                                                       • Books
                                                       
                                                       

                                                       Andrew’s books

                                                       • How to Start Building Your Wealth Investing in the Stock Market
                                                       • My Worst Investment Ever
                                                       • 9 Valuation Mistakes and How to Avoid Them
                                                       • Transform Your Business with Dr.Deming’s 14 Points
                                                       
                                                       

                                                       Andrew’s online programs

                                                       • Valuation Master Class
                                                       • The Become a Better Investor Community
                                                       • How to Start Building Your Wealth Investing in the Stock Market
                                                       • Finance Made Ridiculously Simple
                                                       • FVMR Investing: Quantamental Investing Across the World
                                                       • Become a Great Presenter and Increase Your Influence
                                                       • Transform Your Business with Dr. Deming’s 14 Points
                                                       • Achieve Your Goals
                                                       
                                                       

                                                       Connect with Andrew Stotz:

                                                       • astotz.com
                                                       • LinkedIn
                                                       • Facebook
                                                       • Instagram
                                                       • Threads
                                                       • Twitter
                                                       • YouTube
                                                       • My Worst Investment Ever Podcast
                                                       
                                                       ]]>799d7fef-f31c-4bf4-81d7-eb3f2b345982Tue, 15 Oct 2024 06:00:00 +070036:04falsefullDamon Pistulka - The Role of Technology in Business GrowthBIO: Damon Pistulka, co-founder of Exit Your Way, is known for his hands-on, practical approach to helping business owners maximize value and achieve successful exits.

                                                       STORY: Damon explains his journey into understanding technology and its role in business growth.

                                                       LEARNING: Stay informed and adapt to changing industry trends. Adapt to changing customer expectations and preferences.

                                                        

                                                       “The simple things we can do with technology today make the customer experience so much better.”

                                                       Damon Pistulka

                                                        

                                                       Guest profile

                                                       Damon Pistulka, co-founder of Exit Your Way, is known for his hands-on, practical approach to helping business owners maximize value and achieve successful exits. With over 20 years of experience, Damon is dedicated to transforming businesses, enhancing profitability, and helping founders create lasting legacies​​.

                                                       Technology is your business ally

                                                       In today’s episode, Damon, who previously appeared on the podcast on episode Ep649: Be Careful of Concentration Risk, discusses the value of technology in running a business. He emphasizes the importance of robotic process automation, CRMs, and AI in modern business operations to accelerate value. In his opinion, technology allows businesses to do simple things that improve customer experience.

                                                       Damon highlights a couple of threats businesses face today that could be dealt with by adopting technology.

                                                       1. Rapid innovation is outpacing businesses. Those lagging behind will be overtaken by competitors who have adopted new technologies.
                                                       2. Aging workforce with limited new talent. There’s an aging workforce and limited new talent. As more people retire, businesses increasingly find it hard to replace the retirees with educated and qualified people.
                                                       3. Customers now expect top-tier service levels. Buyers are now demanding businesses provide instant feedback and real-time updates. Businesses that don’t meet customer expectations will not stay competitive.
                                                       
                                                       

                                                       Using technology to deal with the threats

                                                       Damon explains his approach to helping clients develop business growth strategies. He emphasizes the importance of starting with small, manageable changes and gradually scaling up.

                                                       Damon cautions entrepreneurs from trying to do it all. Instead, he advises starting with simple, practical changes, often referred to as ‘low-hanging fruits’—these are the tasks or opportunities that are the easiest to achieve and provide the quickest benefits. Gradually, as these are implemented, more complex systems can be adopted.

                                                       Seek out experts who can help you advance

                                                       Further, Damon advises seeking out experts who can help you advance in the particular area you’re focusing on. Then, work your way up as you get your company, your people, and your supplier base comfortable with these changes.

                                                       Get educated before adopting new technology

                                                       Damon also underscores the importance of getting educated before adopting new technology. He advises becoming familiar and comfortable enough with it to try it, enabling you to identify potential areas where the technology could help your business.

                                                       This approach instills a sense of preparedness and confidence. Then, he suggests hiring an expert to help you implement your new technologies and strategies.

                                                       Move fast

                                                       Another way to deal with the business threats is to move fast. Damon says that speed sells, and businesses must adopt a speed and innovation culture. This culture is about encouraging and rewarding quick decision-making, rapid implementation of ideas, and a constant drive for improvement. Technology will help you do things in half the time and stay efficient and competitive in your operations, which is a key aspect of this culture.

                                                       Just get started

                                                       Finally, according to Damon, just get started. Business owners wake up knowing what they have to do every day. By cutting the distractions and focusing on your core strengths and capabilities, you can stay reassured and focused. As Damon says, there’s a lot of time in your day if you throw out the junk.

                                                        

                                                       [spp-transcript]

                                                        

                                                       Connect with Damon Pistulka

                                                       • Linkedin
                                                       • Twitter
                                                       • Facebook
                                                       • YouTube 
                                                       • Website
                                                       
                                                       

                                                       Andrew’s books

                                                       • How to Start Building Your Wealth Investing in the Stock Market
                                                       • My Worst Investment Ever
                                                       • 9 Valuation Mistakes and How to Avoid Them
                                                       • Transform Your Business with Dr.Deming’s 14 Points
                                                       
                                                       

                                                       Andrew’s online programs

                                                       • Valuation Master Class
                                                       • The Become a Better Investor Community
                                                       • How to Start Building Your Wealth Investing in the Stock Market
                                                       • Finance Made Ridiculously Simple
                                                       • FVMR Investing: Quantamental Investing Across the World
                                                       • Become a Great Presenter and Increase Your Influence
                                                       • Transform Your Business with Dr. Deming’s 14 Points
                                                       • Achieve Your Goals
                                                       
                                                       

                                                       Connect with Andrew Stotz:

                                                       • astotz.com
                                                       • LinkedIn
                                                       • Facebook
                                                       • Instagram
                                                       • Threads
                                                       • Twitter
                                                       • YouTube
                                                       • My Worst Investment Ever Podcast
                                                       
                                                       ]]>BIO: Damon Pistulka, co-founder of Exit Your Way, is known for his hands-on, practical approach to helping business owners maximize value and achieve successful exits.

                                                       STORY: Damon explains his journey into understanding technology and its role in business growth.

                                                       LEARNING: Stay informed and adapt to changing industry trends. Adapt to changing customer expectations and preferences.

                                                        

                                                       “The simple things we can do with technology today make the customer experience so much better.”

                                                       Damon Pistulka

                                                        

                                                       Guest profile

                                                       Damon Pistulka, co-founder of Exit Your Way, is known for his hands-on, practical approach to helping business owners maximize value and achieve successful exits. With over 20 years of experience, Damon is dedicated to transforming businesses, enhancing profitability, and helping founders create lasting legacies​​.

                                                       Technology is your business ally

                                                       In today’s episode, Damon, who previously appeared on the podcast on episode Ep649: Be Careful of Concentration Risk, discusses the value of technology in running a business. He emphasizes the importance of robotic process automation, CRMs, and AI in modern business operations to accelerate value. In his opinion, technology allows businesses to do simple things that improve customer experience.

                                                       Damon highlights a couple of threats businesses face today that could be dealt with by adopting technology.

                                                       1. Rapid innovation is outpacing businesses. Those lagging behind will be overtaken by competitors who have adopted new technologies.
                                                       2. Aging workforce with limited new talent. There’s an aging workforce and limited new talent. As more people retire, businesses increasingly find it hard to replace the retirees with educated and qualified people.
                                                       3. Customers now expect top-tier service levels. Buyers are now demanding businesses provide instant feedback and real-time updates. Businesses that don’t meet customer expectations will not stay competitive.
                                                       
                                                       

                                                       Using technology to deal with the threats

                                                       Damon explains his approach to helping clients develop business growth strategies. He emphasizes the importance of starting with small, manageable changes and gradually scaling up.

                                                       Damon cautions entrepreneurs from trying to do it all. Instead, he advises starting with simple, practical changes, often referred to as ‘low-hanging fruits’—these are the tasks or opportunities that are the easiest to achieve and provide the quickest benefits. Gradually, as these are implemented, more complex systems can be adopted.

                                                       Seek out experts who can help you advance

                                                       Further, Damon advises seeking out experts who can help you advance in the particular area you’re focusing on. Then, work your way up as you get your company, your people, and your supplier base comfortable with these changes.

                                                       Get educated before adopting new technology

                                                       Damon also underscores the importance of getting educated before adopting new technology. He advises becoming familiar and comfortable enough with it to try it, enabling you to identify potential areas where the technology could help your business.

                                                       This approach instills a sense of preparedness and confidence. Then, he suggests hiring an expert to help you implement your new technologies and strategies.

                                                       Move fast

                                                       Another way to deal with the business threats is to move fast. Damon says that speed sells, and businesses must adopt a speed and innovation culture. This culture is about encouraging and rewarding quick decision-making, rapid implementation of ideas, and a constant drive for improvement. Technology will help you do things in half the time and stay efficient and competitive in your operations, which is a key aspect of this culture.

                                                       Just get started

                                                       Finally, according to Damon, just get started. Business owners wake up knowing what they have to do every day. By cutting the distractions and focusing on your core strengths and capabilities, you can stay reassured and focused. As Damon says, there’s a lot of time in your day if you throw out the junk.

                                                        

                                                       [spp-transcript]

                                                        

                                                       Connect with Damon Pistulka

                                                       • Linkedin
                                                       • Twitter
                                                       • Facebook
                                                       • YouTube 
                                                       • Website
                                                       
                                                       

                                                       Andrew’s books

                                                       • How to Start Building Your Wealth Investing in the Stock Market
                                                       • My Worst Investment Ever
                                                       • 9 Valuation Mistakes and How to Avoid Them
                                                       • Transform Your Business with Dr.Deming’s 14 Points
                                                       
                                                       

                                                       Andrew’s online programs

                                                       • Valuation Master Class
                                                       • The Become a Better Investor Community
                                                       • How to Start Building Your Wealth Investing in the Stock Market
                                                       • Finance Made Ridiculously Simple
                                                       • FVMR Investing: Quantamental Investing Across the World
                                                       • Become a Great Presenter and Increase Your Influence
                                                       • Transform Your Business with Dr. Deming’s 14 Points
                                                       • Achieve Your Goals
                                                       
                                                       

                                                       Connect with Andrew Stotz:

                                                       • astotz.com
                                                       • LinkedIn
                                                       • Facebook
                                                       • Instagram
                                                       • Threads
                                                       • Twitter
                                                       • YouTube
                                                       • My Worst Investment Ever Podcast
                                                       
                                                       ]]>519cfaf8-8dbc-4213-aae6-284974f982f5Thu, 10 Oct 2024 06:00:00 +070035:14falsefullEnrich Your Future 15: Individual Stocks Are Riskier Than You BelieveIn this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 15: Individual Stocks Are Riskier Than Investors Believe.

                                                       LEARNING: Don’t invest in individual stocks. Instead, diversify your portfolio to reduce your risk.

                                                        

                                                       “Diversification has been said to be the only free lunch in investing. Unfortunately, most investors fail to use the full buffet available.”

                                                       Larry Swedroe

                                                        

                                                       In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                       Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 15: Individual Stocks Are Riskier Than Investors Believe.

                                                       Chapter 15: Individual Stocks Are Riskier Than Investors Believe

                                                       In this chapter, Larry reveals the stark reality of investing in individual stocks, highlighting the significant risks involved. His aim is to help investors understand the potential pitfalls of this high-stakes game and why they should avoid it.

                                                       Given the apparent benefits of diversification, it’s baffling why investors don’t hold highly diversified portfolios. According to Larry, one reason is that most investors likely don’t understand how risky individual stocks are compared to owning a broad selection of hundreds or thousands of stocks.

                                                       Evidence that individual stocks are very risky

                                                       Larry notes that the stock market has returned roughly 10% per year over the last 100 years, and the standard deviation on an annual basis of a portfolio of a broad market of stocks has been about 20%. He observes that most people don’t understand that the average individual stock has a standard deviation of more than twice that.

                                                       In another study from 1983 to 2006 that covered the top 3,000 stocks, the stock market returned almost 13% per annum, but the median return was just 5.1%, nearly 8% below the market’s return. The mean annualized return was -1.1%. This means that if you randomly pick one stock, the odds would say you’re more likely to get -1.1%. However, if you own hundreds or thousands of stocks, the odds are in your favor, and you’ll get very close to that mean return.

                                                       Larry shares another stark example of the riskiness of individual stocks. Despite the 1990s being one of the greatest bull markets of all time, with the Russell 3000 providing an annualized return of 17.7% and a cumulative return of almost 410%, 22% of the 2,397 U.S. stocks in existence throughout the decade had negative absolute returns. This means they underperformed by at least 410%. Over the decade, inflation was a cumulative 33.5%, meaning they lost at least 33.5% in real terms.

                                                       In another study by Hendrik Bessembinder of all common stocks listed on the NYSE, Amex, and NASDAQ exchanges from 1926 through 2015 and included. He found:

                                                       • Only 47.7% of returns were more significant than the one-month Treasury rate.
                                                       • Even at the decade horizon, a minority of stocks outperformed Treasury bills.
                                                       • From the beginning of the sample or first appearance in the data through the end of the sample or delisting, and including delisting returns when appropriate, just 42.1% of common stocks had a holding period return greater than one-month Treasury bills.
                                                       • While more than 71% of individual stocks had a positive arithmetic average return over their entire life, only a minority (49.2%) of common stocks had a positive lifetime holding period return, and the median lifetime return was -3.7%. This is because of volatility and the difference in arithmetic (annual average) returns versus geometric (compound or annualized) returns. For example, if a stock loses 50% in the first year and then gains 60% in the second, it has a positive arithmetic return but has lost money (20%) and has a negative geometric return.
                                                       
                                                       

                                                       Bessembinder concluded that his results help to understand why active strategies, which tend to be poorly diversified, most often lead to underperformance. At the same time, he wrote that the results potentially justify a focus on less-diversified portfolios by investors who particularly value the possibility of “lottery-like” outcomes despite the knowledge that the poorly diversified portfolio will most likely underperform.

                                                       A diversified portfolio is the way to go

                                                       The results from the studies Larry has highlighted underscore the critical role of portfolio diversification. Diversification, often referred to as the only free lunch in investing, provides a sense of security and peace of mind. Unfortunately, many investors fail to fully utilize this powerful tool. They mistakenly believe that by limiting the number of stocks they hold, they can better manage their risks. In reality, a well-diversified portfolio is the key to long-term financial success.

                                                       Most professionals with PhDs in finance spend 100% of their time engaged in stock picking and have access to the world’s best databases and teams of professionals helping them. These individuals are unlikely to outperform. So why would an average investor think they have enough advantage over them? Larry’s stern advice to investors is not to play the game. His professional guidance is a beacon of reassurance in the complex world of investing, steering investors away from risky individual stocks and towards the safety of a diversified portfolio.

                                                       Investors make mistakes when they take idiosyncratic (unique), diversifiable, uncompensated risks. They do so because they are overconfident in their skills, overestimate the worth of their information, confuse the familiar with the safe, have the illusion of being in control, don’t understand how many individual stocks are needed to reduce diversifiable risks effectively, and don’t understand the difference between compensated and uncompensated risks (some risks are uncompensated because they are diversifiable).

                                                       Another likely explanation is that investors prefer skewness. They are willing to accept the high likelihood of underperformance in return for the small likelihood of owning the next Google. In other words, they like to buy lottery tickets. Larry says that if you have made any of these mistakes, you should do what all smart people do: Once they have learned that a behavior is a mistake, they correct it. So, steer away from risky individual stocks and go for the safety of a diversified portfolio.

                                                       Further reading

                                                       1. Longboard Asset Management, “The Capitalism Distribution Observations of Individual Common Stock Returns, 1983 – 2006.”
                                                       2. Hendrik Bessembinder, “Do Stocks Outperform Treasury Bills?” Journal of Financial Economics (September 2018).
                                                       
                                                       

                                                       Did you miss out on the previous chapters? Check them out:

                                                       Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                                                       • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                       • Enrich Your Future 02: How Markets Set Prices
                                                       • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                                       • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                                       • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                                       • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                                       • Enrich Your Future 07: The Value of Security Analysis
                                                       • In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 15: Individual Stocks Are Riskier Than Investors Believe.

                                                         LEARNING: Don’t invest in individual stocks. Instead, diversify your portfolio to reduce your risk.

                                                          

                                                         “Diversification has been said to be the only free lunch in investing. Unfortunately, most investors fail to use the full buffet available.”

                                                         Larry Swedroe

                                                          

                                                         In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                         Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 15: Individual Stocks Are Riskier Than Investors Believe.

                                                         Chapter 15: Individual Stocks Are Riskier Than Investors Believe

                                                         In this chapter, Larry reveals the stark reality of investing in individual stocks, highlighting the significant risks involved. His aim is to help investors understand the potential pitfalls of this high-stakes game and why they should avoid it.

                                                         Given the apparent benefits of diversification, it’s baffling why investors don’t hold highly diversified portfolios. According to Larry, one reason is that most investors likely don’t understand how risky individual stocks are compared to owning a broad selection of hundreds or thousands of stocks.

                                                         Evidence that individual stocks are very risky

                                                         Larry notes that the stock market has returned roughly 10% per year over the last 100 years, and the standard deviation on an annual basis of a portfolio of a broad market of stocks has been about 20%. He observes that most people don’t understand that the average individual stock has a standard deviation of more than twice that.

                                                         In another study from 1983 to 2006 that covered the top 3,000 stocks, the stock market returned almost 13% per annum, but the median return was just 5.1%, nearly 8% below the market’s return. The mean annualized return was -1.1%. This means that if you randomly pick one stock, the odds would say you’re more likely to get -1.1%. However, if you own hundreds or thousands of stocks, the odds are in your favor, and you’ll get very close to that mean return.

                                                         Larry shares another stark example of the riskiness of individual stocks. Despite the 1990s being one of the greatest bull markets of all time, with the Russell 3000 providing an annualized return of 17.7% and a cumulative return of almost 410%, 22% of the 2,397 U.S. stocks in existence throughout the decade had negative absolute returns. This means they underperformed by at least 410%. Over the decade, inflation was a cumulative 33.5%, meaning they lost at least 33.5% in real terms.

                                                         In another study by Hendrik Bessembinder of all common stocks listed on the NYSE, Amex, and NASDAQ exchanges from 1926 through 2015 and included. He found:

                                                         • Only 47.7% of returns were more significant than the one-month Treasury rate.
                                                         • Even at the decade horizon, a minority of stocks outperformed Treasury bills.
                                                         • From the beginning of the sample or first appearance in the data through the end of the sample or delisting, and including delisting returns when appropriate, just 42.1% of common stocks had a holding period return greater than one-month Treasury bills.
                                                         • While more than 71% of individual stocks had a positive arithmetic average return over their entire life, only a minority (49.2%) of common stocks had a positive lifetime holding period return, and the median lifetime return was -3.7%. This is because of volatility and the difference in arithmetic (annual average) returns versus geometric (compound or annualized) returns. For example, if a stock loses 50% in the first year and then gains 60% in the second, it has a positive arithmetic return but has lost money (20%) and has a negative geometric return.
                                                         
                                                         

                                                         Bessembinder concluded that his results help to understand why active strategies, which tend to be poorly diversified, most often lead to underperformance. At the same time, he wrote that the results potentially justify a focus on less-diversified portfolios by investors who particularly value the possibility of “lottery-like” outcomes despite the knowledge that the poorly diversified portfolio will most likely underperform.

                                                         A diversified portfolio is the way to go

                                                         The results from the studies Larry has highlighted underscore the critical role of portfolio diversification. Diversification, often referred to as the only free lunch in investing, provides a sense of security and peace of mind. Unfortunately, many investors fail to fully utilize this powerful tool. They mistakenly believe that by limiting the number of stocks they hold, they can better manage their risks. In reality, a well-diversified portfolio is the key to long-term financial success.

                                                         Most professionals with PhDs in finance spend 100% of their time engaged in stock picking and have access to the world’s best databases and teams of professionals helping them. These individuals are unlikely to outperform. So why would an average investor think they have enough advantage over them? Larry’s stern advice to investors is not to play the game. His professional guidance is a beacon of reassurance in the complex world of investing, steering investors away from risky individual stocks and towards the safety of a diversified portfolio.

                                                         Investors make mistakes when they take idiosyncratic (unique), diversifiable, uncompensated risks. They do so because they are overconfident in their skills, overestimate the worth of their information, confuse the familiar with the safe, have the illusion of being in control, don’t understand how many individual stocks are needed to reduce diversifiable risks effectively, and don’t understand the difference between compensated and uncompensated risks (some risks are uncompensated because they are diversifiable).

                                                         Another likely explanation is that investors prefer skewness. They are willing to accept the high likelihood of underperformance in return for the small likelihood of owning the next Google. In other words, they like to buy lottery tickets. Larry says that if you have made any of these mistakes, you should do what all smart people do: Once they have learned that a behavior is a mistake, they correct it. So, steer away from risky individual stocks and go for the safety of a diversified portfolio.

                                                         Further reading

                                                         1. Longboard Asset Management, “The Capitalism Distribution Observations of Individual Common Stock Returns, 1983 – 2006.”
                                                         2. Hendrik Bessembinder, “Do Stocks Outperform Treasury Bills?” Journal of Financial Economics (September 2018).
                                                         
                                                         

                                                         Did you miss out on the previous chapters? Check them out:

                                                         Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

                                                         • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                         • Enrich Your Future 02: How Markets Set Prices
                                                         • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                                         • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                                         • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                                         • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                                         • Enrich Your Future 07: The Value of Security Analysis
                                                         • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                                         • Enrich Your Future 09: The Fed Model and the Money Illusion
                                                         
                                                         

                                                         Part II: Strategic Portfolio Decisions

                                                         • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                                         • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                                                         • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                                                         • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                                                         • Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
                                                         
                                                         

                                                         About Larry Swedroe

                                                         Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                         Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                         Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                         Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                          

                                                         [spp-transcript]

                                                          

                                                         Connect with Larry Swedroe

                                                         • LinkedIn
                                                         • Twitter
                                                         • Website
                                                         • Books
                                                         
                                                         

                                                         Andrew’s books

                                                         • How to Start Building Your Wealth Investing in the Stock Market
                                                         • My Worst Investment Ever
                                                         • 9 Valuation Mistakes and How to Avoid Them
                                                         • Transform Your Business with Dr.Deming’s 14 Points
                                                         
                                                         

                                                         Andrew’s online programs

                                                         • Valuation Master Class
                                                         • The Become a Better Investor Community
                                                         • How to Start Building Your Wealth Investing in the Stock Market
                                                         • Finance Made Ridiculously Simple
                                                         • FVMR Investing: Quantamental Investing Across the World
                                                         • Become a Great Presenter and Increase Your Influence
                                                         • Transform Your Business with Dr. Deming’s 14 Points
                                                         • Achieve Your Goals
                                                         
                                                         

                                                         Connect with Andrew Stotz:

                                                         • astotz.com
                                                         • LinkedIn
                                                         • Facebook
                                                         • Instagram
                                                         • Threads
                                                         • Twitter
                                                         • YouTube
                                                         • My Worst Investment Ever Podcast
                                                         
                                                         ]]>c8f785aa-7c18-48f3-803d-3dbce8b0ea95Tue, 24 Sep 2024 06:00:00 +070017:14falsefullAva Benesocky - Commit and Take Action on Your InvestmentBIO: Ava Benesocky is an author, public speaker, educator, CEO, and Co-Founder of CPI Capital, a uniquely innovative real estate private equity firm that helps investors invest in multifamily assets.

                                                         STORY: Ava became passionate about real estate when she was young. At 15, she convinced her parents to invest $13,000 in a course by Scott McGillivray on renovating and selling homes. Ava never did anything with the course, which made it the worst investment ever.

                                                         LEARNING: If you invest in anything, ensure you’re ready to be committed, take action, and focus completely on it. Beware of shiny object syndrome.

                                                          

                                                         “If you’re ever going to invest in something, you have to take action, or else it’s a total waste of time and money. And what’s the point?”

                                                         Ava Benesocky

                                                          

                                                         Guest profile

                                                         Ava Benesocky is an author, public speaker, educator, CEO, and Co-Founder of CPI Capital, a uniquely innovative real estate private equity firm that helps investors invest in multifamily assets.

                                                         She is the Host of Real Estate Investing Demystified with August Biniaz, who was Ep 784.

                                                         Ava has been featured in publications such as Forbes, Yahoo Finance, and numerous PodCasts and YouTube shows. Ava helps busy professionals earn passive income through Multifamily Real Estate investments.

                                                         Worst investment ever

                                                         Ava became passionate about real estate when she was young. At 15, she convinced her parents to invest $13,000 in a course by Scott McGillivray on renovating and selling homes. Ava never did anything with the course, which made it the worst investment ever.

                                                         She tried to get it started, but there were so many moving components, and the process was so convoluted that she got scared. It all fell through the cracks. Ava never ended up taking action on it.

                                                         Lessons learned

                                                         • If you invest in anything, ensure you’re ready to be committed, take action, and focus completely on it.
                                                         • Beware of shiny object syndrome.
                                                         
                                                         

                                                         Andrew’s takeaways

                                                         • Embrace boring, dull, consistent, and regular assets.
                                                         • Before buying a course, ask yourself if you have the time to commit to it or if it is better to get someone to help you achieve what you could if you took the course.
                                                         
                                                         

                                                         Actionable advice

                                                         Refrain from being impulsive when buying courses. Take your time and ask yourself if you have time for it. Can you block it off on your calendar? If not, do not get it.

                                                         Ava’s recommendations

                                                         Ava recommends listening to her podcast Real Estate Investing Demystified, where she shares her personal experiences, interviews industry experts, and provides advice on real estate investing and other investment opportunities.

                                                         No.1 goal for the next 12 months

                                                         Ava’s number one goal for the next 12 months is to continue building a couple of departments in the company and closing on a couple more assets. On a personal level, she will continue taking care of her mind, body, and family.

                                                         Parting words

                                                          

                                                         “Thank you so much for letting me be on your podcast, and good luck to everybody out there in whatever venture they decide to take.”

                                                         Ava Benesocky

                                                          

                                                         [spp-transcript]

                                                          

                                                         Connect with Ava Benesocky

                                                         • Linkedin
                                                         • Facebook
                                                         • Podcast  
                                                         • YouTube 
                                                         • Website
                                                         
                                                         

                                                         Andrew’s books

                                                         • How to Start Building Your Wealth Investing in the Stock Market
                                                         • My Worst Investment Ever
                                                         • 9 Valuation Mistakes and How to Avoid Them
                                                         • Transform Your Business with Dr.Deming’s 14 Points
                                                         
                                                         

                                                         Andrew’s online programs

                                                         • Valuation Master Class
                                                         • The Become a Better Investor Community
                                                         • How to Start Building Your Wealth Investing in the Stock Market
                                                         • Finance Made Ridiculously Simple
                                                         • FVMR Investing: Quantamental Investing Across the World
                                                         • Become a Great Presenter and Increase Your Influence
                                                         • Transform Your Business with Dr. Deming’s 14 Points
                                                         • Achieve Your Goals
                                                         
                                                         

                                                         Connect with Andrew Stotz:

                                                         • astotz.com
                                                         • LinkedIn
                                                         • Facebook
                                                         • Instagram
                                                         • Threads
                                                         • Twitter
                                                         • YouTube
                                                         • My Worst Investment Ever Podcast
                                                         
                                                         ]]>BIO: Ava Benesocky is an author, public speaker, educator, CEO, and Co-Founder of CPI Capital, a uniquely innovative real estate private equity firm that helps investors invest in multifamily assets.

                                                         STORY: Ava became passionate about real estate when she was young. At 15, she convinced her parents to invest $13,000 in a course by Scott McGillivray on renovating and selling homes. Ava never did anything with the course, which made it the worst investment ever.

                                                         LEARNING: If you invest in anything, ensure you’re ready to be committed, take action, and focus completely on it. Beware of shiny object syndrome.

                                                          

                                                         “If you’re ever going to invest in something, you have to take action, or else it’s a total waste of time and money. And what’s the point?”

                                                         Ava Benesocky

                                                          

                                                         Guest profile

                                                         Ava Benesocky is an author, public speaker, educator, CEO, and Co-Founder of CPI Capital, a uniquely innovative real estate private equity firm that helps investors invest in multifamily assets.

                                                         She is the Host of Real Estate Investing Demystified with August Biniaz, who was Ep 784.

                                                         Ava has been featured in publications such as Forbes, Yahoo Finance, and numerous PodCasts and YouTube shows. Ava helps busy professionals earn passive income through Multifamily Real Estate investments.

                                                         Worst investment ever

                                                         Ava became passionate about real estate when she was young. At 15, she convinced her parents to invest $13,000 in a course by Scott McGillivray on renovating and selling homes. Ava never did anything with the course, which made it the worst investment ever.

                                                         She tried to get it started, but there were so many moving components, and the process was so convoluted that she got scared. It all fell through the cracks. Ava never ended up taking action on it.

                                                         Lessons learned

                                                         • If you invest in anything, ensure you’re ready to be committed, take action, and focus completely on it.
                                                         • Beware of shiny object syndrome.
                                                         
                                                         

                                                         Andrew’s takeaways

                                                         • Embrace boring, dull, consistent, and regular assets.
                                                         • Before buying a course, ask yourself if you have the time to commit to it or if it is better to get someone to help you achieve what you could if you took the course.
                                                         
                                                         

                                                         Actionable advice

                                                         Refrain from being impulsive when buying courses. Take your time and ask yourself if you have time for it. Can you block it off on your calendar? If not, do not get it.

                                                         Ava’s recommendations

                                                         Ava recommends listening to her podcast Real Estate Investing Demystified, where she shares her personal experiences, interviews industry experts, and provides advice on real estate investing and other investment opportunities.

                                                         No.1 goal for the next 12 months

                                                         Ava’s number one goal for the next 12 months is to continue building a couple of departments in the company and closing on a couple more assets. On a personal level, she will continue taking care of her mind, body, and family.

                                                         Parting words

                                                          

                                                         “Thank you so much for letting me be on your podcast, and good luck to everybody out there in whatever venture they decide to take.”

                                                         Ava Benesocky

                                                          

                                                         [spp-transcript]

                                                          

                                                         Connect with Ava Benesocky

                                                         • Linkedin
                                                         • Facebook
                                                         • Podcast  
                                                         • YouTube 
                                                         • Website
                                                         
                                                         

                                                         Andrew’s books

                                                         • How to Start Building Your Wealth Investing in the Stock Market
                                                         • My Worst Investment Ever
                                                         • 9 Valuation Mistakes and How to Avoid Them
                                                         • Transform Your Business with Dr.Deming’s 14 Points
                                                         
                                                         

                                                         Andrew’s online programs

                                                         • Valuation Master Class
                                                         • The Become a Better Investor Community
                                                         • How to Start Building Your Wealth Investing in the Stock Market
                                                         • Finance Made Ridiculously Simple
                                                         • FVMR Investing: Quantamental Investing Across the World
                                                         • Become a Great Presenter and Increase Your Influence
                                                         • Transform Your Business with Dr. Deming’s 14 Points
                                                         • Achieve Your Goals
                                                         
                                                         

                                                         Connect with Andrew Stotz:

                                                         • astotz.com
                                                         • LinkedIn
                                                         • Facebook
                                                         • Instagram
                                                         • Threads
                                                         • Twitter
                                                         • YouTube
                                                         • My Worst Investment Ever Podcast
                                                         
                                                         ]]>7bbdbfcc-e587-422d-b365-bc541baf4479Thu, 19 Sep 2024 06:00:00 +070028:48falsefullEnrich Your Future 14: Stocks Are Risky No Matter How Long the HorizonIn this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 14: Stocks Are Risky No Matter How Long the Horizon.

                                                         LEARNING: Stocks are risky no matter the length of your investment horizon

                                                          

                                                         “Investors should never take more risk than is appropriate to their personal situation.”

                                                         Larry Swedroe

                                                          

                                                         In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                         Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 14: Stocks Are Risky No Matter How Long the Horizon.

                                                         Chapter 14: Stocks Are Risky No Matter How Long the Horizon

                                                         In this chapter, Larry illustrates why stocks are risky no matter how long the investment horizon is.

                                                         According to Larry, the claim that stocks are not risky if one’s horizon is long is based on just one set of data (the U.S.) for one period (albeit a long one). It could be that the results were due to a ‘lucky draw.’ In other words, if stocks are only risky when one’s horizon is short, we should see evidence of this in other markets. Unfortunately, investors in many different markets did not receive the kind of returns U.S. investors did.

                                                         Historical examples of stock market risks

                                                         Larry presents evidence from several markets, reinforcing the historical data that stocks are also risky over the long term.

                                                         First, Larry looks at U.S. equity returns 20 years back from 1949. The S&P 500 Index had returned 3.1 percent per year, underperforming long-term government bonds by 0.8 percent per year—so much for the argument that stocks always beat bonds if the horizon is 20 years or more.

                                                         In 1900, the Egyptian stock market was the fifth largest in the world, attracting significant capital inflows from global investors. However, those investors are still waiting for the return ON their capital, let alone the return OF their capital.

                                                         In the 1880s, two promising countries in the Western Hemisphere received capital inflows from Europe for development purposes: the U.S. and Argentina. One group of long-term investors was well rewarded, while the other was not.

                                                         Finally, in December 1989, the Nikkei index reached an intraday all-time high of 38,957. From 1990 through 2022, Japanese large-cap stocks (MSCI/Nomura) returned just 0.2 percent a year—a total return of just 6 percent. Considering cumulative inflation over the period was about 15 percent, Japanese large-cap stocks lost about 9 percent in real terms over the 33 years.

                                                         Taking the risk of equity ownership

                                                         Larry notes that the most crucial lesson investors need to learn from this evidence is that while it is true that the longer your investment horizon, the greater your ability to take the risk of investing in stocks (because you have a greater ability to wait out a bear market without having to sell to raise capital), stocks are risky no matter the length of your investment horizon.

                                                         In fact, that is precisely why U.S. stocks have generally (but not always) provided such great returns over the long term. Investors know that stocks are always risky, and thus, they price stocks in a manner that provides them with an expected (but not guaranteed) risk premium.

                                                         In other words, stocks must be priced low enough to attract investors with a risk premium large enough to compensate them for taking the risk of equity ownership. Because the majority of investors are risk-averse, the equity risk premium has historically been large.

                                                         Things that never happened before do happen

                                                         Larry warns that investors should never take more risk than is appropriate to their personal situation. It is also important to remember these words of caution from Nassim Nicholas Taleb: “History teaches us that things that never happened before do happen.” With that in mind, you will be well served if you never treat the highly unlikely (a very long or permanent bear market) as impossible.

                                                         In addition, investors should diversify their portfolios against risks that can show up and not have all of their assets in any one country or asset class. This is because any of them can have very long periods of poor performance. He insists that having long periods of poor performance is not a reason to avoid an asset class. It’s a reason why investors should diversify.

                                                         Further reading

                                                         1. Terry Burnham, Mean Markets and Lizard Brains (Wiley 2005).
                                                         2. Nassim Nicholas Taleb, Fooled by Randomness (Random House, 2005).
                                                         
                                                         

                                                         Did you miss out on the previous chapters? Check them out:

                                                         • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                         • Enrich Your Future 02: How Markets Set Prices
                                                         • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                                         • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                                         • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                                         • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                                         • Enrich Your Future 07: The Value of Security Analysis
                                                         • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                                         • Enrich Your Future 09: The Fed Model and the Money Illusion
                                                         • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                                         • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                                                         • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                                                         • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                                                         
                                                         

                                                         About Larry Swedroe

                                                         Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                         Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                         Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on...]]>In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 14: Stocks Are Risky No Matter How Long the Horizon.

                                                         LEARNING: Stocks are risky no matter the length of your investment horizon

                                                          

                                                         “Investors should never take more risk than is appropriate to their personal situation.”

                                                         Larry Swedroe

                                                          

                                                         In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                         Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 14: Stocks Are Risky No Matter How Long the Horizon.

                                                         Chapter 14: Stocks Are Risky No Matter How Long the Horizon

                                                         In this chapter, Larry illustrates why stocks are risky no matter how long the investment horizon is.

                                                         According to Larry, the claim that stocks are not risky if one’s horizon is long is based on just one set of data (the U.S.) for one period (albeit a long one). It could be that the results were due to a ‘lucky draw.’ In other words, if stocks are only risky when one’s horizon is short, we should see evidence of this in other markets. Unfortunately, investors in many different markets did not receive the kind of returns U.S. investors did.

                                                         Historical examples of stock market risks

                                                         Larry presents evidence from several markets, reinforcing the historical data that stocks are also risky over the long term.

                                                         First, Larry looks at U.S. equity returns 20 years back from 1949. The S&P 500 Index had returned 3.1 percent per year, underperforming long-term government bonds by 0.8 percent per year—so much for the argument that stocks always beat bonds if the horizon is 20 years or more.

                                                         In 1900, the Egyptian stock market was the fifth largest in the world, attracting significant capital inflows from global investors. However, those investors are still waiting for the return ON their capital, let alone the return OF their capital.

                                                         In the 1880s, two promising countries in the Western Hemisphere received capital inflows from Europe for development purposes: the U.S. and Argentina. One group of long-term investors was well rewarded, while the other was not.

                                                         Finally, in December 1989, the Nikkei index reached an intraday all-time high of 38,957. From 1990 through 2022, Japanese large-cap stocks (MSCI/Nomura) returned just 0.2 percent a year—a total return of just 6 percent. Considering cumulative inflation over the period was about 15 percent, Japanese large-cap stocks lost about 9 percent in real terms over the 33 years.

                                                         Taking the risk of equity ownership

                                                         Larry notes that the most crucial lesson investors need to learn from this evidence is that while it is true that the longer your investment horizon, the greater your ability to take the risk of investing in stocks (because you have a greater ability to wait out a bear market without having to sell to raise capital), stocks are risky no matter the length of your investment horizon.

                                                         In fact, that is precisely why U.S. stocks have generally (but not always) provided such great returns over the long term. Investors know that stocks are always risky, and thus, they price stocks in a manner that provides them with an expected (but not guaranteed) risk premium.

                                                         In other words, stocks must be priced low enough to attract investors with a risk premium large enough to compensate them for taking the risk of equity ownership. Because the majority of investors are risk-averse, the equity risk premium has historically been large.

                                                         Things that never happened before do happen

                                                         Larry warns that investors should never take more risk than is appropriate to their personal situation. It is also important to remember these words of caution from Nassim Nicholas Taleb: “History teaches us that things that never happened before do happen.” With that in mind, you will be well served if you never treat the highly unlikely (a very long or permanent bear market) as impossible.

                                                         In addition, investors should diversify their portfolios against risks that can show up and not have all of their assets in any one country or asset class. This is because any of them can have very long periods of poor performance. He insists that having long periods of poor performance is not a reason to avoid an asset class. It’s a reason why investors should diversify.

                                                         Further reading

                                                         1. Terry Burnham, Mean Markets and Lizard Brains (Wiley 2005).
                                                         2. Nassim Nicholas Taleb, Fooled by Randomness (Random House, 2005).
                                                         
                                                         

                                                         Did you miss out on the previous chapters? Check them out:

                                                         • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                         • Enrich Your Future 02: How Markets Set Prices
                                                         • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                                         • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                                         • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                                         • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                                         • Enrich Your Future 07: The Value of Security Analysis
                                                         • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                                         • Enrich Your Future 09: The Fed Model and the Money Illusion
                                                         • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                                         • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                                                         • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                                                         • Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
                                                         
                                                         

                                                         About Larry Swedroe

                                                         Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                         Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                         Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                         Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                          

                                                         [spp-transcript]

                                                          

                                                         Connect with Larry Swedroe

                                                         • LinkedIn
                                                         • Twitter
                                                         • Website
                                                         • Books
                                                         
                                                         

                                                         Andrew’s books

                                                         • How to Start Building Your Wealth Investing in the Stock Market
                                                         • My Worst Investment Ever
                                                         • 9 Valuation Mistakes and How to Avoid Them
                                                         • Transform Your Business with Dr.Deming’s 14 Points
                                                         
                                                         

                                                         Andrew’s online programs

                                                         • Valuation Master Class
                                                         • The Become a Better Investor Community
                                                         • How to Start Building Your Wealth Investing in the Stock Market
                                                         • Finance Made Ridiculously Simple
                                                         • FVMR Investing: Quantamental Investing Across the World
                                                         • Become a Great Presenter and Increase Your Influence
                                                         • Transform Your Business with Dr. Deming’s 14 Points
                                                         • Achieve Your Goals
                                                         
                                                         

                                                         Connect with Andrew Stotz:

                                                         • astotz.com
                                                         • LinkedIn
                                                         • Facebook
                                                         • Instagram
                                                         • Threads
                                                         • Twitter
                                                         • YouTube
                                                         • My Worst Investment Ever Podcast
                                                         
                                                         ]]>d8eb1f6a-ee01-42c6-9fbf-e958d2adc312Tue, 17 Sep 2024 06:00:00 +070019:03falsefullPritesh Ruparel – Put Yourself in a Position to Get LuckyBIO: Pritesh Ruparel is the CEO of ALT21, a leading tech company in hedging and currency solutions.

                                                         STORY: Pritesh found a good trade and invested 100% in it. His manager later advised him to liquidate that position because it was too concentrated. A day after Pritesh liquidated, a natural disaster occurred, and the spread went from $10 to $250 in an hour.

                                                         LEARNING: Put yourself in a position to get lucky. Never decide against your gut. Stay grounded between the highs and the lows.

                                                          

                                                         “The worst thing you can do is to trade on something or to make a decision that you don’t 100% agree with.”

                                                         Pritesh Ruparel

                                                          

                                                         Guest profile

                                                         Pritesh Ruparel is the CEO of ALT21, a leading tech company in hedging and currency solutions. With two decades of expertise in financial derivatives and structured finance, he leverages technology to make financial products accessible and affordable, aiming to save small and medium-sized enterprises (SMEs) millions annually on international transactions.

                                                         Worst investment ever

                                                         Pritesh’s first trading role was as a market maker in commodity relatives. One summer, he put a ton of analysis into a particular commodity spread trade. Pritesh thought the risk-to-reward looked good, but the trade was not doing anything. Nobody was marking the trade. Pritesh thought this was insane, so he went all in. He had the biggest position possible in that trade and it was 100% of his portfolio.

                                                         A manager advised Pritesh to liquidate the position because it was too concentrated. A day after Pritesh liquidated, a natural disaster occurred. The position benefited from this disaster and went from $10 to $250 in an hour. Unfortunately, Pritesh could have earned so much if only he had not liquidated.

                                                         Lessons learned

                                                         • Put yourself in a position to get lucky.
                                                         • When you start any role, listen, learn as much as possible, and take advice.
                                                         • Never decide against your gut.
                                                         • Never make a decision that you don’t agree with 100%.
                                                         
                                                         

                                                         Actionable advice

                                                         Stay grounded between the highs and the lows. Ultimately, you’ll be fine if you make decisions that align with what you believe in. This can give you a sense of confidence and conviction in your decisions.

                                                         Pritesh’s recommendations

                                                         Pritesh recommends building systems, processes, or resources that suit your risk appetite, emotional intelligence, and patience. This can enhance your decision-making and risk management, as it aligns with your personal attributes.

                                                         No.1 goal for the next 12 months

                                                         Pritesh’s number one goal for the next 12 months is to have repeatable, scalable processes for his go-to-market and use that to make an impact globally.

                                                         Parting words

                                                          

                                                         “Remember, it’s a marathon, not a sprint.”

                                                         Pritesh Ruparel

                                                          

                                                         [spp-transcript]

                                                          

                                                         Connect with Pritesh Ruparel

                                                         • LinkedIn
                                                         • Website
                                                         
                                                         

                                                         Andrew’s books

                                                         • How to Start Building Your Wealth Investing in the Stock Market
                                                         • My Worst Investment Ever
                                                         • 9 Valuation Mistakes and How to Avoid Them
                                                         • Transform Your Business with Dr.Deming’s 14 Points
                                                         
                                                         

                                                         Andrew’s online programs

                                                         • Valuation Master Class
                                                         • The Become a Better Investor Community
                                                         • How to Start Building Your Wealth Investing in the Stock Market
                                                         • Finance Made Ridiculously Simple
                                                         • FVMR Investing: Quantamental Investing Across the World
                                                         • Become a Great Presenter and Increase Your Influence
                                                         • Transform Your Business with Dr. Deming’s 14 Points
                                                         • Achieve Your Goals
                                                         
                                                         

                                                         Connect with Andrew Stotz:

                                                         • astotz.com
                                                         • LinkedIn
                                                         • Facebook
                                                         • Instagram
                                                         • Threads
                                                         • Twitter
                                                         • YouTube
                                                         • My Worst Investment Ever Podcast
                                                         
                                                         ]]>BIO: Pritesh Ruparel is the CEO of ALT21, a leading tech company in hedging and currency solutions.

                                                         STORY: Pritesh found a good trade and invested 100% in it. His manager later advised him to liquidate that position because it was too concentrated. A day after Pritesh liquidated, a natural disaster occurred, and the spread went from $10 to $250 in an hour.

                                                         LEARNING: Put yourself in a position to get lucky. Never decide against your gut. Stay grounded between the highs and the lows.

                                                          

                                                         “The worst thing you can do is to trade on something or to make a decision that you don’t 100% agree with.”

                                                         Pritesh Ruparel

                                                          

                                                         Guest profile

                                                         Pritesh Ruparel is the CEO of ALT21, a leading tech company in hedging and currency solutions. With two decades of expertise in financial derivatives and structured finance, he leverages technology to make financial products accessible and affordable, aiming to save small and medium-sized enterprises (SMEs) millions annually on international transactions.

                                                         Worst investment ever

                                                         Pritesh’s first trading role was as a market maker in commodity relatives. One summer, he put a ton of analysis into a particular commodity spread trade. Pritesh thought the risk-to-reward looked good, but the trade was not doing anything. Nobody was marking the trade. Pritesh thought this was insane, so he went all in. He had the biggest position possible in that trade and it was 100% of his portfolio.

                                                         A manager advised Pritesh to liquidate the position because it was too concentrated. A day after Pritesh liquidated, a natural disaster occurred. The position benefited from this disaster and went from $10 to $250 in an hour. Unfortunately, Pritesh could have earned so much if only he had not liquidated.

                                                         Lessons learned

                                                         • Put yourself in a position to get lucky.
                                                         • When you start any role, listen, learn as much as possible, and take advice.
                                                         • Never decide against your gut.
                                                         • Never make a decision that you don’t agree with 100%.
                                                         
                                                         

                                                         Actionable advice

                                                         Stay grounded between the highs and the lows. Ultimately, you’ll be fine if you make decisions that align with what you believe in. This can give you a sense of confidence and conviction in your decisions.

                                                         Pritesh’s recommendations

                                                         Pritesh recommends building systems, processes, or resources that suit your risk appetite, emotional intelligence, and patience. This can enhance your decision-making and risk management, as it aligns with your personal attributes.

                                                         No.1 goal for the next 12 months

                                                         Pritesh’s number one goal for the next 12 months is to have repeatable, scalable processes for his go-to-market and use that to make an impact globally.

                                                         Parting words

                                                          

                                                         “Remember, it’s a marathon, not a sprint.”

                                                         Pritesh Ruparel

                                                          

                                                         [spp-transcript]

                                                          

                                                         Connect with Pritesh Ruparel

                                                         • LinkedIn
                                                         • Website
                                                         
                                                         

                                                         Andrew’s books

                                                         • How to Start Building Your Wealth Investing in the Stock Market
                                                         • My Worst Investment Ever
                                                         • 9 Valuation Mistakes and How to Avoid Them
                                                         • Transform Your Business with Dr.Deming’s 14 Points
                                                         
                                                         

                                                         Andrew’s online programs

                                                         • Valuation Master Class
                                                         • The Become a Better Investor Community
                                                         • How to Start Building Your Wealth Investing in the Stock Market
                                                         • Finance Made Ridiculously Simple
                                                         • FVMR Investing: Quantamental Investing Across the World
                                                         • Become a Great Presenter and Increase Your Influence
                                                         • Transform Your Business with Dr. Deming’s 14 Points
                                                         • Achieve Your Goals
                                                         
                                                         

                                                         Connect with Andrew Stotz:

                                                         • astotz.com
                                                         • LinkedIn
                                                         • Facebook
                                                         • Instagram
                                                         • Threads
                                                         • Twitter
                                                         • YouTube
                                                         • My Worst Investment Ever Podcast
                                                         
                                                         ]]>5ed48bd9-e191-4b59-8913-1f6ba5a75fc4Thu, 12 Sep 2024 06:00:00 +070028:53falsefullEnrich Your Future 13: Past Performance Is Not a Predictor of Future PerformanceIn this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 13: Between a Rock and a Hard Place.

                                                         LEARNING: Past performance is not a strong predictor of future performance.

                                                          

                                                         “If you must invest actively, find active funds that design their strategies more intelligently to take advantage of the problems and at least avoid pitfalls.”

                                                         Larry Swedroe

                                                          

                                                         In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                         Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 13: Between a Rock and a Hard Place.

                                                         Chapter 13: Between a Rock and a Hard Place

                                                         In this chapter, Larry illustrates why past performance is not a strong predictor of future performance.

                                                         Academic research has found that prominent financial advisors, investment policy committees, and pension and retirement plans engage top academic practitioners to help them identify future managers who will outperform the market. Such entities only hire managers with a track record of outperforming. They analyze their performance to see if it is statistically significant.

                                                         However, research also shows that, on average, the active managers chosen based on outstanding track records have failed to live up to expectations. The underperformance relative to passive benchmarks invariably leads decision-makers to fire the active manager. And the process begins anew.

                                                         A new round of due diligence is performed, and a new manager is selected to replace the poorly performing one. And, almost invariably, the process is repeated a few years later. So whenever pension plans interview Larry and he notices this hiring pattern, he always asks them what their hiring process is and what they’re doing differently this time since, you know, the same process failed persistently, causing regular turnover of managers. Nobody has ever answered that question.

                                                         According to Larry, many individual investors go through the same motions of picking a manager and end up with the same results—a high likelihood of poor performance.

                                                         Doing the same thing over and over expecting a different result is insanity

                                                         Larry observes that the conventional wisdom that past performance is a strong predictor of future performance is so firmly ingrained in our culture that it seems almost no one stops to ask if it is correct, even in the face of persistent failure. Larry wonders why investors aren’t asking themselves: “If the process I used to choose a manager that would deliver outperformance failed, and I use the same process the next time, why should I expect anything but failure the next time?”

                                                         The answer is painfully apparent. If you don’t do anything different, you should expect the same result. Yet, so many investors do not ask this simple question.

                                                         Larry insists that it is essential to understand that neither the purveyors of active management nor the gatekeepers want you to ask that question. If you did, they would go out of business. You, on the other hand, should ask that question. You must provide the best returns to yourself or to members of the plan for which you are a trustee, not to give the fund managers or consultants a living.

                                                         Break the cycle of repeating past mistakes

                                                         Larry urges investors to reconsider their approach. The odds of selecting active managers who will outperform on a risk-adjusted basis over the long term are so poor that it’s not prudent to try. However, it doesn’t have to be that way. Investors would benefit from George Santayana’s advice: “Those who cannot remember the past are condemned to repeat it.”

                                                         Anyone who insists on hiring active managers should look for a manager with low costs, low turnover, no style drifting, systematic strategies, and broad diversification (i.e., investing in a wide range of assets to spread risk). You are better off trading with a fund that owns hundreds of stocks because that narrows the dispersion of outcomes, which means you’re taking less risk.

                                                         Further reading

                                                         1. Herman Brodie and Klaus Harnack, “The Trust Mandate,” (Harriman House, 2018).
                                                         2. Howard Jones and Jose Vicente Martinez, “Institutional Investor Expectations, Manager Performance, and Fund Flows,” Journal of Financial and Quantitative Analysis (December 2017).
                                                         3. Amit Goyal and Sunil Wahal, “The Selection and Termination of Investment Management Firms by Plan Sponsors,” Journal of Finance (August 2008).
                                                         4. Tim Jenkinson, Howard Jones, and Jose Vicente Martinez, “Picking Winners? Investment Consultants’ Recommendations of Fund Managers,” Journal of Finance (October 2016).
                                                         
                                                         

                                                         Did you miss out on the previous chapters? Check them out:

                                                         • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                         • Enrich Your Future 02: How Markets Set Prices
                                                         • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                                         • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                                         • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                                         • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                                         • Enrich Your Future 07: The Value of Security Analysis
                                                         • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                                         • Enrich Your Future 09: The Fed Model and the Money Illusion
                                                         • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                                         • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                                                         • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                                                         
                                                         

                                                         About Larry Swedroe

                                                         Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                         Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored...]]>In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 13: Between a Rock and a Hard Place.

                                                         LEARNING: Past performance is not a strong predictor of future performance.

                                                          

                                                         “If you must invest actively, find active funds that design their strategies more intelligently to take advantage of the problems and at least avoid pitfalls.”

                                                         Larry Swedroe

                                                          

                                                         In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                         Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 13: Between a Rock and a Hard Place.

                                                         Chapter 13: Between a Rock and a Hard Place

                                                         In this chapter, Larry illustrates why past performance is not a strong predictor of future performance.

                                                         Academic research has found that prominent financial advisors, investment policy committees, and pension and retirement plans engage top academic practitioners to help them identify future managers who will outperform the market. Such entities only hire managers with a track record of outperforming. They analyze their performance to see if it is statistically significant.

                                                         However, research also shows that, on average, the active managers chosen based on outstanding track records have failed to live up to expectations. The underperformance relative to passive benchmarks invariably leads decision-makers to fire the active manager. And the process begins anew.

                                                         A new round of due diligence is performed, and a new manager is selected to replace the poorly performing one. And, almost invariably, the process is repeated a few years later. So whenever pension plans interview Larry and he notices this hiring pattern, he always asks them what their hiring process is and what they’re doing differently this time since, you know, the same process failed persistently, causing regular turnover of managers. Nobody has ever answered that question.

                                                         According to Larry, many individual investors go through the same motions of picking a manager and end up with the same results—a high likelihood of poor performance.

                                                         Doing the same thing over and over expecting a different result is insanity

                                                         Larry observes that the conventional wisdom that past performance is a strong predictor of future performance is so firmly ingrained in our culture that it seems almost no one stops to ask if it is correct, even in the face of persistent failure. Larry wonders why investors aren’t asking themselves: “If the process I used to choose a manager that would deliver outperformance failed, and I use the same process the next time, why should I expect anything but failure the next time?”

                                                         The answer is painfully apparent. If you don’t do anything different, you should expect the same result. Yet, so many investors do not ask this simple question.

                                                         Larry insists that it is essential to understand that neither the purveyors of active management nor the gatekeepers want you to ask that question. If you did, they would go out of business. You, on the other hand, should ask that question. You must provide the best returns to yourself or to members of the plan for which you are a trustee, not to give the fund managers or consultants a living.

                                                         Break the cycle of repeating past mistakes

                                                         Larry urges investors to reconsider their approach. The odds of selecting active managers who will outperform on a risk-adjusted basis over the long term are so poor that it’s not prudent to try. However, it doesn’t have to be that way. Investors would benefit from George Santayana’s advice: “Those who cannot remember the past are condemned to repeat it.”

                                                         Anyone who insists on hiring active managers should look for a manager with low costs, low turnover, no style drifting, systematic strategies, and broad diversification (i.e., investing in a wide range of assets to spread risk). You are better off trading with a fund that owns hundreds of stocks because that narrows the dispersion of outcomes, which means you’re taking less risk.

                                                         Further reading

                                                         1. Herman Brodie and Klaus Harnack, “The Trust Mandate,” (Harriman House, 2018).
                                                         2. Howard Jones and Jose Vicente Martinez, “Institutional Investor Expectations, Manager Performance, and Fund Flows,” Journal of Financial and Quantitative Analysis (December 2017).
                                                         3. Amit Goyal and Sunil Wahal, “The Selection and Termination of Investment Management Firms by Plan Sponsors,” Journal of Finance (August 2008).
                                                         4. Tim Jenkinson, Howard Jones, and Jose Vicente Martinez, “Picking Winners? Investment Consultants’ Recommendations of Fund Managers,” Journal of Finance (October 2016).
                                                         
                                                         

                                                         Did you miss out on the previous chapters? Check them out:

                                                         • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                         • Enrich Your Future 02: How Markets Set Prices
                                                         • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                                         • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                                         • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                                         • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                                         • Enrich Your Future 07: The Value of Security Analysis
                                                         • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                                         • Enrich Your Future 09: The Fed Model and the Money Illusion
                                                         • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                                         • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                                                         • Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
                                                         
                                                         

                                                         About Larry Swedroe

                                                         Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                         Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                         Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                         Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                          

                                                         [spp-transcript]

                                                          

                                                         Connect with Larry Swedroe

                                                         • LinkedIn
                                                         • Twitter
                                                         • Website
                                                         • Books
                                                         
                                                         

                                                         Andrew’s books

                                                         • How to Start Building Your Wealth Investing in the Stock Market
                                                         • My Worst Investment Ever
                                                         • 9 Valuation Mistakes and How to Avoid Them
                                                         • Transform Your Business with Dr.Deming’s 14 Points
                                                         
                                                         

                                                         Andrew’s online programs

                                                         • Valuation Master Class
                                                         • The Become a Better Investor Community
                                                         • How to Start Building Your Wealth Investing in the Stock Market
                                                         • Finance Made Ridiculously Simple
                                                         • FVMR Investing: Quantamental Investing Across the World
                                                         • Become a Great Presenter and Increase Your Influence
                                                         • Transform Your Business with Dr. Deming’s 14 Points
                                                         • Achieve Your Goals
                                                         
                                                         

                                                         Connect with Andrew Stotz:

                                                         • astotz.com
                                                         • LinkedIn
                                                         • Facebook
                                                         • Instagram
                                                         • Threads
                                                         • Twitter
                                                         • YouTube
                                                         • My Worst Investment Ever Podcast
                                                         
                                                         ]]>71479313-951e-4ec0-a4b8-6fd918c3b419Tue, 10 Sep 2024 06:00:00 +070015:56falsefullEnrich Your Future 12: When Confronted With a Loser’s Game Do Not PlayIn this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 12: Outfoxing the Box.

                                                         LEARNING: You don’t have to engage in active investing; instead, accept market returns by investing passively.

                                                          

                                                         “You don’t have to play the game of active investing. You don’t have to try to overcome abysmal odds—odds that make the crap tables at Las Vegas seem appealing. Instead, you can outfox the box and accept market returns by investing passively.”

                                                         Larry Swedroe

                                                          

                                                         In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                         Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 12: Outfoxing the Box.

                                                         Chapter 12: Outfoxing the Box

                                                         In this chapter, Larry aims to guide investors toward a winning investment strategy: accepting market returns. He uses Bill Schultheis’s “Outfoxing the Box.” This is a simple game that you can choose to either play or not play. The box contains nine percentages, each representing a rate of return your financial assets are guaranteed to earn for the rest of your life.

                                                         
                                                         

                                                         As an investor, you have the following choice: Accept the 10 percent rate of return in the center box or be asked to leave the room. The boxes will be shuffled around, and you will have to choose a box, not knowing what return each box holds. You quickly calculate that the average return of the other eight boxes is 10 percent.

                                                         Thus, if thousands of people played the game and each chose a box, the expected average return would be the same as if they all decided not to play. Of course, some would earn a return of negative 3 percent per annum, while others would earn 23 percent. This is like the world of investing: if you choose an actively managed fund and the market returns 10 percent, you might be lucky and earn as much as 23 percent per annum, or you might be unlucky and lose 3 percent per annum. A rational risk-averse investor should logically decide to “outfox the box” and accept the average (market) return of 10 percent.

                                                         In all the years Larry has been an investment advisor, whenever he presents this game to an investor, not once has an investor chosen to play. Everyone decides to accept par or 10 percent. While they might be willing to spend a dollar on a lottery ticket, they become more prudent in their choice when it comes to investing their life’s savings.

                                                         Active investing is a loser’s game

                                                         Active investing is a game with low odds of success that many would consider a losing battle. It’s a game that, when compared to the ‘outfoxing the box’ game, seems like a futile endeavor. Larry’s advice is to avoid this game altogether.

                                                         In the “outfoxing the box” game, the average return of all choices was the same 10 percent as the 10 percent that would have been earned by choosing not to play. And 50 percent of those choosing to play would be expected to earn an above-average return and 50 percent a below-average return.

                                                         In his book The Incredible Shrinking Alpha, Larry shows that the odds are far worse than 50 percent. Today, only about 2 percent of actively managed funds generate statistically significant alphas on a pretax basis. If you would choose not to play a game when you have a 50 percent chance of success, what logic is there in choosing to play a game where the most sophisticated investors have a much higher failure rate? Yet, that is precisely the choice those playing the game of active management are making.

                                                         Larry adds that research has shown that even the big institutional investors, with all their resources, fail to outperform appropriate risk-adjusted benchmarks such as the S&P 500. In addition to their other advantages, institutional investors have one other significant advantage over individual investors—their returns are not taxable. However, if your equity investments are in a taxable account, the returns you earn are subject to taxes. The incremental tax cost of active funds further reduces your odds of success.

                                                         You don’t have to play the game of active investing

                                                         Larry’s advice to investors is to avoid trying to overcome abysmal odds—odds that make the crap tables at Las Vegas seem appealing. Instead, he suggests outfoxing the box and accepting market returns by investing passively. Larry quotes Charles Ellis, author of Investment Policy: How to Win the Loser’s Game:

                                                         “In investment management, the real opportunity to achieve superior results is not in scrambling to outperform the market, but in establishing and adhering to appropriate investment policies over the long term—policies that position the portfolio to benefit from riding with the main long-term forces in the market.”

                                                         Further reading

                                                         1. Robert D. Arnott, Andrew L. Berkin, and Jia Ye, “How Well Have Taxable Investors Been Served in the 1980s and 1990s?” Journal of Portfolio Management (Summer 2000).
                                                         2. Charles Ellis, Investment Policy: How to Win the Loser’s Game (Irwin, 1993) p. 24.
                                                         
                                                         

                                                         Did you miss out on the previous chapters? Check them out:

                                                         • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                         • Enrich Your Future 02: How Markets Set Prices
                                                         • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                                         • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                                         • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                                         • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                                         • Enrich Your Future 07: The Value of Security Analysis
                                                         • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                                         • Enrich Your Future 09: The Fed Model and the Money Illusion
                                                         • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                                         • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                                                         
                                                         

                                                         About Larry Swedroe

                                                         Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                         Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever...]]>In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 12: Outfoxing the Box.

                                                         LEARNING: You don’t have to engage in active investing; instead, accept market returns by investing passively.

                                                          

                                                         “You don’t have to play the game of active investing. You don’t have to try to overcome abysmal odds—odds that make the crap tables at Las Vegas seem appealing. Instead, you can outfox the box and accept market returns by investing passively.”

                                                         Larry Swedroe

                                                          

                                                         In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                         Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 12: Outfoxing the Box.

                                                         Chapter 12: Outfoxing the Box

                                                         In this chapter, Larry aims to guide investors toward a winning investment strategy: accepting market returns. He uses Bill Schultheis’s “Outfoxing the Box.” This is a simple game that you can choose to either play or not play. The box contains nine percentages, each representing a rate of return your financial assets are guaranteed to earn for the rest of your life.

                                                         
                                                         

                                                         As an investor, you have the following choice: Accept the 10 percent rate of return in the center box or be asked to leave the room. The boxes will be shuffled around, and you will have to choose a box, not knowing what return each box holds. You quickly calculate that the average return of the other eight boxes is 10 percent.

                                                         Thus, if thousands of people played the game and each chose a box, the expected average return would be the same as if they all decided not to play. Of course, some would earn a return of negative 3 percent per annum, while others would earn 23 percent. This is like the world of investing: if you choose an actively managed fund and the market returns 10 percent, you might be lucky and earn as much as 23 percent per annum, or you might be unlucky and lose 3 percent per annum. A rational risk-averse investor should logically decide to “outfox the box” and accept the average (market) return of 10 percent.

                                                         In all the years Larry has been an investment advisor, whenever he presents this game to an investor, not once has an investor chosen to play. Everyone decides to accept par or 10 percent. While they might be willing to spend a dollar on a lottery ticket, they become more prudent in their choice when it comes to investing their life’s savings.

                                                         Active investing is a loser’s game

                                                         Active investing is a game with low odds of success that many would consider a losing battle. It’s a game that, when compared to the ‘outfoxing the box’ game, seems like a futile endeavor. Larry’s advice is to avoid this game altogether.

                                                         In the “outfoxing the box” game, the average return of all choices was the same 10 percent as the 10 percent that would have been earned by choosing not to play. And 50 percent of those choosing to play would be expected to earn an above-average return and 50 percent a below-average return.

                                                         In his book The Incredible Shrinking Alpha, Larry shows that the odds are far worse than 50 percent. Today, only about 2 percent of actively managed funds generate statistically significant alphas on a pretax basis. If you would choose not to play a game when you have a 50 percent chance of success, what logic is there in choosing to play a game where the most sophisticated investors have a much higher failure rate? Yet, that is precisely the choice those playing the game of active management are making.

                                                         Larry adds that research has shown that even the big institutional investors, with all their resources, fail to outperform appropriate risk-adjusted benchmarks such as the S&P 500. In addition to their other advantages, institutional investors have one other significant advantage over individual investors—their returns are not taxable. However, if your equity investments are in a taxable account, the returns you earn are subject to taxes. The incremental tax cost of active funds further reduces your odds of success.

                                                         You don’t have to play the game of active investing

                                                         Larry’s advice to investors is to avoid trying to overcome abysmal odds—odds that make the crap tables at Las Vegas seem appealing. Instead, he suggests outfoxing the box and accepting market returns by investing passively. Larry quotes Charles Ellis, author of Investment Policy: How to Win the Loser’s Game:

                                                         “In investment management, the real opportunity to achieve superior results is not in scrambling to outperform the market, but in establishing and adhering to appropriate investment policies over the long term—policies that position the portfolio to benefit from riding with the main long-term forces in the market.”

                                                         Further reading

                                                         1. Robert D. Arnott, Andrew L. Berkin, and Jia Ye, “How Well Have Taxable Investors Been Served in the 1980s and 1990s?” Journal of Portfolio Management (Summer 2000).
                                                         2. Charles Ellis, Investment Policy: How to Win the Loser’s Game (Irwin, 1993) p. 24.
                                                         
                                                         

                                                         Did you miss out on the previous chapters? Check them out:

                                                         • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                         • Enrich Your Future 02: How Markets Set Prices
                                                         • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                                         • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                                         • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                                         • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                                         • Enrich Your Future 07: The Value of Security Analysis
                                                         • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                                         • Enrich Your Future 09: The Fed Model and the Money Illusion
                                                         • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                                         • Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
                                                         
                                                         

                                                         About Larry Swedroe

                                                         Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                         Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                         Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                         Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                          

                                                         [spp-transcript]

                                                          

                                                         Connect with Larry Swedroe

                                                         • LinkedIn
                                                         • Twitter
                                                         • Website
                                                         • Books
                                                         
                                                         

                                                         Andrew’s books

                                                         • How to Start Building Your Wealth Investing in the Stock Market
                                                         • My Worst Investment Ever
                                                         • 9 Valuation Mistakes and How to Avoid Them
                                                         • Transform Your Business with Dr.Deming’s 14 Points
                                                         
                                                         

                                                         Andrew’s online programs

                                                         • Valuation Master Class
                                                         • The Become a Better Investor Community
                                                         • How to Start Building Your Wealth Investing in the Stock Market
                                                         • Finance Made Ridiculously Simple
                                                         • FVMR Investing: Quantamental Investing Across the World
                                                         • Become a Great Presenter and Increase Your Influence
                                                         • Transform Your Business with Dr. Deming’s 14 Points
                                                         • Achieve Your Goals
                                                         
                                                         

                                                         Connect with Andrew Stotz:

                                                         • astotz.com
                                                         • LinkedIn
                                                         • Facebook
                                                         • Instagram
                                                         • Threads
                                                         • Twitter
                                                         • YouTube
                                                         • My Worst Investment Ever Podcast
                                                         
                                                         

                                                         
                                                         

                                                         ]]>42328549-b9cd-4c9b-95b8-06e07a005d54Tue, 03 Sep 2024 06:00:00 +070015:04falsefullEnrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of SkillIn this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 11: The Demon of Chance.

                                                         LEARNING: Don’t always attribute skill to success, sometimes it could be just luck.

                                                          

                                                         “Just because there is a correlation doesn’t mean causation. You must be careful not to attribute skill and not luck to success.”

                                                         Larry Swedroe

                                                          

                                                         In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                         Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 11: The Demon of Chance.

                                                         Chapter 11: The Demon of Chance

                                                         In this chapter, Larry discusses why investors confuse skill with what he calls “the demon of luck,” a term he uses to describe the random and unpredictable nature of market outcomes.

                                                         Larry cautions that before concluding that because an investment strategy worked in the past, it will work in the future, investors should be aware of the uncertainty and ask if there is a rational explanation for the correlation between the outcome and strategy.

                                                         According to Larry, the assumption is that while short-term outperformance might be a matter of luck, long-term outperformance must be evidence of skill. However, a basic knowledge of statistics is crucial in understanding that with thousands of money managers playing the game, the odds are that a few, not just one, will produce a long-term performance record.

                                                         Today, there are more mutual funds than there are stocks. With so many active managers trying to win, statistical theory shows that it’s expected that some will likely outperform the market. However, beating the market is a zero-sum game before expenses since someone must own all stocks. And, if some group of active managers outperforms the market, there must be another group that underperforms. Therefore, the odds of any specific active manager being successful are, at best, 50/50 (before considering the burden of higher expenses active managers must overcome to outperform a benchmark index fund).

                                                         Skill or “the demon of luck?

                                                         From probability, it’s expected that randomly, half the active managers would outperform in any one year, about one in four to outperform two years in a row, and one in eight to do so three years in a row. Fund managers who outperform for even three years in a row are often declared to be gurus by the financial media. But are they gurus, or is it just luck? According to Larry, it is hard to tell the difference between the two. Without this knowledge of statistics investors are likely to confuse skill with “the demon of luck.”

                                                         Bill Miller, the Legg Mason Value Trust manager, was acclaimed as the next Peter Lynch. He managed to do what no current manager has done—beat the S&P 500 Index 15 years in a row (1991–2005). Indeed, that could be luck. You can’t rely on that performance as a predictor of future greatness. Larry turns to academic research to test if this conclusion is correct.

                                                         In one example, the Lindner Large-Cap Fund outperformed the S&P 500 Index for 11 years (1974 through 1984). Over the next 18 years, the S&P 500 Index returned 12.6 percent. Believers in past performance as a prologue to future performance were not rewarded for their faith in the Lindner Large-Cap Fund with returns of just 4.1 percent, an underperformance of over 8 percent per annum for 18 years. After outperforming for 11 years in a row, the Lindner Large-Cap Fund beat the S&P 500 in just four of the next 18 years and none of the last nine—quite a price to pay for believing that past performance is a predictor of future performance.

                                                         In another example, David Baker’s 44 Wall Street was the top-performing diversified U.S. stock fund over the entire decade of the 1970s—even outperforming the legendary Peter Lynch, who ran Fidelity’s Magellan Fund. Faced with deciding which fund to invest in, why would anyone settle for Peter Lynch when they could have David Baker? Unfortunately, 44 Wall Street ranked as the worst-performing fund of the 1980s, losing 73 percent. During the same period, the S&P 500 grew 17.6 percent per annum. Each dollar invested in Baker’s fund fell to just $0.27. On the other hand, each dollar invested in the S&P 500 Index grew to over $5.

                                                         Belief in past performance as a predictor of future performance can be expensive

                                                         As evidenced by the Linder Large-Cap Fund and the 44 Wall Street Fund examples, belief in the “hot hand” and past performance as a predictor of the future performance of actively managed funds and their managers can be pretty expensive. Larry points out that, unfortunately, the financial media and the public quickly assume that superior performance results from skill rather than the more likely assumption that it was a random outcome. The reason is that noise sells, and the financial media is in the business of selling. They are not in the business of providing prudent investment advice.

                                                         Larry concludes that while there will likely be future Peter Lynchs and Bill Millers, investors cannot identify them ahead of time. Also, unfortunately, investors can only buy future performance, not past performance. A perfect example of this apparent truism is that in 2006, Miller’s streak was broken as the Legg Mason Value Trust underperformed the S&P 500 Index by almost 10 percent. The fund’s performance was so poor that its cumulative three-year returns trailed the S&P 500 Index by 2.8 percent annually. This further proves that it is tough to tell whether past performance resulted from skill or the “demon of luck.”

                                                         Remember that relying on past performance as a guide to the future might lead you to invest with the next Peter Lynch, just as it might lead you to invest with the next David Baker. That is a risk that a prudent, risk-averse investor (probably you) should not be willing to accept.

                                                         Further reading

                                                         1. Karen Damato and Allison Bisbey Colter, “Hedge Funds, Once Utterly Exclusive, Lure Less-Elite Investors,” Wall Street Journal, January 3, 2002.
                                                         2. Jonathan Clements, 25 Myths You’ve Got to Avoid (Simon & Schuster, 1998).
                                                         
                                                         

                                                         Did you miss out on the previous chapters? Check them out:

                                                         • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                         • Enrich Your Future 02: How Markets Set Prices
                                                         • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                                         • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                                         • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                                         • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                                         • Enrich Your Future 07: The Value of Security Analysis
                                                         • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                                         • Enrich Your Future 09: The Fed Model and the Money Illusion
                                                         • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                                         
                                                         

                                                         About Larry Swedroe

                                                         Larry Swedroe was head...]]>In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 11: The Demon of Chance.

                                                         LEARNING: Don’t always attribute skill to success, sometimes it could be just luck.

                                                          

                                                         “Just because there is a correlation doesn’t mean causation. You must be careful not to attribute skill and not luck to success.”

                                                         Larry Swedroe

                                                          

                                                         In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                         Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 11: The Demon of Chance.

                                                         Chapter 11: The Demon of Chance

                                                         In this chapter, Larry discusses why investors confuse skill with what he calls “the demon of luck,” a term he uses to describe the random and unpredictable nature of market outcomes.

                                                         Larry cautions that before concluding that because an investment strategy worked in the past, it will work in the future, investors should be aware of the uncertainty and ask if there is a rational explanation for the correlation between the outcome and strategy.

                                                         According to Larry, the assumption is that while short-term outperformance might be a matter of luck, long-term outperformance must be evidence of skill. However, a basic knowledge of statistics is crucial in understanding that with thousands of money managers playing the game, the odds are that a few, not just one, will produce a long-term performance record.

                                                         Today, there are more mutual funds than there are stocks. With so many active managers trying to win, statistical theory shows that it’s expected that some will likely outperform the market. However, beating the market is a zero-sum game before expenses since someone must own all stocks. And, if some group of active managers outperforms the market, there must be another group that underperforms. Therefore, the odds of any specific active manager being successful are, at best, 50/50 (before considering the burden of higher expenses active managers must overcome to outperform a benchmark index fund).

                                                         Skill or “the demon of luck?

                                                         From probability, it’s expected that randomly, half the active managers would outperform in any one year, about one in four to outperform two years in a row, and one in eight to do so three years in a row. Fund managers who outperform for even three years in a row are often declared to be gurus by the financial media. But are they gurus, or is it just luck? According to Larry, it is hard to tell the difference between the two. Without this knowledge of statistics investors are likely to confuse skill with “the demon of luck.”

                                                         Bill Miller, the Legg Mason Value Trust manager, was acclaimed as the next Peter Lynch. He managed to do what no current manager has done—beat the S&P 500 Index 15 years in a row (1991–2005). Indeed, that could be luck. You can’t rely on that performance as a predictor of future greatness. Larry turns to academic research to test if this conclusion is correct.

                                                         In one example, the Lindner Large-Cap Fund outperformed the S&P 500 Index for 11 years (1974 through 1984). Over the next 18 years, the S&P 500 Index returned 12.6 percent. Believers in past performance as a prologue to future performance were not rewarded for their faith in the Lindner Large-Cap Fund with returns of just 4.1 percent, an underperformance of over 8 percent per annum for 18 years. After outperforming for 11 years in a row, the Lindner Large-Cap Fund beat the S&P 500 in just four of the next 18 years and none of the last nine—quite a price to pay for believing that past performance is a predictor of future performance.

                                                         In another example, David Baker’s 44 Wall Street was the top-performing diversified U.S. stock fund over the entire decade of the 1970s—even outperforming the legendary Peter Lynch, who ran Fidelity’s Magellan Fund. Faced with deciding which fund to invest in, why would anyone settle for Peter Lynch when they could have David Baker? Unfortunately, 44 Wall Street ranked as the worst-performing fund of the 1980s, losing 73 percent. During the same period, the S&P 500 grew 17.6 percent per annum. Each dollar invested in Baker’s fund fell to just $0.27. On the other hand, each dollar invested in the S&P 500 Index grew to over $5.

                                                         Belief in past performance as a predictor of future performance can be expensive

                                                         As evidenced by the Linder Large-Cap Fund and the 44 Wall Street Fund examples, belief in the “hot hand” and past performance as a predictor of the future performance of actively managed funds and their managers can be pretty expensive. Larry points out that, unfortunately, the financial media and the public quickly assume that superior performance results from skill rather than the more likely assumption that it was a random outcome. The reason is that noise sells, and the financial media is in the business of selling. They are not in the business of providing prudent investment advice.

                                                         Larry concludes that while there will likely be future Peter Lynchs and Bill Millers, investors cannot identify them ahead of time. Also, unfortunately, investors can only buy future performance, not past performance. A perfect example of this apparent truism is that in 2006, Miller’s streak was broken as the Legg Mason Value Trust underperformed the S&P 500 Index by almost 10 percent. The fund’s performance was so poor that its cumulative three-year returns trailed the S&P 500 Index by 2.8 percent annually. This further proves that it is tough to tell whether past performance resulted from skill or the “demon of luck.”

                                                         Remember that relying on past performance as a guide to the future might lead you to invest with the next Peter Lynch, just as it might lead you to invest with the next David Baker. That is a risk that a prudent, risk-averse investor (probably you) should not be willing to accept.

                                                         Further reading

                                                         1. Karen Damato and Allison Bisbey Colter, “Hedge Funds, Once Utterly Exclusive, Lure Less-Elite Investors,” Wall Street Journal, January 3, 2002.
                                                         2. Jonathan Clements, 25 Myths You’ve Got to Avoid (Simon & Schuster, 1998).
                                                         
                                                         

                                                         Did you miss out on the previous chapters? Check them out:

                                                         • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                         • Enrich Your Future 02: How Markets Set Prices
                                                         • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                                         • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                                         • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                                         • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                                         • Enrich Your Future 07: The Value of Security Analysis
                                                         • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                                         • Enrich Your Future 09: The Fed Model and the Money Illusion
                                                         • Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
                                                         
                                                         

                                                         About Larry Swedroe

                                                         Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                         Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                         Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                         Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                          

                                                         [spp-transcript]

                                                          

                                                         Connect with Larry Swedroe

                                                         • LinkedIn
                                                         • Twitter
                                                         • Website
                                                         • Books
                                                         
                                                         

                                                         Andrew’s books

                                                         • How to Start Building Your Wealth Investing in the Stock Market
                                                         • My Worst Investment Ever
                                                         • 9 Valuation Mistakes and How to Avoid Them
                                                         • Transform Your Business with Dr.Deming’s 14 Points
                                                         
                                                         

                                                         Andrew’s online programs

                                                         • Valuation Master Class
                                                         • The Become a Better Investor Community
                                                         • How to Start Building Your Wealth Investing in the Stock Market
                                                         • Finance Made Ridiculously Simple
                                                         • FVMR Investing: Quantamental Investing Across the World
                                                         • Become a Great Presenter and Increase Your Influence
                                                         • Transform Your Business with Dr. Deming’s 14 Points
                                                         • Achieve Your Goals
                                                         
                                                         

                                                         Connect with Andrew Stotz:

                                                         • astotz.com
                                                         • LinkedIn
                                                         • Facebook
                                                         • Instagram
                                                         • Threads
                                                         • Twitter
                                                         • YouTube
                                                         • My Worst Investment Ever Podcast
                                                         
                                                         ]]>576d125d-582e-4fcc-aaa2-5d5e4e1ea6cdTue, 27 Aug 2024 06:00:00 +070028:27falsefullEnrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’tIn this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 10: When Even the Best Aren’t Likely to Win the Game.

                                                         LEARNING: Refrain from the futile pursuit of trying to beat the market.

                                                          

                                                         “Only play the game of active management if you can truly identify an advantage you have, like inside information, but you have to be careful because it’s illegal to trade on it. Also, play only if you place a very high value on the entertainment.”

                                                         Larry Swedroe

                                                          

                                                         In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                         Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 10: When Even the Best Aren’t Likely to Win the Game.

                                                         Chapter 10: When Even the Best Aren’t Likely to Win the Game

                                                         In this chapter, Larry illustrates why individual investors should refrain from the futile pursuit of trying to beat the market.

                                                         It seems logical to believe that if anyone could beat the market, it would be the pension plans of the largest U.S. companies. Larry lists a few reasons this is a reasonable assumption:

                                                         1. These pension plans control large sums of money. They have access to the best and brightest portfolio managers, each clamoring to manage the billions of dollars in these plans (and earn hefty fees). Pension plans can also invest with managers that most individuals don’t have access to because they don’t have sufficient assets to meet the minimums of these superstar managers.
                                                         2. Pension plans always hire managers with a track record of outperforming their benchmarks or, at the very least, matching them. Not the ones with a record of underperformance.
                                                         3. Additionally, pension plans will always choose the manager who makes an excellent presentation, explaining why they succeeded and would continue to succeed.
                                                         4. Many, if not the majority, of these pension plans hire professional consultants such as Frank Russell, SEI, and Goldman Sachs to help them perform due diligence in interviewing, screening, and ultimately selecting the very best of the best. These consultants have considered every conceivable screen to find the best fund managers, such as performance records, management tenure, depth of staff, consistency of performance (to make sure that a long-term record is not the result of one or two lucky years), performance in bear markets, consistency of implementation of strategy, turnover, costs, etc. It is unlikely that there is something that you or your financial advisor would think of that they had not already considered.
                                                         5. As individuals, we rarely have the luxury of personally interviewing money managers and performing as thorough a due diligence as these consultants. We generally do not have professionals helping us avoid mistakes in the process.
                                                         6. The fees they pay for active management are typically lower than the fees individual investors pay.
                                                         
                                                         

                                                         So, how good are these pension funds at beating the market?

                                                         So, how have the pension plans done in their quest to find the few managers that will persistently beat their benchmark? The evidence is compelling that they should have “taken par.” For example, Richard Ennis’s 2020 study found that public pension plans underperformed their benchmark return by 0.99%, and the endowments underperformed by 1.59%. He also found that of the 46 public pension plans he studied, just one generated statistically significant alpha, compared to the 17 that generated statistically significant negative alphas.

                                                         According to the study, the likelihood of underperforming over a decade is 98%.

                                                         Another researcher, Charles Ellis, declared that active investing is a loser’s game that is possible to win, but the odds of doing so are so poor that it isn’t prudent to try. In Larry’s opinion, it would be imprudent for you to try to succeed if institutional investors, with far greater resources than you (or your broker or financial advisor), fail with great persistence. This should make you feel cautious and less likely to take unnecessary risks.

                                                         Wall Street needs you to play the game of active investing

                                                         According to Larry, Wall Street needs and wants you to play the game of active investing. They need you to try to beat par. They know that your odds of success are so low that it is not in your interest to play. But they need you to play so that they (not you) make the most money. They make it by charging high fees for active management that persistently delivers poor performance.

                                                         Larry insists that the only logical reason to play the game of active investing is that you place a high entertainment value on the effort. For some people, there might be another reason—they enjoy the bragging rights if they win. Of course, you rarely, if ever, hear when they lose. Investing, however, was never meant to be exciting. Wall Street and the media created that myth. Instead, it is intended to provide you with the greatest odds of achieving your financial and life goals with the least risk. That is what differentiates investing from speculating (gambling).

                                                         Further reading

                                                         1. Richard Ennis, Institutional Investment Strategy and Manager Choice: A Critique,” Journal of Portfolio Management (Fund Manager Selection, 2020, 46 (5).
                                                         
                                                         

                                                         Did you miss out on the previous chapters? Check them out:

                                                         • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                         • Enrich Your Future 02: How Markets Set Prices
                                                         • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                                         • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                                         • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                                         • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                                         • Enrich Your Future 07: The Value of Security Analysis
                                                         • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                                         • Enrich Your Future 09: The Fed Model and the Money Illusion
                                                         
                                                         

                                                         About Larry Swedroe

                                                         Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                         Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                         Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                         Larry is a prolific writer, regularly contributing to multiple outlets, including In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 10: When Even the Best Aren’t Likely to Win the Game.

                                                         LEARNING: Refrain from the futile pursuit of trying to beat the market.

                                                          

                                                         “Only play the game of active management if you can truly identify an advantage you have, like inside information, but you have to be careful because it’s illegal to trade on it. Also, play only if you place a very high value on the entertainment.”

                                                         Larry Swedroe

                                                          

                                                         In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                         Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 10: When Even the Best Aren’t Likely to Win the Game.

                                                         Chapter 10: When Even the Best Aren’t Likely to Win the Game

                                                         In this chapter, Larry illustrates why individual investors should refrain from the futile pursuit of trying to beat the market.

                                                         It seems logical to believe that if anyone could beat the market, it would be the pension plans of the largest U.S. companies. Larry lists a few reasons this is a reasonable assumption:

                                                         1. These pension plans control large sums of money. They have access to the best and brightest portfolio managers, each clamoring to manage the billions of dollars in these plans (and earn hefty fees). Pension plans can also invest with managers that most individuals don’t have access to because they don’t have sufficient assets to meet the minimums of these superstar managers.
                                                         2. Pension plans always hire managers with a track record of outperforming their benchmarks or, at the very least, matching them. Not the ones with a record of underperformance.
                                                         3. Additionally, pension plans will always choose the manager who makes an excellent presentation, explaining why they succeeded and would continue to succeed.
                                                         4. Many, if not the majority, of these pension plans hire professional consultants such as Frank Russell, SEI, and Goldman Sachs to help them perform due diligence in interviewing, screening, and ultimately selecting the very best of the best. These consultants have considered every conceivable screen to find the best fund managers, such as performance records, management tenure, depth of staff, consistency of performance (to make sure that a long-term record is not the result of one or two lucky years), performance in bear markets, consistency of implementation of strategy, turnover, costs, etc. It is unlikely that there is something that you or your financial advisor would think of that they had not already considered.
                                                         5. As individuals, we rarely have the luxury of personally interviewing money managers and performing as thorough a due diligence as these consultants. We generally do not have professionals helping us avoid mistakes in the process.
                                                         6. The fees they pay for active management are typically lower than the fees individual investors pay.
                                                         
                                                         

                                                         So, how good are these pension funds at beating the market?

                                                         So, how have the pension plans done in their quest to find the few managers that will persistently beat their benchmark? The evidence is compelling that they should have “taken par.” For example, Richard Ennis’s 2020 study found that public pension plans underperformed their benchmark return by 0.99%, and the endowments underperformed by 1.59%. He also found that of the 46 public pension plans he studied, just one generated statistically significant alpha, compared to the 17 that generated statistically significant negative alphas.

                                                         According to the study, the likelihood of underperforming over a decade is 98%.

                                                         Another researcher, Charles Ellis, declared that active investing is a loser’s game that is possible to win, but the odds of doing so are so poor that it isn’t prudent to try. In Larry’s opinion, it would be imprudent for you to try to succeed if institutional investors, with far greater resources than you (or your broker or financial advisor), fail with great persistence. This should make you feel cautious and less likely to take unnecessary risks.

                                                         Wall Street needs you to play the game of active investing

                                                         According to Larry, Wall Street needs and wants you to play the game of active investing. They need you to try to beat par. They know that your odds of success are so low that it is not in your interest to play. But they need you to play so that they (not you) make the most money. They make it by charging high fees for active management that persistently delivers poor performance.

                                                         Larry insists that the only logical reason to play the game of active investing is that you place a high entertainment value on the effort. For some people, there might be another reason—they enjoy the bragging rights if they win. Of course, you rarely, if ever, hear when they lose. Investing, however, was never meant to be exciting. Wall Street and the media created that myth. Instead, it is intended to provide you with the greatest odds of achieving your financial and life goals with the least risk. That is what differentiates investing from speculating (gambling).

                                                         Further reading

                                                         1. Richard Ennis, Institutional Investment Strategy and Manager Choice: A Critique,” Journal of Portfolio Management (Fund Manager Selection, 2020, 46 (5).
                                                         
                                                         

                                                         Did you miss out on the previous chapters? Check them out:

                                                         • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                         • Enrich Your Future 02: How Markets Set Prices
                                                         • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                                         • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                                         • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                                         • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                                         • Enrich Your Future 07: The Value of Security Analysis
                                                         • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                                         • Enrich Your Future 09: The Fed Model and the Money Illusion
                                                         
                                                         

                                                         About Larry Swedroe

                                                         Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                         Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                         Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                         Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                          

                                                         [spp-transcript]

                                                          

                                                         Connect with Larry Swedroe

                                                         • LinkedIn
                                                         • Twitter
                                                         • Website
                                                         • Books
                                                         
                                                         

                                                         Andrew’s books

                                                         • How to Start Building Your Wealth Investing in the Stock Market
                                                         • My Worst Investment Ever
                                                         • 9 Valuation Mistakes and How to Avoid Them
                                                         • Transform Your Business with Dr.Deming’s 14 Points
                                                         
                                                         

                                                         Andrew’s online programs

                                                         • Valuation Master Class
                                                         • The Become a Better Investor Community
                                                         • How to Start Building Your Wealth Investing in the Stock Market
                                                         • Finance Made Ridiculously Simple
                                                         • FVMR Investing: Quantamental Investing Across the World
                                                         • Become a Great Presenter and Increase Your Influence
                                                         • Transform Your Business with Dr. Deming’s 14 Points
                                                         • Achieve Your Goals
                                                         
                                                         

                                                         Connect with Andrew Stotz:

                                                         • astotz.com
                                                         • LinkedIn
                                                         • Facebook
                                                         • Instagram
                                                         • Threads
                                                         • Twitter
                                                         • YouTube
                                                         • My Worst Investment Ever Podcast
                                                         
                                                         ]]>413b3f73-0451-4071-b900-5d9f26f72508Tue, 20 Aug 2024 06:00:00 +070027:18falsefullAndrew Pek - Immersive Learning Experience with VR TechnologyBIO: Andrew Pek is a co-founder of Amiko XR Inc., a groundbreaking company that leverages VR and AI technologies to create immersive, personalized learning experiences available 24/7.

                                                         STORY: Andrew shared his worst investment ever story on episode 376: Build Revenue in Your Startup Before You Build Up Cost. Today, he discusses his new business.

                                                         LEARNING: Learning can be more immersive, sparking curiosity and excitement.

                                                          

                                                         “Thank you so much, Andrew, for having me on your podcast. It’s great to see you. I am excited about the future.”

                                                         Andrew Pek

                                                          

                                                         Guest profile

                                                         Andrew Pek is a co-founder of Amiko XR Inc., a groundbreaking company that leverages VR and AI technologies to create immersive, personalized learning experiences available 24/7. He is a recognized C-Suite advisor on innovation and human transformation. Andrew’s insights on leadership and design thinking have been featured in prominent media outlets such as ABC, NBC, Forbes, and Entrepreneur.

                                                         Andrew shared his worst investment ever story on episode 376: Build Revenue in Your Startup Before You Build Up Cost. Today, he discusses his new business.

                                                         Worst investment ever

                                                         Much of Andrew’s work has involved teaching leadership, innovation, product design, and business development skills. He’s always seeking new ways that technology can engage people to absorb learning and become more engaged—not just a boring, traditional training program, but something that would really involve learners in a more immersive way, sparking their curiosity and excitement.

                                                         Andrew and his team successfully prototyped a solution in which learners get an immersive learning experience through a headset and talk to a coach avatar who can teach just about anything.

                                                         So, if you’re interested in finance, investing, sales, leadership, career preparation, and just about any topic matter, you’ll find it on the app. This includes job-related skills, general management and leadership courses, and personal development topics.

                                                         You can obtain information at your fingertips through generative AI and large language models. What sets the application apart is the combination of artificial intelligence and a VR experience. Through simulations, role plays, or evaluation, learners can master any particular topic or get support in any particular challenge. Unlike mobile device applications, VR experiences significantly reduce distractions, leading to more focused and practical engagement.

                                                         The solution is also unique because it is curated and configured to the expert level. You teach the avatar, and the avatar then teaches others. It ingests your content to become a master in your subject and attain the same level of intelligence as you.

                                                         Learners who use the solution talk to someone as if they’re talking to you in an interactive, dynamic environment. If something is unclear or learners want to probe further or even get additional guidance or resources, the solution will facilitate that. Learners get videos and information transcripts and don’t have to take notes.

                                                         Andrew’s solution is a smart choice for mid-to-large-sized corporations or even smaller corporations that can’t afford expensive training or trainers. It’s a cost-effective solution for those looking to provide any training, such as onboarding new employees. Employees can use the application on an ongoing basis to access courses specific to their job or general management leadership courses, just like they’d access a course library, but at the convenience of their homes.

                                                         Most people nowadays are spending time at home or in the office. With this solution, they don’t have to worry about entering the physical space for an immersive learning experience. Unlike gaming, they can do that sitting on their couch without moving around, so you don’t have to worry about getting dizzy when using VR. It’s a much more stationary experience.

                                                         If you’re interested in understanding how Andrew’s solution can help your organization, check out amikoxr.com or contact Andrew at Andrewp@amikoxr.com.

                                                          

                                                         [spp-transcript]

                                                          

                                                         Connect with Andrew Pek

                                                         • LinkedIn
                                                         • Twitter
                                                         • Website
                                                         
                                                         

                                                         Andrew’s books

                                                         • How to Start Building Your Wealth Investing in the Stock Market
                                                         • My Worst Investment Ever
                                                         • 9 Valuation Mistakes and How to Avoid Them
                                                         • Transform Your Business with Dr.Deming’s 14 Points
                                                         
                                                         

                                                         Andrew’s online programs

                                                         • Valuation Master Class
                                                         • The Become a Better Investor Community
                                                         • How to Start Building Your Wealth Investing in the Stock Market
                                                         • Finance Made Ridiculously Simple
                                                         • FVMR Investing: Quantamental Investing Across the World
                                                         • Become a Great Presenter and Increase Your Influence
                                                         • Transform Your Business with Dr. Deming’s 14 Points
                                                         • Achieve Your Goals
                                                         
                                                         

                                                         Connect with Andrew Stotz:

                                                         • astotz.com
                                                         • LinkedIn
                                                         • Facebook
                                                         • Instagram
                                                         • Threads
                                                         • Twitter
                                                         • YouTube
                                                         • My Worst Investment Ever Podcast
                                                         
                                                         ]]>BIO: Andrew Pek is a co-founder of Amiko XR Inc., a groundbreaking company that leverages VR and AI technologies to create immersive, personalized learning experiences available 24/7.

                                                         STORY: Andrew shared his worst investment ever story on episode 376: Build Revenue in Your Startup Before You Build Up Cost. Today, he discusses his new business.

                                                         LEARNING: Learning can be more immersive, sparking curiosity and excitement.

                                                          

                                                         “Thank you so much, Andrew, for having me on your podcast. It’s great to see you. I am excited about the future.”

                                                         Andrew Pek

                                                          

                                                         Guest profile

                                                         Andrew Pek is a co-founder of Amiko XR Inc., a groundbreaking company that leverages VR and AI technologies to create immersive, personalized learning experiences available 24/7. He is a recognized C-Suite advisor on innovation and human transformation. Andrew’s insights on leadership and design thinking have been featured in prominent media outlets such as ABC, NBC, Forbes, and Entrepreneur.

                                                         Andrew shared his worst investment ever story on episode 376: Build Revenue in Your Startup Before You Build Up Cost. Today, he discusses his new business.

                                                         Worst investment ever

                                                         Much of Andrew’s work has involved teaching leadership, innovation, product design, and business development skills. He’s always seeking new ways that technology can engage people to absorb learning and become more engaged—not just a boring, traditional training program, but something that would really involve learners in a more immersive way, sparking their curiosity and excitement.

                                                         Andrew and his team successfully prototyped a solution in which learners get an immersive learning experience through a headset and talk to a coach avatar who can teach just about anything.

                                                         So, if you’re interested in finance, investing, sales, leadership, career preparation, and just about any topic matter, you’ll find it on the app. This includes job-related skills, general management and leadership courses, and personal development topics.

                                                         You can obtain information at your fingertips through generative AI and large language models. What sets the application apart is the combination of artificial intelligence and a VR experience. Through simulations, role plays, or evaluation, learners can master any particular topic or get support in any particular challenge. Unlike mobile device applications, VR experiences significantly reduce distractions, leading to more focused and practical engagement.

                                                         The solution is also unique because it is curated and configured to the expert level. You teach the avatar, and the avatar then teaches others. It ingests your content to become a master in your subject and attain the same level of intelligence as you.

                                                         Learners who use the solution talk to someone as if they’re talking to you in an interactive, dynamic environment. If something is unclear or learners want to probe further or even get additional guidance or resources, the solution will facilitate that. Learners get videos and information transcripts and don’t have to take notes.

                                                         Andrew’s solution is a smart choice for mid-to-large-sized corporations or even smaller corporations that can’t afford expensive training or trainers. It’s a cost-effective solution for those looking to provide any training, such as onboarding new employees. Employees can use the application on an ongoing basis to access courses specific to their job or general management leadership courses, just like they’d access a course library, but at the convenience of their homes.

                                                         Most people nowadays are spending time at home or in the office. With this solution, they don’t have to worry about entering the physical space for an immersive learning experience. Unlike gaming, they can do that sitting on their couch without moving around, so you don’t have to worry about getting dizzy when using VR. It’s a much more stationary experience.

                                                         If you’re interested in understanding how Andrew’s solution can help your organization, check out amikoxr.com or contact Andrew at Andrewp@amikoxr.com.

                                                          

                                                         [spp-transcript]

                                                          

                                                         Connect with Andrew Pek

                                                         • LinkedIn
                                                         • Twitter
                                                         • Website
                                                         
                                                         

                                                         Andrew’s books

                                                         • How to Start Building Your Wealth Investing in the Stock Market
                                                         • My Worst Investment Ever
                                                         • 9 Valuation Mistakes and How to Avoid Them
                                                         • Transform Your Business with Dr.Deming’s 14 Points
                                                         
                                                         

                                                         Andrew’s online programs

                                                         • Valuation Master Class
                                                         • The Become a Better Investor Community
                                                         • How to Start Building Your Wealth Investing in the Stock Market
                                                         • Finance Made Ridiculously Simple
                                                         • FVMR Investing: Quantamental Investing Across the World
                                                         • Become a Great Presenter and Increase Your Influence
                                                         • Transform Your Business with Dr. Deming’s 14 Points
                                                         • Achieve Your Goals
                                                         
                                                         

                                                         Connect with Andrew Stotz:

                                                         • astotz.com
                                                         • LinkedIn
                                                         • Facebook
                                                         • Instagram
                                                         • Threads
                                                         • Twitter
                                                         • YouTube
                                                         • My Worst Investment Ever Podcast
                                                         
                                                         ]]>30bce4f5-aa66-4f61-94e0-1ff8f3f70360Thu, 15 Aug 2024 06:00:00 +070039:08falsefullEnrich Your Future 09: The Fed Model and the Money IllusionIn this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 09: The Fed Model and the Money Illusion.

                                                         LEARNING: Just because there is a correlation doesn’t mean that there’s causation.

                                                          

                                                         “Just because there is a correlation doesn’t mean that there’s causation. The mere existence of a correlation doesn’t necessarily give it predictive value.”

                                                         Larry Swedroe

                                                          

                                                         In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                         Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 09: The Fed Model and the Money Illusion.

                                                         Chapter 09: The Fed Model and the Money Illusion

                                                         In this chapter, Larry illustrates why the Fed Model should not be used to determine whether the market is at fair value and that the E/P ratio is a much better predictor of future real returns.

                                                         The FED model

                                                         The stock and bond markets are filled with wrongheaded data mining. David Leinweber of First Quadrant famously illustrated this point with what he called “stupid data miner tricks.”

                                                         Leinweber sifted through a United Nations CD-ROM and discovered the single best predictor of the S&P 500 Index had been butter production in Bangladesh. His example perfectly illustrates that a correlation’s mere existence doesn’t necessarily give it predictive value. Some logical reason for the correlation is required for it to have credibility. Without a logical reason, the correlation is just a mere illusion.

                                                         According to Larry, the “money illusion” has the potential to create investment mistakes. It relates to one of the most popular indicators used by investors to determine whether the market is under or overvalued—what is known as “the Fed Model.”

                                                         The Federal Reserve was using the Fed model to determine if the market was fairly valued and how attractive stocks were priced relative to bonds. Using the “logic” that bonds and stocks are competing instruments, the model uses the yield on the 10-year Treasury bond to calculate “fair value,” comparing that rate to the earnings-price, or E/P, ratio (the inverse of the popular price-to-earnings, or P/E, ratio).

                                                         Larry points out two major problems with the Fed Model. The first relates to how the model is used by many investors. Edward Yardeni, at the time a market strategist for Morgan, Grenfell & Co. speculated that the Federal Reserve used the model to compare the valuation of stocks relative to bonds as competing instruments.

                                                         The model says nothing about absolute expected returns. Thus, stocks, using the Fed Model, might be priced under fair value relative to bonds, and they can have either high or low expected returns. The expected return of stocks is not determined by their relative value to bonds.

                                                         Instead, the expected real return is determined by the current dividend yield plus the expected real growth in dividends. To get the estimated nominal return, estimated inflation must be added. This is a critical point that seems to be lost on many investors. This leaves a trail of disappointed investors who believe low interest rates justify a high valuation for stocks without the high valuation impacting expected returns. The reality is that when P/Es are high, expected returns are low, and vice versa, regardless of the level of interest rates.

                                                         The second problem with the Fed Model, leading to a false conclusion, is that it fails to consider that inflation impacts corporate earnings differently than it does the return on fixed-income instruments.

                                                         Over the long term, the nominal growth rate of corporate earnings has been in line with the nominal growth rate of the economy. Similarly, the real growth rate of corporate earnings has been in line with the real growth of the economy. Thus, in the long term, the real growth rate of earnings is not impacted by inflation.

                                                         On the other hand, the yield to maturity on a 10-year bond is a nominal return—to get the real return, you must subtract inflation. The error of comparing a number that isn’t impacted by inflation to one that is, leads to the money illusion.

                                                         Understand how the money illusion is created

                                                         Understanding how the money illusion is created will prevent you from believing an environment of low interest rates allows for either high valuations or high future stock returns. Instead, if the current level of prices is high (a high P/E ratio), that should lead you to conclude that future returns to equities are likely to be lower than has historically been the case and vice versa. This doesn’t mean investors should avoid equities because they are highly valued or increase their allocations because they have low valuations.

                                                         Further reading

                                                         1. Kiplinger’s Personal Finance, February 1997.
                                                         2. Humphrey-Hawkins Report, Section 2: Economic and Financial Developments in 1997 Alan Greenspan, July 22, 1997.
                                                         3. William Bernstein, “The Efficient Frontier,” (Summer 2002).
                                                         4. Clifford S. Asness, “Fight the Fed Model: The Relationship Between Stock Market Yields, Bond Market Yields, and Future Returns,” (December 2002).
                                                         
                                                         

                                                         Did you miss out on the previous chapters? Check them out:

                                                         • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                         • Enrich Your Future 02: How Markets Set Prices
                                                         • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                                         • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                                         • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                                         • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                                         • Enrich Your Future 07: The Value of Security Analysis
                                                         • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                                         
                                                         

                                                         About Larry Swedroe

                                                         Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                         Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                         Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                         Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth...]]>In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 09: The Fed Model and the Money Illusion.

                                                         LEARNING: Just because there is a correlation doesn’t mean that there’s causation.

                                                          

                                                         “Just because there is a correlation doesn’t mean that there’s causation. The mere existence of a correlation doesn’t necessarily give it predictive value.”

                                                         Larry Swedroe

                                                          

                                                         In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                         Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 09: The Fed Model and the Money Illusion.

                                                         Chapter 09: The Fed Model and the Money Illusion

                                                         In this chapter, Larry illustrates why the Fed Model should not be used to determine whether the market is at fair value and that the E/P ratio is a much better predictor of future real returns.

                                                         The FED model

                                                         The stock and bond markets are filled with wrongheaded data mining. David Leinweber of First Quadrant famously illustrated this point with what he called “stupid data miner tricks.”

                                                         Leinweber sifted through a United Nations CD-ROM and discovered the single best predictor of the S&P 500 Index had been butter production in Bangladesh. His example perfectly illustrates that a correlation’s mere existence doesn’t necessarily give it predictive value. Some logical reason for the correlation is required for it to have credibility. Without a logical reason, the correlation is just a mere illusion.

                                                         According to Larry, the “money illusion” has the potential to create investment mistakes. It relates to one of the most popular indicators used by investors to determine whether the market is under or overvalued—what is known as “the Fed Model.”

                                                         The Federal Reserve was using the Fed model to determine if the market was fairly valued and how attractive stocks were priced relative to bonds. Using the “logic” that bonds and stocks are competing instruments, the model uses the yield on the 10-year Treasury bond to calculate “fair value,” comparing that rate to the earnings-price, or E/P, ratio (the inverse of the popular price-to-earnings, or P/E, ratio).

                                                         Larry points out two major problems with the Fed Model. The first relates to how the model is used by many investors. Edward Yardeni, at the time a market strategist for Morgan, Grenfell & Co. speculated that the Federal Reserve used the model to compare the valuation of stocks relative to bonds as competing instruments.

                                                         The model says nothing about absolute expected returns. Thus, stocks, using the Fed Model, might be priced under fair value relative to bonds, and they can have either high or low expected returns. The expected return of stocks is not determined by their relative value to bonds.

                                                         Instead, the expected real return is determined by the current dividend yield plus the expected real growth in dividends. To get the estimated nominal return, estimated inflation must be added. This is a critical point that seems to be lost on many investors. This leaves a trail of disappointed investors who believe low interest rates justify a high valuation for stocks without the high valuation impacting expected returns. The reality is that when P/Es are high, expected returns are low, and vice versa, regardless of the level of interest rates.

                                                         The second problem with the Fed Model, leading to a false conclusion, is that it fails to consider that inflation impacts corporate earnings differently than it does the return on fixed-income instruments.

                                                         Over the long term, the nominal growth rate of corporate earnings has been in line with the nominal growth rate of the economy. Similarly, the real growth rate of corporate earnings has been in line with the real growth of the economy. Thus, in the long term, the real growth rate of earnings is not impacted by inflation.

                                                         On the other hand, the yield to maturity on a 10-year bond is a nominal return—to get the real return, you must subtract inflation. The error of comparing a number that isn’t impacted by inflation to one that is, leads to the money illusion.

                                                         Understand how the money illusion is created

                                                         Understanding how the money illusion is created will prevent you from believing an environment of low interest rates allows for either high valuations or high future stock returns. Instead, if the current level of prices is high (a high P/E ratio), that should lead you to conclude that future returns to equities are likely to be lower than has historically been the case and vice versa. This doesn’t mean investors should avoid equities because they are highly valued or increase their allocations because they have low valuations.

                                                         Further reading

                                                         1. Kiplinger’s Personal Finance, February 1997.
                                                         2. Humphrey-Hawkins Report, Section 2: Economic and Financial Developments in 1997 Alan Greenspan, July 22, 1997.
                                                         3. William Bernstein, “The Efficient Frontier,” (Summer 2002).
                                                         4. Clifford S. Asness, “Fight the Fed Model: The Relationship Between Stock Market Yields, Bond Market Yields, and Future Returns,” (December 2002).
                                                         
                                                         

                                                         Did you miss out on the previous chapters? Check them out:

                                                         • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                         • Enrich Your Future 02: How Markets Set Prices
                                                         • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                                         • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                                         • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                                         • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                                         • Enrich Your Future 07: The Value of Security Analysis
                                                         • Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
                                                         
                                                         

                                                         About Larry Swedroe

                                                         Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                         Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                         Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                         Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                          

                                                         [spp-transcript]

                                                          

                                                         Connect with Larry Swedroe

                                                         • LinkedIn
                                                         • Twitter
                                                         • Website
                                                         • Books
                                                         
                                                         

                                                         Andrew’s books

                                                         • How to Start Building Your Wealth Investing in the Stock Market
                                                         • My Worst Investment Ever
                                                         • 9 Valuation Mistakes and How to Avoid Them
                                                         • Transform Your Business with Dr.Deming’s 14 Points
                                                         
                                                         

                                                         Andrew’s online programs

                                                         • Valuation Master Class
                                                         • The Become a Better Investor Community
                                                         • How to Start Building Your Wealth Investing in the Stock Market
                                                         • Finance Made Ridiculously Simple
                                                         • FVMR Investing: Quantamental Investing Across the World
                                                         • Become a Great Presenter and Increase Your Influence
                                                         • Transform Your Business with Dr. Deming’s 14 Points
                                                         • Achieve Your Goals
                                                         
                                                         

                                                         Connect with Andrew Stotz:

                                                         • astotz.com
                                                         • LinkedIn
                                                         • Facebook
                                                         • Instagram
                                                         • Threads
                                                         • Twitter
                                                         • YouTube
                                                         • My Worst Investment Ever Podcast
                                                         
                                                         ]]>638b4a3a-3cbb-493c-9b55-272e726602e3Tue, 13 Aug 2024 06:00:00 +070024:46falsefullPavan Sukhdev - Don’t Make Exceptions Rules Are the EssenceBIO: Pavan Sukhdev’s remarkable journey from scientist to international banker to environmental economist has brought him to the forefront of the sustainability movement.

                                                         STORY: Pavan ignored his investment rules and invested in a bond, which caused him to lose almost his entire investment.

                                                         LEARNING: Don’t make exceptions; the rules are the essence. Set up concentration risk limits. Diversify.

                                                          

                                                         “A lot of investment mistakes are about not following your own disciplines. Had I followed my own disciplines, I wouldn’t be telling you this story.”

                                                         Pavan Sukhdev

                                                          

                                                         Guest profile

                                                         Pavan Sukhdev’s remarkable journey from scientist to international banker to environmental economist has brought him to the forefront of the sustainability movement. As CEO and Founder of GIST Impact, he collaborates with corporations and investors, leveraging impact economics and technology to measure a business’s holistic value contribution to the world.

                                                         Worst investment ever

                                                         Pavan is a relatively disciplined investor who always tries to maintain his money’s principal value by investing it wisely. For this reason, Pavan follows a couple of personal investment rules.

                                                         First, wherever he invests, he either makes friends or has friends. Second, Pavan follows a strict logic when investing in financial assets—he only invests in sovereign bonds. Third, Pavan has set up a concentration risk limit of $100,000 for a single sovereign emerging market. He never invests more than $50,000 on a credit. Fourth, Pavan always reads about the company he wants to invest in to understand what it does and its credit rating. Fifth, Pavan typically invests in sectors where he would be above average in reading and knowledge about that company.

                                                         Once, a friend came along and asked Pavan if he knew of a particular company with a bond earning 8.75%. Pavan hadn’t heard about it. But he happened to know the family that owned it, and he was interested in it. Pavan decided to invest $100,000 instead of putting his maximum concentration of $50,000.

                                                         As part of his investment strategy, Pavan reads about companies. A news flash said that the company was involved in a contract in Malaysia. Pavan thought this was great, but that was that.

                                                         He never followed up on the news. It happens that the company lost the contract. Losing the contract was a big thing that caused the bond price to go down to $75 from $88. At this point, Pavan should have reduced his exposure by bringing the $100,000 down to $50,000, but he didn’t. He continued to sit on the losses and hung on, and the price kept dropping. Finally, at some point, when it was just too low for it to make any difference, the company stopped paying coupons.

                                                         Lessons learned

                                                         • Don’t make exceptions; the rules are the essence.
                                                         • Set up concentration risk limits and reflect the volatility of that asset.
                                                         • Diversify
                                                         • Don’t sit on losses.
                                                         
                                                         

                                                         Andrew’s takeaways

                                                         • Follow and stick to a stop-loss system.
                                                         • Don’t buy something just because you’ve sold something else.
                                                         
                                                         

                                                         Actionable advice

                                                         Set your concentration risk limits, put your trading style in place, and diversify.

                                                         No.1 goal for the next 12 months

                                                         Pavan’s number one goal for the next 12 months is to get his company profitable because it’s nice to be right, but it’s better to be profitable.

                                                         Parting words

                                                          

                                                         “All the best, guys. Invest wisely and invest well, and when it works, do something useful with that money.”

                                                         Pavan Sukhdev

                                                          

                                                         [spp-transcript]

                                                          

                                                         Connect with Pavan Sukhdev

                                                         • Linkedin
                                                         • Website
                                                         
                                                         

                                                         Andrew’s books

                                                         • How to Start Building Your Wealth Investing in the Stock Market
                                                         • My Worst Investment Ever
                                                         • 9 Valuation Mistakes and How to Avoid Them
                                                         • Transform Your Business with Dr.Deming’s 14 Points
                                                         
                                                         

                                                         Andrew’s online programs

                                                         • Valuation Master Class
                                                         • The Become a Better Investor Community
                                                         • How to Start Building Your Wealth Investing in the Stock Market
                                                         • Finance Made Ridiculously Simple
                                                         • FVMR Investing: Quantamental Investing Across the World
                                                         • Become a Great Presenter and Increase Your Influence
                                                         • Transform Your Business with Dr. Deming’s 14 Points
                                                         • Achieve Your Goals
                                                         
                                                         

                                                         Connect with Andrew Stotz:

                                                         • astotz.com
                                                         • LinkedIn
                                                         • Facebook
                                                         • Instagram
                                                         • Threads
                                                         • Twitter
                                                         • YouTube
                                                         • My Worst Investment Ever Podcast
                                                         
                                                         ]]>BIO: Pavan Sukhdev’s remarkable journey from scientist to international banker to environmental economist has brought him to the forefront of the sustainability movement.

                                                         STORY: Pavan ignored his investment rules and invested in a bond, which caused him to lose almost his entire investment.

                                                         LEARNING: Don’t make exceptions; the rules are the essence. Set up concentration risk limits. Diversify.

                                                          

                                                         “A lot of investment mistakes are about not following your own disciplines. Had I followed my own disciplines, I wouldn’t be telling you this story.”

                                                         Pavan Sukhdev

                                                          

                                                         Guest profile

                                                         Pavan Sukhdev’s remarkable journey from scientist to international banker to environmental economist has brought him to the forefront of the sustainability movement. As CEO and Founder of GIST Impact, he collaborates with corporations and investors, leveraging impact economics and technology to measure a business’s holistic value contribution to the world.

                                                         Worst investment ever

                                                         Pavan is a relatively disciplined investor who always tries to maintain his money’s principal value by investing it wisely. For this reason, Pavan follows a couple of personal investment rules.

                                                         First, wherever he invests, he either makes friends or has friends. Second, Pavan follows a strict logic when investing in financial assets—he only invests in sovereign bonds. Third, Pavan has set up a concentration risk limit of $100,000 for a single sovereign emerging market. He never invests more than $50,000 on a credit. Fourth, Pavan always reads about the company he wants to invest in to understand what it does and its credit rating. Fifth, Pavan typically invests in sectors where he would be above average in reading and knowledge about that company.

                                                         Once, a friend came along and asked Pavan if he knew of a particular company with a bond earning 8.75%. Pavan hadn’t heard about it. But he happened to know the family that owned it, and he was interested in it. Pavan decided to invest $100,000 instead of putting his maximum concentration of $50,000.

                                                         As part of his investment strategy, Pavan reads about companies. A news flash said that the company was involved in a contract in Malaysia. Pavan thought this was great, but that was that.

                                                         He never followed up on the news. It happens that the company lost the contract. Losing the contract was a big thing that caused the bond price to go down to $75 from $88. At this point, Pavan should have reduced his exposure by bringing the $100,000 down to $50,000, but he didn’t. He continued to sit on the losses and hung on, and the price kept dropping. Finally, at some point, when it was just too low for it to make any difference, the company stopped paying coupons.

                                                         Lessons learned

                                                         • Don’t make exceptions; the rules are the essence.
                                                         • Set up concentration risk limits and reflect the volatility of that asset.
                                                         • Diversify
                                                         • Don’t sit on losses.
                                                         
                                                         

                                                         Andrew’s takeaways

                                                         • Follow and stick to a stop-loss system.
                                                         • Don’t buy something just because you’ve sold something else.
                                                         
                                                         

                                                         Actionable advice

                                                         Set your concentration risk limits, put your trading style in place, and diversify.

                                                         No.1 goal for the next 12 months

                                                         Pavan’s number one goal for the next 12 months is to get his company profitable because it’s nice to be right, but it’s better to be profitable.

                                                         Parting words

                                                          

                                                         “All the best, guys. Invest wisely and invest well, and when it works, do something useful with that money.”

                                                         Pavan Sukhdev

                                                          

                                                         [spp-transcript]

                                                          

                                                         Connect with Pavan Sukhdev

                                                         • Linkedin
                                                         • Website
                                                         
                                                         

                                                         Andrew’s books

                                                         • How to Start Building Your Wealth Investing in the Stock Market
                                                         • My Worst Investment Ever
                                                         • 9 Valuation Mistakes and How to Avoid Them
                                                         • Transform Your Business with Dr.Deming’s 14 Points
                                                         
                                                         

                                                         Andrew’s online programs

                                                         • Valuation Master Class
                                                         • The Become a Better Investor Community
                                                         • How to Start Building Your Wealth Investing in the Stock Market
                                                         • Finance Made Ridiculously Simple
                                                         • FVMR Investing: Quantamental Investing Across the World
                                                         • Become a Great Presenter and Increase Your Influence
                                                         • Transform Your Business with Dr. Deming’s 14 Points
                                                         • Achieve Your Goals
                                                         
                                                         

                                                         Connect with Andrew Stotz:

                                                         • astotz.com
                                                         • LinkedIn
                                                         • Facebook
                                                         • Instagram
                                                         • Threads
                                                         • Twitter
                                                         • YouTube
                                                         • My Worst Investment Ever Podcast
                                                         
                                                         ]]>e9f1aca1-b1db-423c-85ff-69fab74f1ad2Thu, 08 Aug 2024 06:00:00 +070037:00falsefullEnrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market ReturnIn this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 08: Be Careful What You Ask For.

                                                         LEARNING: High growth rates don’t always mean high stock returns.

                                                          

                                                         “Emerging markets are very much like the rest of the world’s capital markets—they do an excellent job of reflecting economic growth prospects into stock prices.”

                                                         Larry Swedroe

                                                          

                                                         In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                         Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 08: Be Careful What You Ask For.

                                                         Chapter 08: Be Careful What You Ask For

                                                         In this chapter, Larry cautions people to be careful what they wish for in investing. He emphasizes the daunting challenge of active management, a path many choose in the belief that they can accurately forecast market trends.

                                                         However, as Larry points out, the reality is far from this ideal. The unpredictability of the market makes it almost impossible to predict with 100% accuracy, a fact that investors should be acutely aware of.

                                                         High growth rates don’t always mean high stock returns

                                                         It’s important to note that high growth rates don’t always translate into high stock returns, underscoring the unpredictability of market outcomes. According to Larry, for today’s investors, the equivalent of the “Midas touch” (the king who turned everything he touched into gold) might be the ability to forecast economic growth rates.

                                                         If investors could forecast with 100% certainty which countries would have the highest growth rates, they could invest in them and avoid those with low growth rates. This would lead to abnormal profits—or, perhaps not.

                                                         Nobody can predict with that accuracy. Even if one could make such a prediction, they may still not make the profits they think they will. This is because, as Larry explains, experts have found that there has been a slightly negative correlation between country growth rates and stock returns.

                                                         A 2006 study on emerging markets by Jim Davis of Dimensional Fund Advisors found that the high-growth countries from 1990 to 2005 returned 16.4%, and the low-growth countries returned the same 16.4%.

                                                         Such evidence has led Larry to conclude that it doesn’t matter if you can even forecast which countries will have high growth rates; the market will make the same forecast and adjust stock prices accordingly.

                                                         Therefore, to beat the market, you must be able to forecast better than the market already expects, and to do so, you need to gather information at a cost. In other words, you can’t just be smarter than the market; you have to be smarter than the market enough to overcome all your expenses of gathering information and trading costs.

                                                         Larry emphasizes that emerging markets are very much like the rest of the world’s capital markets—they do an excellent job of reflecting economic growth prospects into stock prices. The only advantage an investor would have is the ability to forecast surprises in growth rates, which, by definition, are unpredictable.

                                                         Did you miss out on the previous chapters? Check them out:

                                                         • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                         • Enrich Your Future 02: How Markets Set Prices
                                                         • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                                         • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                                         • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                                         • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                                         • Enrich Your Future 07: The Value of Security Analysis
                                                         
                                                         

                                                         About Larry Swedroe

                                                         Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                         Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                         Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                         Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                          

                                                         [spp-transcript]

                                                          

                                                         Connect with Larry Swedroe

                                                         • LinkedIn
                                                         • Twitter
                                                         • Website
                                                         • Books
                                                         
                                                         

                                                         Andrew’s books

                                                         • How to Start Building Your Wealth Investing in the Stock Market
                                                         • My Worst Investment Ever
                                                         • 9 Valuation Mistakes and How to Avoid Them
                                                         • Transform Your Business with Dr.Deming’s 14 Points
                                                         
                                                         

                                                         Andrew’s online programs

                                                         • Valuation Master Class
                                                         • The Become a Better Investor Community
                                                         • How to Start Building Your Wealth Investing in the Stock Market
                                                         • Finance Made Ridiculously Simple
                                                         • FVMR Investing: Quantamental Investing Across the World
                                                         • Become a Great Presenter and Increase Your Influence
                                                         • Transform Your Business with Dr. Deming’s 14 Points
                                                         • In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 08: Be Careful What You Ask For.

                                                           LEARNING: High growth rates don’t always mean high stock returns.

                                                            

                                                           “Emerging markets are very much like the rest of the world’s capital markets—they do an excellent job of reflecting economic growth prospects into stock prices.”

                                                           Larry Swedroe

                                                            

                                                           In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                           Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 08: Be Careful What You Ask For.

                                                           Chapter 08: Be Careful What You Ask For

                                                           In this chapter, Larry cautions people to be careful what they wish for in investing. He emphasizes the daunting challenge of active management, a path many choose in the belief that they can accurately forecast market trends.

                                                           However, as Larry points out, the reality is far from this ideal. The unpredictability of the market makes it almost impossible to predict with 100% accuracy, a fact that investors should be acutely aware of.

                                                           High growth rates don’t always mean high stock returns

                                                           It’s important to note that high growth rates don’t always translate into high stock returns, underscoring the unpredictability of market outcomes. According to Larry, for today’s investors, the equivalent of the “Midas touch” (the king who turned everything he touched into gold) might be the ability to forecast economic growth rates.

                                                           If investors could forecast with 100% certainty which countries would have the highest growth rates, they could invest in them and avoid those with low growth rates. This would lead to abnormal profits—or, perhaps not.

                                                           Nobody can predict with that accuracy. Even if one could make such a prediction, they may still not make the profits they think they will. This is because, as Larry explains, experts have found that there has been a slightly negative correlation between country growth rates and stock returns.

                                                           A 2006 study on emerging markets by Jim Davis of Dimensional Fund Advisors found that the high-growth countries from 1990 to 2005 returned 16.4%, and the low-growth countries returned the same 16.4%.

                                                           Such evidence has led Larry to conclude that it doesn’t matter if you can even forecast which countries will have high growth rates; the market will make the same forecast and adjust stock prices accordingly.

                                                           Therefore, to beat the market, you must be able to forecast better than the market already expects, and to do so, you need to gather information at a cost. In other words, you can’t just be smarter than the market; you have to be smarter than the market enough to overcome all your expenses of gathering information and trading costs.

                                                           Larry emphasizes that emerging markets are very much like the rest of the world’s capital markets—they do an excellent job of reflecting economic growth prospects into stock prices. The only advantage an investor would have is the ability to forecast surprises in growth rates, which, by definition, are unpredictable.

                                                           Did you miss out on the previous chapters? Check them out:

                                                           • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                           • Enrich Your Future 02: How Markets Set Prices
                                                           • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                                           • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                                           • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                                           • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                                           • Enrich Your Future 07: The Value of Security Analysis
                                                           
                                                           

                                                           About Larry Swedroe

                                                           Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                           Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                           Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                           Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                            

                                                           [spp-transcript]

                                                            

                                                           Connect with Larry Swedroe

                                                           • LinkedIn
                                                           • Twitter
                                                           • Website
                                                           • Books
                                                           
                                                           

                                                           Andrew’s books

                                                           • How to Start Building Your Wealth Investing in the Stock Market
                                                           • My Worst Investment Ever
                                                           • 9 Valuation Mistakes and How to Avoid Them
                                                           • Transform Your Business with Dr.Deming’s 14 Points
                                                           
                                                           

                                                           Andrew’s online programs

                                                           • Valuation Master Class
                                                           • The Become a Better Investor Community
                                                           • How to Start Building Your Wealth Investing in the Stock Market
                                                           • Finance Made Ridiculously Simple
                                                           • FVMR Investing: Quantamental Investing Across the World
                                                           • Become a Great Presenter and Increase Your Influence
                                                           • Transform Your Business with Dr. Deming’s 14 Points
                                                           • Achieve Your Goals
                                                           
                                                           

                                                           Connect with Andrew Stotz:

                                                           • astotz.com
                                                           • LinkedIn
                                                           • Facebook
                                                           • Instagram
                                                           • Threads
                                                           • Twitter
                                                           • YouTube
                                                           • My Worst Investment Ever Podcast
                                                           
                                                           ]]>d5f7b6d7-5658-4fdb-9e91-0fc3c395d422Tue, 06 Aug 2024 06:00:00 +070014:09falsefullEnrich Your Future 07: The Value of Security AnalysisIn this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 07: The Value of Security Analysis.

                                                           LEARNING: Smart investors, like smart businesspeople, care about results, not efforts.

                                                            

                                                           “Smart investors, like smart businesspeople, care about results, not efforts. That is why “smart money” invests in “passively managed,” structured portfolios that invest systematically in a transparent and replicable manner.”

                                                           Larry Swedroe

                                                            

                                                           In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over the 30 years to help investors as the head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                           Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 07: The Value of Security Analysis.

                                                           Chapter 07: The Value of Security Analysis

                                                           In this chapter, Larry explains how to test the efficiency of the market by looking at how good security analysts are at predicting the future. If they can outsmart the markets, then the markets are not efficient.

                                                           Do investors who follow security analysts's recommendations outperform the market?

                                                           In business, results are what matters— not effort. The same is true in investing because we cannot spend efforts, only results. The basic premise of active management is that, through their efforts, security analysts can identify and recommend undervalued stocks and avoid overvalued ones. As a result, investors who follow their recommendations will outperform the market. Is this premise myth or reality?

                                                           To answer this question, Larry relies on the robust findings of academic research in the paper Analysts and Anomalies. The authors meticulously examined the recommendations of U.S. security analysts over the period 1994 through 2017. Their findings debunk the myth of analysts' infallibility and shed light on the surprising ways analysts' predictions conflict with well-documented anomalies. They also found that buy recommendations did not predict returns, though sell recommendations did predict lower returns. Another intriguing finding was that among the group of "market" anomalies (such as momentum and idiosyncratic risk), which are based only on stock returns, price, and volume data, analysts produce more favorable recommendations and forecast higher returns among the stocks that are stronger buys according to market anomalies. This is perhaps surprising, as analysts are supposed to be experts in firms' fundamentals. Yet, they performed best with anomalies not based on accounting data.

                                                           The evidence in this academic paper suggests that analysts even contribute to mispricing, as their recommendations are systematically biased by favoring overvalued stocks according to anomaly-based composite mispricing scores. The authors concluded: "Analysts today are still overlooking a good deal of valuable, anomaly-related information."

                                                           Results are what matters not effort

                                                           In conclusion, Larry states that if corporate insiders (e.g., boards of directors), with access to far more information than any security analyst is likely to have, have such great difficulty in determining a "correct" valuation, then it is easy to understand why the results of active management are poor and inconsistent.

                                                           While security analysts and active portfolio managers make great efforts to beat the market, historical evidence shows that those efforts have proven counterproductive most of the time. And savvy investors, like smart businesspeople, care about results, not efforts. That is why "smart money" invests in "passively managed," structured portfolios that invest systematically in a transparent and replicable manner.

                                                           Further reading

                                                           1. Joseph Engelberg, David McLean and Jeffrey Pontiff, “Analysts and Anomalies,” Journal of Accounting and Finance (February 2020).
                                                           
                                                           

                                                           Did you miss out on the previous chapters? Check them out:

                                                           • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                           • Enrich Your Future 02: How Markets Set Prices
                                                           • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                                           • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                                           • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                                           • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                                           
                                                           

                                                           About Larry Swedroe

                                                           Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                           Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                           Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                           Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                            

                                                           [spp-transcript]

                                                            

                                                           Connect with Larry Swedroe

                                                           • LinkedIn
                                                           • Twitter
                                                           • Website
                                                           • Books
                                                           
                                                           

                                                           Andrew’s books

                                                           • How to Start Building Your Wealth Investing in the Stock Market
                                                           • My Worst Investment Ever
                                                           • 9 Valuation Mistakes and How to Avoid Them
                                                           • Transform Your Business with Dr.Deming’s 14 Points
                                                           
                                                           

                                                           Andrew’s online programs

                                                           • Valuation Master Class
                                                           • The Become a Better Investor Community
                                                           • How to Start Building Your Wealth Investing in the Stock Market
                                                           • In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 07: The Value of Security Analysis.

                                                             LEARNING: Smart investors, like smart businesspeople, care about results, not efforts.

                                                              

                                                             “Smart investors, like smart businesspeople, care about results, not efforts. That is why “smart money” invests in “passively managed,” structured portfolios that invest systematically in a transparent and replicable manner.”

                                                             Larry Swedroe

                                                              

                                                             In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over the 30 years to help investors as the head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                             Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 07: The Value of Security Analysis.

                                                             Chapter 07: The Value of Security Analysis

                                                             In this chapter, Larry explains how to test the efficiency of the market by looking at how good security analysts are at predicting the future. If they can outsmart the markets, then the markets are not efficient.

                                                             Do investors who follow security analysts's recommendations outperform the market?

                                                             In business, results are what matters— not effort. The same is true in investing because we cannot spend efforts, only results. The basic premise of active management is that, through their efforts, security analysts can identify and recommend undervalued stocks and avoid overvalued ones. As a result, investors who follow their recommendations will outperform the market. Is this premise myth or reality?

                                                             To answer this question, Larry relies on the robust findings of academic research in the paper Analysts and Anomalies. The authors meticulously examined the recommendations of U.S. security analysts over the period 1994 through 2017. Their findings debunk the myth of analysts' infallibility and shed light on the surprising ways analysts' predictions conflict with well-documented anomalies. They also found that buy recommendations did not predict returns, though sell recommendations did predict lower returns. Another intriguing finding was that among the group of "market" anomalies (such as momentum and idiosyncratic risk), which are based only on stock returns, price, and volume data, analysts produce more favorable recommendations and forecast higher returns among the stocks that are stronger buys according to market anomalies. This is perhaps surprising, as analysts are supposed to be experts in firms' fundamentals. Yet, they performed best with anomalies not based on accounting data.

                                                             The evidence in this academic paper suggests that analysts even contribute to mispricing, as their recommendations are systematically biased by favoring overvalued stocks according to anomaly-based composite mispricing scores. The authors concluded: "Analysts today are still overlooking a good deal of valuable, anomaly-related information."

                                                             Results are what matters not effort

                                                             In conclusion, Larry states that if corporate insiders (e.g., boards of directors), with access to far more information than any security analyst is likely to have, have such great difficulty in determining a "correct" valuation, then it is easy to understand why the results of active management are poor and inconsistent.

                                                             While security analysts and active portfolio managers make great efforts to beat the market, historical evidence shows that those efforts have proven counterproductive most of the time. And savvy investors, like smart businesspeople, care about results, not efforts. That is why "smart money" invests in "passively managed," structured portfolios that invest systematically in a transparent and replicable manner.

                                                             Further reading

                                                             1. Joseph Engelberg, David McLean and Jeffrey Pontiff, “Analysts and Anomalies,” Journal of Accounting and Finance (February 2020).
                                                             
                                                             

                                                             Did you miss out on the previous chapters? Check them out:

                                                             • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                             • Enrich Your Future 02: How Markets Set Prices
                                                             • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                                             • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                                             • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                                             • Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
                                                             
                                                             

                                                             About Larry Swedroe

                                                             Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                             Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                             Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                             Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                              

                                                             [spp-transcript]

                                                              

                                                             Connect with Larry Swedroe

                                                             • LinkedIn
                                                             • Twitter
                                                             • Website
                                                             • Books
                                                             
                                                             

                                                             Andrew’s books

                                                             • How to Start Building Your Wealth Investing in the Stock Market
                                                             • My Worst Investment Ever
                                                             • 9 Valuation Mistakes and How to Avoid Them
                                                             • Transform Your Business with Dr.Deming’s 14 Points
                                                             
                                                             

                                                             Andrew’s online programs

                                                             • Valuation Master Class
                                                             • The Become a Better Investor Community
                                                             • How to Start Building Your Wealth Investing in the Stock Market
                                                             • Finance Made Ridiculously Simple
                                                             • FVMR Investing: Quantamental Investing Across the World
                                                             • Become a Great Presenter and Increase Your Influence
                                                             • Transform Your Business with Dr. Deming’s 14 Points
                                                             • Achieve Your Goals
                                                             
                                                             

                                                             Connect with Andrew Stotz:

                                                             • astotz.com
                                                             • LinkedIn
                                                             • Facebook
                                                             • Instagram
                                                             • Threads
                                                             • Twitter
                                                             • YouTube
                                                             • My Worst Investment Ever Podcast
                                                             
                                                             ]]>4306afa6-eef0-476c-9c52-a1367c646c45Tue, 30 Jul 2024 06:00:00 +070029:59falsefullISMS 42: Emerging Markets Are Hurting, but CheapClick here to get the PDF with all charts and graphs

                                                              

                                                             • Introducing emerging markets
                                                             • Our FVMR framework
                                                             • Fundamentals: Emerging markets are about 20% less profitable
                                                             • Valuation: Emerging markets are about 41% cheaper
                                                             • Asset class and region/country allocations
                                                             
                                                             

                                                             Introducing emerging markets

                                                             
                                                             

                                                             Our FVMR framework

                                                              

                                                             
                                                             

                                                              

                                                             Fundamentals: Emerging markets are about 20% less profitable

                                                             
                                                             

                                                             
                                                             

                                                             Valuation: Emerging markets are about 41% cheaper

                                                             
                                                             

                                                             
                                                             

                                                             • UK: Cheap and high profitability
                                                             • Germany and Korea: Cheap and low profitability
                                                             • Australia and US: Expensive but high profitability
                                                             
                                                             

                                                             Asset class and region/country allocations

                                                             
                                                             

                                                             • This is
                                                             
                                                             

                                                             not

                                                             a

                                                             • recommendation
                                                             
                                                             

                                                             
                                                             

                                                             • My next rebalance is in early September
                                                             • Everything could change then
                                                             
                                                             

                                                             
                                                             

                                                             • This is
                                                             • not
                                                             • a
                                                             • recommendation
                                                             • My next rebalance is in early September
                                                             • Everything could change then
                                                             
                                                             

                                                              

                                                             Click here to get the PDF with all charts and graphs

                                                              

                                                             Andrew’s books

                                                             • How to Start Building Your Wealth Investing in the Stock Market
                                                             • My Worst Investment Ever
                                                             • 9 Valuation Mistakes and How to Avoid Them
                                                             • Transform Your Business with Dr.Deming’s 14 Points
                                                             
                                                             

                                                             Andrew’s online programs

                                                             • Valuation Master Class
                                                             • The Become a Better Investor Community
                                                             • How to Start Building Your Wealth Investing in the Stock Market
                                                             • Finance Made Ridiculously Simple
                                                             • FVMR Investing: Quantamental Investing Across the World
                                                             • Become a Great Presenter and Increase Your Influence
                                                             • Transform Your Business with Dr. Deming’s 14 Points
                                                             • Achieve Your Goals
                                                             
                                                             

                                                             Connect with Andrew Stotz:

                                                             • astotz.com
                                                             • LinkedIn
                                                             • Facebook
                                                             • Instagram
                                                             • Twitter
                                                             • YouTube
                                                             • My Worst Investment Ever Podcast
                                                             
                                                             

                                                             
                                                             

                                                             ]]>Click here to get the PDF with all charts and graphs

                                                              

                                                             • Introducing emerging markets
                                                             • Our FVMR framework
                                                             • Fundamentals: Emerging markets are about 20% less profitable
                                                             • Valuation: Emerging markets are about 41% cheaper
                                                             • Asset class and region/country allocations
                                                             
                                                             

                                                             Introducing emerging markets

                                                             
                                                             

                                                             Our FVMR framework

                                                              

                                                             
                                                             

                                                              

                                                             Fundamentals: Emerging markets are about 20% less profitable

                                                             
                                                             

                                                             
                                                             

                                                             Valuation: Emerging markets are about 41% cheaper

                                                             
                                                             

                                                             
                                                             

                                                             • UK: Cheap and high profitability
                                                             • Germany and Korea: Cheap and low profitability
                                                             • Australia and US: Expensive but high profitability
                                                             
                                                             

                                                             Asset class and region/country allocations

                                                             
                                                             

                                                             • This is
                                                             
                                                             

                                                             not

                                                             a

                                                             • recommendation
                                                             
                                                             

                                                             
                                                             

                                                             • My next rebalance is in early September
                                                             • Everything could change then
                                                             
                                                             

                                                             
                                                             

                                                             • This is
                                                             • not
                                                             • a
                                                             • recommendation
                                                             • My next rebalance is in early September
                                                             • Everything could change then
                                                             
                                                             

                                                              

                                                             Click here to get the PDF with all charts and graphs

                                                              

                                                             Andrew’s books

                                                             • How to Start Building Your Wealth Investing in the Stock Market
                                                             • My Worst Investment Ever
                                                             • 9 Valuation Mistakes and How to Avoid Them
                                                             • Transform Your Business with Dr.Deming’s 14 Points
                                                             
                                                             

                                                             Andrew’s online programs

                                                             • Valuation Master Class
                                                             • The Become a Better Investor Community
                                                             • How to Start Building Your Wealth Investing in the Stock Market
                                                             • Finance Made Ridiculously Simple
                                                             • FVMR Investing: Quantamental Investing Across the World
                                                             • Become a Great Presenter and Increase Your Influence
                                                             • Transform Your Business with Dr. Deming’s 14 Points
                                                             • Achieve Your Goals
                                                             
                                                             

                                                             Connect with Andrew Stotz:

                                                             • astotz.com
                                                             • LinkedIn
                                                             • Facebook
                                                             • Instagram
                                                             • Twitter
                                                             • YouTube
                                                             • My Worst Investment Ever Podcast
                                                             
                                                             

                                                             
                                                             

                                                             ]]>42d8f97b-af83-4249-b41c-0158ac6f373eFri, 26 Jul 2024 06:00:00 +070007:14falsefullJustus Hammer - Good Idea Versus Wrong TimingBIO: Justus Hammer is the Group CEO and Co-founder of Mad Paws. Over the past two years, he has invested in over 45 startups. He has served as an advisor and early investor in Airtasker and a founding investor and advisor to VICE Golf.

                                                             STORY: Justus developed an idea to make real estate buying easier. He wanted to expand outside of Australia when COVID hit. Justus took a pause, thinking that the market would tank further. Instead, property prices doubled in the next 18 months.

                                                             LEARNING: What works in one asset class will not necessarily work in another. The real estate market dynamics are very different in each market. Timing matters, but you can never really know whether your timing is right until after.

                                                              

                                                             “I don’t think there is a single truth or strategy that works for everyone. Just think about it and ask yourself what you want to achieve and what the most likely scenario is for you to get there.”

                                                             Justus Hammer

                                                              

                                                             Guest profile

                                                             Justus Hammer is the Group CEO and Co-founder of Mad Paws. He has invested in over 45 startups over the past two years, serving as an advisor and early investor to Airtasker and a founding investor and advisor to VICE Golf. He has not only been involved in starting more than ten companies in the tech space, like Spreets and Mad Paws, but has also developed a growing interest in cash flow businesses over the past ten years.

                                                             Worst investment ever

                                                             Justus saw a big opportunity in the real estate space to improve and make purchasing a property easier. There’s a whole lot of angst that goes with that, and many people are very scared about the process and sometimes get it wrong. So, Justus and his company wanted to create a better way to get buyers from property A into property B.

                                                             They spent time building the idea and even had some of Australia’s biggest real estate companies backing them. In the beginning, the company was working and managed to transact around 40 properties.

                                                             But it was a tough time in Australia’s real estate market, so Justus ran into many issues. One particular issue was timing. The market was going down, so they had to buy properties, try to improve them, and sell them quickly.

                                                             They also ran into the problem of not being aggressive enough on the buying side, so they couldn’t get many properties. Still, they made money on about 60 or 70% of their properties. But they also had a couple that really killed them.

                                                             Justus believed the market would improve, so they sat through it. The market kept dropping, and they started looking for other opportunities. They began to look closer into the numbers, the unit economics, and what had been working. They realized the model was working pretty well outside Australia.

                                                             His company decided to expand into Europe, but before they did, COVID hit. COVID changed the dynamics completely. Debt facility providers pulled back and refused to give them a loan. Their real estate partners decided to figure out the situation first, believing the market value would go down. The market turned out to be the opposite, and property prices doubled in the next 18 months.

                                                             Lessons learned

                                                             • What works in one asset class will not necessarily work in another.
                                                             • The real estate market dynamics are very different in the US, Europe, and Australia.
                                                             • You can’t have regrets in investing. You’ve got to take the good and the bad.
                                                             • There isn’t a single truth or strategy that works for everyone.
                                                             
                                                             

                                                             Andrew’s takeaways

                                                             • Timing matters, but you can never really know whether your timing is right until after.
                                                             • Transferring a business model doesn’t always work.
                                                             • Investing is going to be a roller coaster, no matter what. It’s really a matter of holding on through the tough times.
                                                             
                                                             

                                                             Actionable advice

                                                             Justus underscores the value of pursuing activities that provide non-monetary benefits. He advises finding a balance between doing what you’re good at and what brings you joy. This advice serves as a guiding light, helping the audience navigate the complex terrain of work-life balance and personal fulfillment.

                                                             Justus’s recommendations

                                                             Justus recommends reading Atomic Habits to find structure and make your life easier. He also recommends The Subtle Art of Not Giving a F*ck if you want to focus on what matters and reducing suffering.

                                                             No.1 goal for the next 12 months

                                                             Justus’s number one goal for the next 12 months is to get Mad Paws to a better position and to invest in cash-flow businesses.

                                                             Parting words

                                                              

                                                             “You’ve got to take some risk, but ensure you measure it as much as possible.”

                                                             Justus Hammer

                                                              

                                                             [spp-transcript]

                                                              

                                                             Connect with Justus Hammer

                                                             • LinkedIn
                                                             
                                                             

                                                             Andrew’s books

                                                             • How to Start Building Your Wealth Investing in the Stock Market
                                                             • My Worst Investment Ever
                                                             • 9 Valuation Mistakes and How to Avoid Them
                                                             • Transform Your Business with Dr.Deming’s 14 Points
                                                             
                                                             

                                                             Andrew’s online programs

                                                             • Valuation Master Class
                                                             • The Become a Better Investor Community
                                                             • How to Start Building Your Wealth Investing in the Stock Market
                                                             • Finance Made Ridiculously Simple
                                                             • FVMR Investing: Quantamental Investing Across the World
                                                             • Become a Great Presenter and Increase Your Influence
                                                             • Transform Your Business with Dr. Deming’s 14 Points
                                                             • Achieve Your Goals
                                                             
                                                             

                                                             Connect with Andrew Stotz:

                                                             • astotz.com
                                                             • LinkedIn
                                                             • Facebook
                                                             • Instagram
                                                             • Threads
                                                             • Twitter
                                                             • YouTube
                                                             • My Worst Investment Ever Podcast
                                                             
                                                             ]]>BIO: Justus Hammer is the Group CEO and Co-founder of Mad Paws. Over the past two years, he has invested in over 45 startups. He has served as an advisor and early investor in Airtasker and a founding investor and advisor to VICE Golf.

                                                             STORY: Justus developed an idea to make real estate buying easier. He wanted to expand outside of Australia when COVID hit. Justus took a pause, thinking that the market would tank further. Instead, property prices doubled in the next 18 months.

                                                             LEARNING: What works in one asset class will not necessarily work in another. The real estate market dynamics are very different in each market. Timing matters, but you can never really know whether your timing is right until after.

                                                              

                                                             “I don’t think there is a single truth or strategy that works for everyone. Just think about it and ask yourself what you want to achieve and what the most likely scenario is for you to get there.”

                                                             Justus Hammer

                                                              

                                                             Guest profile

                                                             Justus Hammer is the Group CEO and Co-founder of Mad Paws. He has invested in over 45 startups over the past two years, serving as an advisor and early investor to Airtasker and a founding investor and advisor to VICE Golf. He has not only been involved in starting more than ten companies in the tech space, like Spreets and Mad Paws, but has also developed a growing interest in cash flow businesses over the past ten years.

                                                             Worst investment ever

                                                             Justus saw a big opportunity in the real estate space to improve and make purchasing a property easier. There’s a whole lot of angst that goes with that, and many people are very scared about the process and sometimes get it wrong. So, Justus and his company wanted to create a better way to get buyers from property A into property B.

                                                             They spent time building the idea and even had some of Australia’s biggest real estate companies backing them. In the beginning, the company was working and managed to transact around 40 properties.

                                                             But it was a tough time in Australia’s real estate market, so Justus ran into many issues. One particular issue was timing. The market was going down, so they had to buy properties, try to improve them, and sell them quickly.

                                                             They also ran into the problem of not being aggressive enough on the buying side, so they couldn’t get many properties. Still, they made money on about 60 or 70% of their properties. But they also had a couple that really killed them.

                                                             Justus believed the market would improve, so they sat through it. The market kept dropping, and they started looking for other opportunities. They began to look closer into the numbers, the unit economics, and what had been working. They realized the model was working pretty well outside Australia.

                                                             His company decided to expand into Europe, but before they did, COVID hit. COVID changed the dynamics completely. Debt facility providers pulled back and refused to give them a loan. Their real estate partners decided to figure out the situation first, believing the market value would go down. The market turned out to be the opposite, and property prices doubled in the next 18 months.

                                                             Lessons learned

                                                             • What works in one asset class will not necessarily work in another.
                                                             • The real estate market dynamics are very different in the US, Europe, and Australia.
                                                             • You can’t have regrets in investing. You’ve got to take the good and the bad.
                                                             • There isn’t a single truth or strategy that works for everyone.
                                                             
                                                             

                                                             Andrew’s takeaways

                                                             • Timing matters, but you can never really know whether your timing is right until after.
                                                             • Transferring a business model doesn’t always work.
                                                             • Investing is going to be a roller coaster, no matter what. It’s really a matter of holding on through the tough times.
                                                             
                                                             

                                                             Actionable advice

                                                             Justus underscores the value of pursuing activities that provide non-monetary benefits. He advises finding a balance between doing what you’re good at and what brings you joy. This advice serves as a guiding light, helping the audience navigate the complex terrain of work-life balance and personal fulfillment.

                                                             Justus’s recommendations

                                                             Justus recommends reading Atomic Habits to find structure and make your life easier. He also recommends The Subtle Art of Not Giving a F*ck if you want to focus on what matters and reducing suffering.

                                                             No.1 goal for the next 12 months

                                                             Justus’s number one goal for the next 12 months is to get Mad Paws to a better position and to invest in cash-flow businesses.

                                                             Parting words

                                                              

                                                             “You’ve got to take some risk, but ensure you measure it as much as possible.”

                                                             Justus Hammer

                                                              

                                                             [spp-transcript]

                                                              

                                                             Connect with Justus Hammer

                                                             • LinkedIn
                                                             
                                                             

                                                             Andrew’s books

                                                             • How to Start Building Your Wealth Investing in the Stock Market
                                                             • My Worst Investment Ever
                                                             • 9 Valuation Mistakes and How to Avoid Them
                                                             • Transform Your Business with Dr.Deming’s 14 Points
                                                             
                                                             

                                                             Andrew’s online programs

                                                             • Valuation Master Class
                                                             • The Become a Better Investor Community
                                                             • How to Start Building Your Wealth Investing in the Stock Market
                                                             • Finance Made Ridiculously Simple
                                                             • FVMR Investing: Quantamental Investing Across the World
                                                             • Become a Great Presenter and Increase Your Influence
                                                             • Transform Your Business with Dr. Deming’s 14 Points
                                                             • Achieve Your Goals
                                                             
                                                             

                                                             Connect with Andrew Stotz:

                                                             • astotz.com
                                                             • LinkedIn
                                                             • Facebook
                                                             • Instagram
                                                             • Threads
                                                             • Twitter
                                                             • YouTube
                                                             • My Worst Investment Ever Podcast
                                                             
                                                             ]]>79cebf5d-9c94-4de2-ae52-26d0fca2f869Tue, 23 Jul 2024 06:00:00 +070038:41falsefullEnrich Your Future 06: Market Efficiency and the Case of Pete RoseIn this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 06: Market Efficiency and the Case of Pete Rose.

                                                             LEARNING: Don’t try to pick stocks or time the market.

                                                              

                                                             “The evidence is very clear. The stocks retail investors buy underperform after they buy them, and the stocks they sell go on to outperform.”

                                                             Larry Swedroe

                                                              

                                                             In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over the 30 years to help investors as the head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                             Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 06: Market Efficiency and the Case of Pete Rose.

                                                             Chapter 06: Market Efficiency and the Case of Pete Rose

                                                             Many people have difficulty understanding why smart investors working hard cannot gain an advantage over average investors who simply accept market returns. In this chapter, Larry uses an analogy in the world of sports betting to explain why the “collective wisdom of the market” is a difficult competitor.

                                                             The case of Pete Rose

                                                             Pete Rose was one of the greatest players in the history of baseball, finishing his career with more hits than any other player. It seems logical that Rose would have a significant advantage over other baseball bettors.

                                                             Rose had 24 years of experience as a player and four years as a manager. In addition to having inside information on his own team, as a manager, he also studied the teams he competed against. Yet, despite these advantages, Rose lost $4,200 betting on his own team, $36,000 betting on other teams in the National League, and $7,000 betting on American League games.

                                                             This reveals that if an expert like Rose, who had access to private information, could not “beat the market,” then it’s very unlikely that ordinary individuals without similar knowledge would be able to do so.

                                                             Sports betting market efficiency

                                                             Larry shares other examples of the efficiency of sports betting markets. One such example is a study covering six NBA seasons in which Professor Raymond Sauer found that the average difference between point spreads and actual point differences was astonishingly low—less than one-quarter of one point.

                                                             In horse racing, the final odds, which reflect the judgment of all bettors, reliably predict the outcome—the favorite wins most often, the second favorite is next most likely to win, and so on. This predictability of the market further emphasizes the futility of trying to exploit mispricings and the need for a more reliable investment strategy.

                                                             Larry goes on to quote James Surowiecki, author of “The Wisdom of Crowds,” who demonstrated that as long as people are acting independently (not in herds), they exhibit what might be called “collective wisdom.” With regard to sports betting, that means the market’s collective wisdom in setting point spreads (or odds) is tough competition to overcome, especially after the expenses of the effort. Larry advises sports bettors to have a small entertainment account to bet on their favorite team and not to invest their entire retirement account. The same holds true of investing.

                                                             The market’s collective wisdom in setting prices is a difficult competition to overcome, especially after the expenses of the effort. Recognizing this, prudent investors don’t attempt to beat the market by trying to exploit mispricings. Instead, they invest in a globally diversified portfolio of funds (such as index funds) that invest systematically and do so in a transparent and replicable manner. In that way, they earn market returns and do so in a highly tax-efficient manner. And the evidence demonstrates that they outperform the vast majority of investors —institutional and individual.

                                                             No retail investors to exploit

                                                             The evidence is clear. On average, the stocks retail investors buy underperform after they buy them, and the stocks they sell outperform. The problem is there aren’t enough retail investors to exploit because they’re smart, talented, and have access to the best databases. But still, the market is too efficient, and the competition’s too tough.

                                                             Larry insists that retail investors shouldn’t try to pick stocks or time the market unless they have different information. This advice is crucial for investors, guiding them away from risky strategies and towards more reliable investment methods.

                                                             Further reading

                                                             1. Douglas Coate, “Market Efficiency in the Baseball Betting Market: The Case of Pete Rose,” Rutgers University Newark Working Paper 2008-003, January 2008.
                                                             2. Raymond D. Sauer, “The Economics of Wagering Markets,” Journal of Economic Literature, 36, p. 2021-64.
                                                             3. James Surowiecki, The Wisdom of Crowds (Doubleday, 2004).
                                                             
                                                             

                                                             Did you miss out on the previous chapters? Check them out:

                                                             • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                             • Enrich Your Future 02: How Markets Set Prices
                                                             • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                                             • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                                             • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                                             
                                                             

                                                             About Larry Swedroe

                                                             Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                             Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                             Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                             Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                              

                                                             [spp-transcript]

                                                              

                                                             Connect with Larry Swedroe

                                                             • LinkedIn
                                                             • Twitter
                                                             • Website
                                                             • Books
                                                             
                                                             

                                                             Andrew’s books

                                                             • How to Start Building Your Wealth Investing in the Stock Market
                                                             • In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 06: Market Efficiency and the Case of Pete Rose.

                                                               LEARNING: Don’t try to pick stocks or time the market.

                                                                

                                                               “The evidence is very clear. The stocks retail investors buy underperform after they buy them, and the stocks they sell go on to outperform.”

                                                               Larry Swedroe

                                                                

                                                               In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over the 30 years to help investors as the head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                               Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 06: Market Efficiency and the Case of Pete Rose.

                                                               Chapter 06: Market Efficiency and the Case of Pete Rose

                                                               Many people have difficulty understanding why smart investors working hard cannot gain an advantage over average investors who simply accept market returns. In this chapter, Larry uses an analogy in the world of sports betting to explain why the “collective wisdom of the market” is a difficult competitor.

                                                               The case of Pete Rose

                                                               Pete Rose was one of the greatest players in the history of baseball, finishing his career with more hits than any other player. It seems logical that Rose would have a significant advantage over other baseball bettors.

                                                               Rose had 24 years of experience as a player and four years as a manager. In addition to having inside information on his own team, as a manager, he also studied the teams he competed against. Yet, despite these advantages, Rose lost $4,200 betting on his own team, $36,000 betting on other teams in the National League, and $7,000 betting on American League games.

                                                               This reveals that if an expert like Rose, who had access to private information, could not “beat the market,” then it’s very unlikely that ordinary individuals without similar knowledge would be able to do so.

                                                               Sports betting market efficiency

                                                               Larry shares other examples of the efficiency of sports betting markets. One such example is a study covering six NBA seasons in which Professor Raymond Sauer found that the average difference between point spreads and actual point differences was astonishingly low—less than one-quarter of one point.

                                                               In horse racing, the final odds, which reflect the judgment of all bettors, reliably predict the outcome—the favorite wins most often, the second favorite is next most likely to win, and so on. This predictability of the market further emphasizes the futility of trying to exploit mispricings and the need for a more reliable investment strategy.

                                                               Larry goes on to quote James Surowiecki, author of “The Wisdom of Crowds,” who demonstrated that as long as people are acting independently (not in herds), they exhibit what might be called “collective wisdom.” With regard to sports betting, that means the market’s collective wisdom in setting point spreads (or odds) is tough competition to overcome, especially after the expenses of the effort. Larry advises sports bettors to have a small entertainment account to bet on their favorite team and not to invest their entire retirement account. The same holds true of investing.

                                                               The market’s collective wisdom in setting prices is a difficult competition to overcome, especially after the expenses of the effort. Recognizing this, prudent investors don’t attempt to beat the market by trying to exploit mispricings. Instead, they invest in a globally diversified portfolio of funds (such as index funds) that invest systematically and do so in a transparent and replicable manner. In that way, they earn market returns and do so in a highly tax-efficient manner. And the evidence demonstrates that they outperform the vast majority of investors —institutional and individual.

                                                               No retail investors to exploit

                                                               The evidence is clear. On average, the stocks retail investors buy underperform after they buy them, and the stocks they sell outperform. The problem is there aren’t enough retail investors to exploit because they’re smart, talented, and have access to the best databases. But still, the market is too efficient, and the competition’s too tough.

                                                               Larry insists that retail investors shouldn’t try to pick stocks or time the market unless they have different information. This advice is crucial for investors, guiding them away from risky strategies and towards more reliable investment methods.

                                                               Further reading

                                                               1. Douglas Coate, “Market Efficiency in the Baseball Betting Market: The Case of Pete Rose,” Rutgers University Newark Working Paper 2008-003, January 2008.
                                                               2. Raymond D. Sauer, “The Economics of Wagering Markets,” Journal of Economic Literature, 36, p. 2021-64.
                                                               3. James Surowiecki, The Wisdom of Crowds (Doubleday, 2004).
                                                               
                                                               

                                                               Did you miss out on the previous chapters? Check them out:

                                                               • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                               • Enrich Your Future 02: How Markets Set Prices
                                                               • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                                               • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                                               • Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
                                                               
                                                               

                                                               About Larry Swedroe

                                                               Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                               Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                               Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                               Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                

                                                               [spp-transcript]

                                                                

                                                               Connect with Larry Swedroe

                                                               • LinkedIn
                                                               • Twitter
                                                               • Website
                                                               • Books
                                                               
                                                               

                                                               Andrew’s books

                                                               • How to Start Building Your Wealth Investing in the Stock Market
                                                               • My Worst Investment Ever
                                                               • 9 Valuation Mistakes and How to Avoid Them
                                                               • Transform Your Business with Dr.Deming’s 14 Points
                                                               
                                                               

                                                               Andrew’s online programs

                                                               • Valuation Master Class
                                                               • The Become a Better Investor Community
                                                               • How to Start Building Your Wealth Investing in the Stock Market
                                                               • Finance Made Ridiculously Simple
                                                               • FVMR Investing: Quantamental Investing Across the World
                                                               • Become a Great Presenter and Increase Your Influence
                                                               • Transform Your Business with Dr. Deming’s 14 Points
                                                               • Achieve Your Goals
                                                               
                                                               

                                                               Connect with Andrew Stotz:

                                                               • astotz.com
                                                               • LinkedIn
                                                               • Facebook
                                                               • Instagram
                                                               • Threads
                                                               • Twitter
                                                               • YouTube
                                                               • My Worst Investment Ever Podcast
                                                               
                                                               ]]>bccf06d8-e5c9-4e32-83be-cb97cfbce279Tue, 16 Jul 2024 06:00:00 +070033:13falsefullEnrich Your Future 05: Great Companies Do Not Make High-Return InvestmentsIn this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 05: Great Companies Do Not Make High-Return Investments.

                                                               LEARNING:  A higher PE doesn’t mean a higher expected return.

                                                                

                                                               “A higher PE doesn’t mean a higher expected return. It may mean that you’re paying a high price for high expected growth and safety because the company is really strong.”

                                                               Larry Swedroe

                                                                

                                                               In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over the 30 years or so that he’s been trying to help investors. Larry is the head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                               Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 05: Great Companies Do Not Make High-Return Investments

                                                               Chapter 05: Great Companies Do Not Make High-Return Investments

                                                               In this chapter, Larry explains why investing in great companies doesn’t guarantee high returns.

                                                               When faced with the choice of buying the stocks of “great” companies or buying the stocks of “lousy” companies, Larry says most investors would instinctively choose the former.

                                                               This is an anomaly because people think the whole idea of investing is to identify a great company and, therefore, will get great returns. But if you understand finance, that doesn’t make any sense because the first basic rule of investing is that something you know is only information; it’s not value-added information unless the market doesn’t know it. This is because that information is already embedded in the price through the trading actions of all marketplace investors.

                                                               Small companies versus large companies

                                                               According to Larry, if it were true that markets provide returns commensurate with the amount of risk taken, one should expect great results if they invest in a passively managed portfolio consisting of small companies, which are intuitively riskier than large companies.

                                                               Small companies don’t have the economies of scale that large companies have, making them generally less efficient. They typically have weaker balance sheets and fewer sources of capital. When there is distress in the capital markets, smaller companies are generally the first to be cut off from access to capital, increasing the risk of bankruptcy. They don’t have the depth of management that larger companies do. They generally don’t have long track records from which investors can make judgments.

                                                               The cost of trading small stocks is much greater, increasing the risk of investing in them. When one compares the performance of the asset class of small companies with that of large companies, one gets the same results produced by the great companies versus value companies comparison.

                                                               Why great earnings don’t necessarily translate into great investment returns

                                                               The simple explanation for why great earnings don’t necessarily translate into great investment returns is that investors discount the future expected earnings of value stocks at a higher rate than they discount the future expected earnings of growth stocks. This more than offsets the faster earnings growth rates of growth companies. The high discount rate results in low current valuations for value stocks and higher expected future returns relative to growth stocks.

                                                               Risk versus expected return

                                                               Larry talks of a simple principle that can help you avoid making poor investment decisions: Risk and expected return should be positively related. Value stocks have provided a premium over growth stocks for a logical reason: Value stocks are the stocks of riskier companies. That is why their stock prices are distressed. Investors refuse to buy them unless the prices are driven low enough so that they can expect to earn a rate of return that is high enough to compensate them for investing in risky companies. For similar reasons, small stocks have also provided a risk premium compared to large stocks.

                                                               Larry reminds investors that if prices are high, they reflect low perceived risk, and thus, they should expect low future returns and vice versa. This does not make a highly-priced stock a poor investment. It simply makes it an investment perceived to have low risk and, thus, low future returns. Thinking otherwise would be like assuming government bonds are poor investments when the alternative is junk bonds.

                                                               Larry advises investors not to engage in individual security selection. Instead, they should diversify and get the same risk-adjusted returns but with a much narrower dispersion of potential outcomes. Further, they should build a plan that incorporates the fact that when earnings yields are low, the investors expect low returns and adjust their asset allocation accordingly to make sure they have a good chance of achieving their investment goals when that’s the case. Larry also insists that if investors try to time the market, they should do it only at extremes and always remember that a higher PE doesn’t mean a higher expected return. The investor may be paying a high price for high expected growth and safety because the company is strong.

                                                               Did you miss out on the previous chapters? Check them out:

                                                               • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                               • Enrich Your Future 02: How Markets Set Prices
                                                               • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                                               • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                                               
                                                               

                                                               About Larry Swedroe

                                                               Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                               Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                               Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                               Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                

                                                               [spp-transcript]

                                                                

                                                               Connect with Larry Swedroe

                                                               • LinkedIn
                                                               • Twitter
                                                               • Website
                                                               • Books
                                                               
                                                               

                                                               Andrew’s books

                                                               • How to Start Building Your Wealth Investing in the Stock Market
                                                               • My Worst Investment Ever
                                                               • 9 Valuation Mistakes and How to Avoid Them
                                                               • Transform Your Business with Dr.Deming’s 14 Points
                                                               
                                                               

                                                               Andrew’s online programs

                                                               • Valuation Master Class
                                                               • In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 05: Great Companies Do Not Make High-Return Investments.

                                                                 LEARNING:  A higher PE doesn’t mean a higher expected return.

                                                                  

                                                                 “A higher PE doesn’t mean a higher expected return. It may mean that you’re paying a high price for high expected growth and safety because the company is really strong.”

                                                                 Larry Swedroe

                                                                  

                                                                 In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over the 30 years or so that he’s been trying to help investors. Larry is the head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                 Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 05: Great Companies Do Not Make High-Return Investments

                                                                 Chapter 05: Great Companies Do Not Make High-Return Investments

                                                                 In this chapter, Larry explains why investing in great companies doesn’t guarantee high returns.

                                                                 When faced with the choice of buying the stocks of “great” companies or buying the stocks of “lousy” companies, Larry says most investors would instinctively choose the former.

                                                                 This is an anomaly because people think the whole idea of investing is to identify a great company and, therefore, will get great returns. But if you understand finance, that doesn’t make any sense because the first basic rule of investing is that something you know is only information; it’s not value-added information unless the market doesn’t know it. This is because that information is already embedded in the price through the trading actions of all marketplace investors.

                                                                 Small companies versus large companies

                                                                 According to Larry, if it were true that markets provide returns commensurate with the amount of risk taken, one should expect great results if they invest in a passively managed portfolio consisting of small companies, which are intuitively riskier than large companies.

                                                                 Small companies don’t have the economies of scale that large companies have, making them generally less efficient. They typically have weaker balance sheets and fewer sources of capital. When there is distress in the capital markets, smaller companies are generally the first to be cut off from access to capital, increasing the risk of bankruptcy. They don’t have the depth of management that larger companies do. They generally don’t have long track records from which investors can make judgments.

                                                                 The cost of trading small stocks is much greater, increasing the risk of investing in them. When one compares the performance of the asset class of small companies with that of large companies, one gets the same results produced by the great companies versus value companies comparison.

                                                                 Why great earnings don’t necessarily translate into great investment returns

                                                                 The simple explanation for why great earnings don’t necessarily translate into great investment returns is that investors discount the future expected earnings of value stocks at a higher rate than they discount the future expected earnings of growth stocks. This more than offsets the faster earnings growth rates of growth companies. The high discount rate results in low current valuations for value stocks and higher expected future returns relative to growth stocks.

                                                                 Risk versus expected return

                                                                 Larry talks of a simple principle that can help you avoid making poor investment decisions: Risk and expected return should be positively related. Value stocks have provided a premium over growth stocks for a logical reason: Value stocks are the stocks of riskier companies. That is why their stock prices are distressed. Investors refuse to buy them unless the prices are driven low enough so that they can expect to earn a rate of return that is high enough to compensate them for investing in risky companies. For similar reasons, small stocks have also provided a risk premium compared to large stocks.

                                                                 Larry reminds investors that if prices are high, they reflect low perceived risk, and thus, they should expect low future returns and vice versa. This does not make a highly-priced stock a poor investment. It simply makes it an investment perceived to have low risk and, thus, low future returns. Thinking otherwise would be like assuming government bonds are poor investments when the alternative is junk bonds.

                                                                 Larry advises investors not to engage in individual security selection. Instead, they should diversify and get the same risk-adjusted returns but with a much narrower dispersion of potential outcomes. Further, they should build a plan that incorporates the fact that when earnings yields are low, the investors expect low returns and adjust their asset allocation accordingly to make sure they have a good chance of achieving their investment goals when that’s the case. Larry also insists that if investors try to time the market, they should do it only at extremes and always remember that a higher PE doesn’t mean a higher expected return. The investor may be paying a high price for high expected growth and safety because the company is strong.

                                                                 Did you miss out on the previous chapters? Check them out:

                                                                 • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                                 • Enrich Your Future 02: How Markets Set Prices
                                                                 • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                                                 • Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
                                                                 
                                                                 

                                                                 About Larry Swedroe

                                                                 Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                 Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                 Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                 Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                  

                                                                 [spp-transcript]

                                                                  

                                                                 Connect with Larry Swedroe

                                                                 • LinkedIn
                                                                 • Twitter
                                                                 • Website
                                                                 • Books
                                                                 
                                                                 

                                                                 Andrew’s books

                                                                 • How to Start Building Your Wealth Investing in the Stock Market
                                                                 • My Worst Investment Ever
                                                                 • 9 Valuation Mistakes and How to Avoid Them
                                                                 • Transform Your Business with Dr.Deming’s 14 Points
                                                                 
                                                                 

                                                                 Andrew’s online programs

                                                                 • Valuation Master Class
                                                                 • The Become a Better Investor Community
                                                                 • How to Start Building Your Wealth Investing in the Stock Market
                                                                 • Finance Made Ridiculously Simple
                                                                 • FVMR Investing: Quantamental Investing Across the World
                                                                 • Become a Great Presenter and Increase Your Influence
                                                                 • Transform Your Business with Dr. Deming’s 14 Points
                                                                 • Achieve Your Goals
                                                                 
                                                                 

                                                                 Connect with Andrew Stotz:

                                                                 • astotz.com
                                                                 • LinkedIn
                                                                 • Facebook
                                                                 • Instagram
                                                                 • Threads
                                                                 • Twitter
                                                                 • YouTube
                                                                 • My Worst Investment Ever Podcast
                                                                 
                                                                 ]]>05fc898d-933a-4817-91c0-49ff25e1ed2aTue, 09 Jul 2024 06:00:00 +070027:22falsefullEnrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 04: Why Is Persistent Outperformance So Hard to Find?

                                                                 LEARNING:  Focus on building a robust asset allocation plan, regularly rebalancing it, and stick with it.

                                                                  

                                                                 “Investors should just build an asset allocation plan, rebalance, and stick with it. So, when there’s a bubble, take advantage of it and sell some stock high to buy those that haven’t performed.”

                                                                 Larry Swedroe

                                                                  

                                                                 In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over the 30 years or so that he’s been trying to help investors. Larry is the head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                 Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 04: Why Is Persistent Outperformance So Hard to Find?

                                                                 Chapter 04: Why Is Persistent Outperformance So Hard to Find?

                                                                 In this chapter, Larry explains why persistent outperformance beyond the randomly expected is so hard to find.

                                                                 According to Larry, the equivalent of the Holy Grail is finding the formula that allows many investors to time the market successfully. For others, it is finding the fund manager who can exploit market mispricings by buying undervalued stocks and perhaps shorting overvalued ones. However, markets are very highly efficient. An efficient market means that the price is the best estimate investors have of the right price. They don’t know the right price until after the fact.

                                                                 The efficiency of the markets and the evidence of the effects of scale on trading costs explain why persistent outperformance beyond the randomly expected is so hard to find. Thus, the search by investors for persistent outperformance is likely to prove as successful as Sir Galahad’s search for the Holy Grail.

                                                                 Larry adds that the only place we find the persistence of performance (beyond that which we would randomly expect) is at the very bottom—poorly performing funds tend to repeat. And the persistence of poor performance is not due to poor stock selection. Instead, it is due to high expenses.

                                                                 The efficient market hypothesis

                                                                 Larry says the efficient market hypothesis (EMH) explains why all investors should expect a lack of persistence. It states that it is only by random good luck that a fund can persistently outperform after the expenses of its efforts. But there is also a practical reason for the lack of persistence: Successful active management sows the seeds of its own destruction.

                                                                 Just as the EMH explains why investors cannot use publicly available information to beat the market (because all investors have access to that information, and it is therefore already embedded in prices), the same is true of active managers. Investors should not expect to outperform the market by using publicly available information to select active managers. Any excess return will go to the active manager (in the form of higher expenses).

                                                                 Instead of fruitlessly chasing outperformance, Larry advocates for a more strategic approach. He advises investors to focus on building a robust asset allocation plan, regularly rebalancing it, and, most importantly, sticking with it. This approach helps investors take advantage of market bubbles and ensures they are well-positioned to buy stocks that haven’t performed well, thereby promoting a more balanced and sustainable investment strategy.

                                                                 Further reading

                                                                 1. Amit Goyal and Sunil Wahal, “The Selection and Termination of Investment Management Firms by Plan Sponsors,” Journal of Finance (July 2008).
                                                                 2. Jonathan B. Berk, “Five Myths of Active Portfolio Management.”
                                                                 3. Roger Edelen, Richard Evans, and Gregory B. Kadlec, “Scale Effects in Mutual Fund performance: The Role of Trading Costs,” March 17, 2007.
                                                                 
                                                                 

                                                                 Did you miss out on the previous chapters? Check them out:

                                                                 • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                                 • Enrich Your Future 02: How Markets Set Prices
                                                                 • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                                                 
                                                                 

                                                                 About Larry Swedroe

                                                                 Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                 Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                 Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                 Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                  

                                                                 [spp-transcript]

                                                                  

                                                                 Connect with Larry Swedroe

                                                                 • LinkedIn
                                                                 • Twitter
                                                                 • Website
                                                                 • Books
                                                                 
                                                                 

                                                                 Andrew’s books

                                                                 • How to Start Building Your Wealth Investing in the Stock Market
                                                                 • My Worst Investment Ever
                                                                 • 9 Valuation Mistakes and How to Avoid Them
                                                                 • Transform Your Business with Dr.Deming’s 14 Points
                                                                 
                                                                 

                                                                 Andrew’s online programs

                                                                 • Valuation Master Class
                                                                 • The Become a Better Investor Community
                                                                 • How to Start Building Your Wealth Investing in the Stock Market
                                                                 • Finance Made Ridiculously Simple
                                                                 • FVMR Investing: Quantamental Investing Across the World
                                                                 • Become a Great Presenter and Increase Your Influence
                                                                 • In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 04: Why Is Persistent Outperformance So Hard to Find?

                                                                   LEARNING:  Focus on building a robust asset allocation plan, regularly rebalancing it, and stick with it.

                                                                    

                                                                   “Investors should just build an asset allocation plan, rebalance, and stick with it. So, when there’s a bubble, take advantage of it and sell some stock high to buy those that haven’t performed.”

                                                                   Larry Swedroe

                                                                    

                                                                   In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over the 30 years or so that he’s been trying to help investors. Larry is the head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                   Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 04: Why Is Persistent Outperformance So Hard to Find?

                                                                   Chapter 04: Why Is Persistent Outperformance So Hard to Find?

                                                                   In this chapter, Larry explains why persistent outperformance beyond the randomly expected is so hard to find.

                                                                   According to Larry, the equivalent of the Holy Grail is finding the formula that allows many investors to time the market successfully. For others, it is finding the fund manager who can exploit market mispricings by buying undervalued stocks and perhaps shorting overvalued ones. However, markets are very highly efficient. An efficient market means that the price is the best estimate investors have of the right price. They don’t know the right price until after the fact.

                                                                   The efficiency of the markets and the evidence of the effects of scale on trading costs explain why persistent outperformance beyond the randomly expected is so hard to find. Thus, the search by investors for persistent outperformance is likely to prove as successful as Sir Galahad’s search for the Holy Grail.

                                                                   Larry adds that the only place we find the persistence of performance (beyond that which we would randomly expect) is at the very bottom—poorly performing funds tend to repeat. And the persistence of poor performance is not due to poor stock selection. Instead, it is due to high expenses.

                                                                   The efficient market hypothesis

                                                                   Larry says the efficient market hypothesis (EMH) explains why all investors should expect a lack of persistence. It states that it is only by random good luck that a fund can persistently outperform after the expenses of its efforts. But there is also a practical reason for the lack of persistence: Successful active management sows the seeds of its own destruction.

                                                                   Just as the EMH explains why investors cannot use publicly available information to beat the market (because all investors have access to that information, and it is therefore already embedded in prices), the same is true of active managers. Investors should not expect to outperform the market by using publicly available information to select active managers. Any excess return will go to the active manager (in the form of higher expenses).

                                                                   Instead of fruitlessly chasing outperformance, Larry advocates for a more strategic approach. He advises investors to focus on building a robust asset allocation plan, regularly rebalancing it, and, most importantly, sticking with it. This approach helps investors take advantage of market bubbles and ensures they are well-positioned to buy stocks that haven’t performed well, thereby promoting a more balanced and sustainable investment strategy.

                                                                   Further reading

                                                                   1. Amit Goyal and Sunil Wahal, “The Selection and Termination of Investment Management Firms by Plan Sponsors,” Journal of Finance (July 2008).
                                                                   2. Jonathan B. Berk, “Five Myths of Active Portfolio Management.”
                                                                   3. Roger Edelen, Richard Evans, and Gregory B. Kadlec, “Scale Effects in Mutual Fund performance: The Role of Trading Costs,” March 17, 2007.
                                                                   
                                                                   

                                                                   Did you miss out on the previous chapters? Check them out:

                                                                   • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                                   • Enrich Your Future 02: How Markets Set Prices
                                                                   • Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
                                                                   
                                                                   

                                                                   About Larry Swedroe

                                                                   Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                   Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                   Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                   Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                    

                                                                   [spp-transcript]

                                                                    

                                                                   Connect with Larry Swedroe

                                                                   • LinkedIn
                                                                   • Twitter
                                                                   • Website
                                                                   • Books
                                                                   
                                                                   

                                                                   Andrew’s books

                                                                   • How to Start Building Your Wealth Investing in the Stock Market
                                                                   • My Worst Investment Ever
                                                                   • 9 Valuation Mistakes and How to Avoid Them
                                                                   • Transform Your Business with Dr.Deming’s 14 Points
                                                                   
                                                                   

                                                                   Andrew’s online programs

                                                                   • Valuation Master Class
                                                                   • The Become a Better Investor Community
                                                                   • How to Start Building Your Wealth Investing in the Stock Market
                                                                   • Finance Made Ridiculously Simple
                                                                   • FVMR Investing: Quantamental Investing Across the World
                                                                   • Become a Great Presenter and Increase Your Influence
                                                                   • Transform Your Business with Dr. Deming’s 14 Points
                                                                   • Achieve Your Goals
                                                                   
                                                                   

                                                                   Connect with Andrew Stotz:

                                                                   • astotz.com
                                                                   • LinkedIn
                                                                   • Facebook
                                                                   • Instagram
                                                                   • Threads
                                                                   • Twitter
                                                                   • YouTube
                                                                   • My Worst Investment Ever Podcast
                                                                   
                                                                   ]]>e2914528-5f33-459f-a029-b40ba47b7a55Tue, 02 Jul 2024 06:00:00 +070022:53falsefullEnrich Your Future 03: Persistence of Performance: Athletes Versus Investment ManagersIn this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 03: Persistence of Performance: Athletes Versus Investment Managers.

                                                                   LEARNING:  The nature of the competition in the investment arena is so different that conventional wisdom does not apply. What works in one paradigm does not necessarily work in another.

                                                                    

                                                                   “Active managers fail with great persistence not because they’re dumb, it’s just that they have a burden of costs, which makes it very difficult for them to outperform and overcome those costs.”

                                                                   Larry Swedroe

                                                                    

                                                                   In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over the 30 years or so that he’s been trying to help investors. Larry is the head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                   Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 03: Persistence of Performance: Athletes Versus Investment Managers.

                                                                   Chapter 03: Persistence of Performance: Athletes Versus Investment Managers

                                                                   In this chapter, Larry expounds on why we do not see the persistence of the outperformance of investment managers. He also tries to help investors understand how securities markets set prices.

                                                                   Skills versus luck

                                                                   One of the most strongly held beliefs is that successful people succeed not through luck but through the skill of persistence over time. So, people assume that successful active managers must also result from this skill, not just luck. Larry explains that while this may be true for athletes where competition is one-on-one, it is not the case when it comes to investing.

                                                                   According to Dr. Mark Rubinstein, competition for an investment manager is not other individual investment managers but rather the market’s collective wisdom. Further, Rex Sinquefield states that just because there are some investors smarter than others, that advantage will not show up. The market is too vast and too informationally efficient. Many people fail to comprehend that in many forms of competition, such as chess, poker, or investing, the relative skill level plays the more critical role in determining outcomes, not the absolute level. The “paradox of skill” means that even as skill level rises, luck can become more crucial in determining outcomes if the level of competition also increases.

                                                                   The cost of outperformance

                                                                   When it comes to outperforming the market, Larry cautions that investment managers are not engaged in a zero-sum game. In pursuing market-beating returns, they face significantly higher expenses than passive investors. These costs, which include research expenses, other fund operating expenses, bid-offer spreads, commissions, market impact costs, and taxes, can pose significant financial risks. Investors must be aware of these potential pitfalls and factor them into their investment strategies.

                                                                   According to Larry, small-cap stocks tend to outperform large stocks in the long term. This performance isn’t a size effect but a merger effect. Active managers fail with remarkable persistence in emerging markets because there are costs to exploit market inefficiencies, and the more inefficient the market is, the more the implementation costs.

                                                                   Why conventional wisdom doesn’t apply in investing

                                                                   In conclusion, Larry states that conventional wisdom states that past performance is a good predictor of future performance. It is conventional wisdom because it holds true in most endeavors, be it a sporting event or any other form of competition. The problem for investors who believe in conventional wisdom is that the nature of the competition in the investment arena is so different that conventional wisdom does not apply. What works in one paradigm does not necessarily work in another. Peter Bernstein said, “In the real world, investors seem to have great difficulty outperforming one another in any convincing or consistent fashion. Today’s hero is often tomorrow’s blockhead.”

                                                                   Further reading

                                                                   1. Dr. Mark Rubinstein, “Rational Markets: Yes or No? The Affirmative Case,” Financial Analysts Journal (May-June 2001).
                                                                   2. Ron Ross, The Unbeatable Market (Optimum Press, 2002).
                                                                   3. Raymond Fazzi, “Going Their Own Way,” Financial Advisor (March 2001).
                                                                   4. Tim Riley, “Can Mutual Fund Stars Still Pick Stocks?: A Replication and Extension of Kosowski, Timmermann, Wermers, and White (2006).” January 2019.
                                                                   5. Robert Kosowski, Allan Timmermann, Russ Wermers and Hal White, “Can Mutual Fund ‘Stars’ Really Pick Stocks? New Evidence from a Bootstrap Analysis, Journal of Finance (December 2006)
                                                                   6. Ralph Wanger, A Zebra in Lion Country (Simon & Schuster, 1997).
                                                                   7. Peter Bernstein, Against the Gods (Wiley, 1996).
                                                                   
                                                                   

                                                                   Did you miss out on the previous chapters? Check them out:

                                                                   • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                                   • Enrich Your Future 02: How Markets Set Prices
                                                                   
                                                                   

                                                                   About Larry Swedroe

                                                                   Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                   Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                   Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                   Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                    

                                                                   [spp-transcript]

                                                                    

                                                                   Connect with Larry Swedroe

                                                                   • LinkedIn
                                                                   • Twitter
                                                                   • Website
                                                                   • Books
                                                                   
                                                                   

                                                                   Andrew’s books

                                                                   • How to Start Building Your Wealth Investing in the Stock Market
                                                                   • My Worst Investment Ever
                                                                   • 9 Valuation Mistakes and How to Avoid Them
                                                                   • Transform Your Business with Dr.Deming’s 14 Points
                                                                   
                                                                   

                                                                   Andrew’s online programs

                                                                   • In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 03: Persistence of Performance: Athletes Versus Investment Managers.

                                                                     LEARNING:  The nature of the competition in the investment arena is so different that conventional wisdom does not apply. What works in one paradigm does not necessarily work in another.

                                                                      

                                                                     “Active managers fail with great persistence not because they’re dumb, it’s just that they have a burden of costs, which makes it very difficult for them to outperform and overcome those costs.”

                                                                     Larry Swedroe

                                                                      

                                                                     In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over the 30 years or so that he’s been trying to help investors. Larry is the head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                     Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 03: Persistence of Performance: Athletes Versus Investment Managers.

                                                                     Chapter 03: Persistence of Performance: Athletes Versus Investment Managers

                                                                     In this chapter, Larry expounds on why we do not see the persistence of the outperformance of investment managers. He also tries to help investors understand how securities markets set prices.

                                                                     Skills versus luck

                                                                     One of the most strongly held beliefs is that successful people succeed not through luck but through the skill of persistence over time. So, people assume that successful active managers must also result from this skill, not just luck. Larry explains that while this may be true for athletes where competition is one-on-one, it is not the case when it comes to investing.

                                                                     According to Dr. Mark Rubinstein, competition for an investment manager is not other individual investment managers but rather the market’s collective wisdom. Further, Rex Sinquefield states that just because there are some investors smarter than others, that advantage will not show up. The market is too vast and too informationally efficient. Many people fail to comprehend that in many forms of competition, such as chess, poker, or investing, the relative skill level plays the more critical role in determining outcomes, not the absolute level. The “paradox of skill” means that even as skill level rises, luck can become more crucial in determining outcomes if the level of competition also increases.

                                                                     The cost of outperformance

                                                                     When it comes to outperforming the market, Larry cautions that investment managers are not engaged in a zero-sum game. In pursuing market-beating returns, they face significantly higher expenses than passive investors. These costs, which include research expenses, other fund operating expenses, bid-offer spreads, commissions, market impact costs, and taxes, can pose significant financial risks. Investors must be aware of these potential pitfalls and factor them into their investment strategies.

                                                                     According to Larry, small-cap stocks tend to outperform large stocks in the long term. This performance isn’t a size effect but a merger effect. Active managers fail with remarkable persistence in emerging markets because there are costs to exploit market inefficiencies, and the more inefficient the market is, the more the implementation costs.

                                                                     Why conventional wisdom doesn’t apply in investing

                                                                     In conclusion, Larry states that conventional wisdom states that past performance is a good predictor of future performance. It is conventional wisdom because it holds true in most endeavors, be it a sporting event or any other form of competition. The problem for investors who believe in conventional wisdom is that the nature of the competition in the investment arena is so different that conventional wisdom does not apply. What works in one paradigm does not necessarily work in another. Peter Bernstein said, “In the real world, investors seem to have great difficulty outperforming one another in any convincing or consistent fashion. Today’s hero is often tomorrow’s blockhead.”

                                                                     Further reading

                                                                     1. Dr. Mark Rubinstein, “Rational Markets: Yes or No? The Affirmative Case,” Financial Analysts Journal (May-June 2001).
                                                                     2. Ron Ross, The Unbeatable Market (Optimum Press, 2002).
                                                                     3. Raymond Fazzi, “Going Their Own Way,” Financial Advisor (March 2001).
                                                                     4. Tim Riley, “Can Mutual Fund Stars Still Pick Stocks?: A Replication and Extension of Kosowski, Timmermann, Wermers, and White (2006).” January 2019.
                                                                     5. Robert Kosowski, Allan Timmermann, Russ Wermers and Hal White, “Can Mutual Fund ‘Stars’ Really Pick Stocks? New Evidence from a Bootstrap Analysis, Journal of Finance (December 2006)
                                                                     6. Ralph Wanger, A Zebra in Lion Country (Simon & Schuster, 1997).
                                                                     7. Peter Bernstein, Against the Gods (Wiley, 1996).
                                                                     
                                                                     

                                                                     Did you miss out on the previous chapters? Check them out:

                                                                     • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                                     • Enrich Your Future 02: How Markets Set Prices
                                                                     
                                                                     

                                                                     About Larry Swedroe

                                                                     Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                     Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                     Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                     Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                      

                                                                     [spp-transcript]

                                                                      

                                                                     Connect with Larry Swedroe

                                                                     • LinkedIn
                                                                     • Twitter
                                                                     • Website
                                                                     • Books
                                                                     
                                                                     

                                                                     Andrew’s books

                                                                     • How to Start Building Your Wealth Investing in the Stock Market
                                                                     • My Worst Investment Ever
                                                                     • 9 Valuation Mistakes and How to Avoid Them
                                                                     • Transform Your Business with Dr.Deming’s 14 Points
                                                                     
                                                                     

                                                                     Andrew’s online programs

                                                                     • Valuation Master Class
                                                                     • The Become a Better Investor Community
                                                                     • How to Start Building Your Wealth Investing in the Stock Market
                                                                     • Finance Made Ridiculously Simple
                                                                     • FVMR Investing: Quantamental Investing Across the World
                                                                     • Become a Great Presenter and Increase Your Influence
                                                                     • Transform Your Business with Dr. Deming’s 14 Points
                                                                     • Achieve Your Goals
                                                                     
                                                                     

                                                                     Connect with Andrew Stotz:

                                                                     • astotz.com
                                                                     • LinkedIn
                                                                     • Facebook
                                                                     • Instagram
                                                                     • Twitter
                                                                     • YouTube
                                                                     • My Worst Investment Ever Podcast
                                                                     
                                                                     ]]>ed90887a-c1fd-41cb-8a64-859899e1bce4Tue, 25 Jun 2024 06:00:00 +070029:25falsefullEnrich Your Future 02: How Markets Set PricesIn this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 02: How Markets Set Prices.

                                                                     LEARNING: Invest in passively managed funds and adopt a simple buy, hold, and rebalance strategy. While gamblers make bets, investors let the markets work for them, not against them.

                                                                      

                                                                     “The only way to beat an efficient market is to either know something the market doesn’t—such as the fact that a team’s best player is injured and will not be able to play—or to be able to interpret information about the teams better than the market (other gamblers collectively) does.”

                                                                     Larry Swedroe

                                                                      

                                                                     In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over the 30 years or so that he’s been trying to help investors. Larry is the head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                     Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 02: How Markets Set Prices.

                                                                     Chapter 02: How Markets Set Prices

                                                                     In this chapter, Larry explains how markets set prices—probably the most important thing investors need to learn before they invest a penny. Without this knowledge, investors won’t know whether the stock they buy is undervalued or overvalued. Larry insists that investors should have a good understanding of how the market gets to a specific price.

                                                                     Point spread betting

                                                                     To explain the complicated concept of how markets set prices, Larry uses an analogy related to college basketball backed up by academic research. Duke is a perennial contender for the national championship. Every year, it’s ranked in the top 25. At the start of every season, most college teams that are good try to schedule a few of what are called “cupcake” games to give their players a chance to get in the routine, learn the plays, get to know each other, etc., before they meet tougher competition.

                                                                     Duke often scheduled a game against Army. Army traveled down every year to Duke, where they would get a big payday, and Duke would have an easy win. No one in their right mind would bet on Army to win that game because they have played probably 30-40 times already, and Duke has won every game. And they could play another 30 or 40 times and win every game. However, people decide to entice others to bet on Army.

                                                                     To make it an equal bet, they create a point spread. The bookies set the initial point spread where they think they can get an equal amount of money bet on both sides. The bookies do their analysis and set the initial spread, but they don’t set the actual spread, which is determined by the betters in their actions. So if a lot of money starts coming in betting on Duke, the bookies will raise the spread until money starts coming in on Army until they get an equal amount of money. Then, the winner has to put up $110 to win $100. If they win, you get their $110 back and the bookies’s $100. But if you lose, you lose $110, not $100. So the bookies collect that $10 on the total of $200. So, what happens is that the point spread is moving based on the collective wisdom of the markets.

                                                                     It’s very easy to determine whether Duke is going to win or not. But it’s tough to beat that point spread. Very rarely does the point spread predict the actual outcome. However, it is an unbiased estimator of the outcome. An “unbiased estimator” is a statistic that is, on average, neither too high nor too low. Evidence from a study covering six NBA seasons shows that the average error was less than one-quarter of one point. So, there’s no way to exploit that information.

                                                                     In terms of investing, Larry gives an example of when you want to buy a stock (making a bet on the company), you have to buy it from someone. A stockbroker will not sell that stock to you because he might lose money. Instead, they find someone who wants to sell the stock and match the buyer with the seller. He is taking bets, not making bets. In the process, he earns the vigorish (a commission). Like stockbrokers, bookies want to take bets, not make them. Thus, they set the initial point spread at the “price” they believe will balance the forces of supply and demand (the point at which an equal amount of money will be bet on Duke and Army).

                                                                     How to beat an efficient market

                                                                     A market in which it is difficult to persistently exploit mispricing after the expenses of the effort is called an “efficient” market. According to Larry, the only way to beat an efficient market is to either know something the market doesn’t—such as the fact that a team’s best player is injured and will not be able to play—or to be able to interpret information about the teams better than the market (other gamblers collectively) does.

                                                                     The existence of an efficient public market in which the knowledge of all bettors (investors) is used to set prices protects the less informed bettors (investors) from being exploited. On the other hand, the existence of an efficient market prevents the sophisticated and more knowledgeable bettors (investors) from exploiting their less knowledgeable counterparts.

                                                                     Since about 90 percent of all trading is done by large institutional traders, these sophisticated investors are setting prices, not amateur individual investors. The competition is undoubtedly tougher, with professionals (instead of amateurs) dominating the market. Every time an individual buys a stock, he should consider that he is competing with these giant institutional investors. The individual investor should also acknowledge that institutions have more resources, and thus, they will likely succeed.

                                                                     However, study after study demonstrates that the majority of individual and institutional investors who attempt to beat the market by either picking stocks or timing the market fail miserably, and they do so with great persistence.

                                                                     A study by University of California professors Brad Barber and Terrance Odean found that the stocks individual investors buy underperform the market after they buy them, and the stocks they sell outperform after they sell them. They also found that male investors underperform the market by about 3% per annum, and women (because they trade less and thus incur less costs) trail the market by about 2% per annum. In addition, they found that those investors who traded the most trailed the market on a risk-adjusted basis by over 10 percent per annum. And to prove that more heads are not better than one, they found that investment clubs trailed the market by almost 4% per annum.

                                                                     Betting against an efficient market

                                                                     Betting against an efficient market is a loser’s game. It doesn’t matter whether the “game” is betting on a sporting event or trying to identify which stocks will outperform the market. While it is possible to win by betting on sporting events, because the markets are highly efficient, the only likely winners are the bookies. In addition, the more you play the game, the more likely you will lose, and the bookies will win. The same is true of investing. And the reason is that the securities markets are also highly efficient.

                                                                     If you try to time the market, pick stocks, or hire managers to engage in that activity for you, you are playing a loser’s game. Just as you can win by betting on sporting events, you can win (outperform) by picking stocks, timing the market, or using active managers to play the game on your behalf. However, the odds are poor. And just as with gambling, the more and the longer you play the game, the more likely you will lose (as the costs of playing compound). This makes accepting market returns (passive investing) the winner’s game.

                                                                     Larry advises investors to invest in passively managed funds and adopt a simple buy, hold, and rebalance strategy. This way, you are guaranteed to earn market rates of returns at a low cost and relatively tax-efficient manner. You are also virtually guaranteed to outperform the majority of professional and individual investors. Thus, it is the strategy most likely to achieve the best results. The bottom line is that while gamblers make bets (speculate on individual stocks and actively managed funds), investors let the markets work for them, not against them.

                                                                     Further reading

                                                                     1. William J. Bernstein, The Four Pillars of Investing (McGraw-Hill, 2002).
                                                                     2. Raymond D. Sauer, “The Economics of Wagering Markets,” Journal of...]]>In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 02: How Markets Set Prices.

                                                                        LEARNING: Invest in passively managed funds and adopt a simple buy, hold, and rebalance strategy. While gamblers make bets, investors let the markets work for them, not against them.

                                                                         

                                                                        “The only way to beat an efficient market is to either know something the market doesn’t—such as the fact that a team’s best player is injured and will not be able to play—or to be able to interpret information about the teams better than the market (other gamblers collectively) does.”

                                                                        Larry Swedroe

                                                                         

                                                                        In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over the 30 years or so that he’s been trying to help investors. Larry is the head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                        Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 02: How Markets Set Prices.

                                                                        Chapter 02: How Markets Set Prices

                                                                        In this chapter, Larry explains how markets set prices—probably the most important thing investors need to learn before they invest a penny. Without this knowledge, investors won’t know whether the stock they buy is undervalued or overvalued. Larry insists that investors should have a good understanding of how the market gets to a specific price.

                                                                        Point spread betting

                                                                        To explain the complicated concept of how markets set prices, Larry uses an analogy related to college basketball backed up by academic research. Duke is a perennial contender for the national championship. Every year, it’s ranked in the top 25. At the start of every season, most college teams that are good try to schedule a few of what are called “cupcake” games to give their players a chance to get in the routine, learn the plays, get to know each other, etc., before they meet tougher competition.

                                                                        Duke often scheduled a game against Army. Army traveled down every year to Duke, where they would get a big payday, and Duke would have an easy win. No one in their right mind would bet on Army to win that game because they have played probably 30-40 times already, and Duke has won every game. And they could play another 30 or 40 times and win every game. However, people decide to entice others to bet on Army.

                                                                        To make it an equal bet, they create a point spread. The bookies set the initial point spread where they think they can get an equal amount of money bet on both sides. The bookies do their analysis and set the initial spread, but they don’t set the actual spread, which is determined by the betters in their actions. So if a lot of money starts coming in betting on Duke, the bookies will raise the spread until money starts coming in on Army until they get an equal amount of money. Then, the winner has to put up $110 to win $100. If they win, you get their $110 back and the bookies’s $100. But if you lose, you lose $110, not $100. So the bookies collect that $10 on the total of $200. So, what happens is that the point spread is moving based on the collective wisdom of the markets.

                                                                        It’s very easy to determine whether Duke is going to win or not. But it’s tough to beat that point spread. Very rarely does the point spread predict the actual outcome. However, it is an unbiased estimator of the outcome. An “unbiased estimator” is a statistic that is, on average, neither too high nor too low. Evidence from a study covering six NBA seasons shows that the average error was less than one-quarter of one point. So, there’s no way to exploit that information.

                                                                        In terms of investing, Larry gives an example of when you want to buy a stock (making a bet on the company), you have to buy it from someone. A stockbroker will not sell that stock to you because he might lose money. Instead, they find someone who wants to sell the stock and match the buyer with the seller. He is taking bets, not making bets. In the process, he earns the vigorish (a commission). Like stockbrokers, bookies want to take bets, not make them. Thus, they set the initial point spread at the “price” they believe will balance the forces of supply and demand (the point at which an equal amount of money will be bet on Duke and Army).

                                                                        How to beat an efficient market

                                                                        A market in which it is difficult to persistently exploit mispricing after the expenses of the effort is called an “efficient” market. According to Larry, the only way to beat an efficient market is to either know something the market doesn’t—such as the fact that a team’s best player is injured and will not be able to play—or to be able to interpret information about the teams better than the market (other gamblers collectively) does.

                                                                        The existence of an efficient public market in which the knowledge of all bettors (investors) is used to set prices protects the less informed bettors (investors) from being exploited. On the other hand, the existence of an efficient market prevents the sophisticated and more knowledgeable bettors (investors) from exploiting their less knowledgeable counterparts.

                                                                        Since about 90 percent of all trading is done by large institutional traders, these sophisticated investors are setting prices, not amateur individual investors. The competition is undoubtedly tougher, with professionals (instead of amateurs) dominating the market. Every time an individual buys a stock, he should consider that he is competing with these giant institutional investors. The individual investor should also acknowledge that institutions have more resources, and thus, they will likely succeed.

                                                                        However, study after study demonstrates that the majority of individual and institutional investors who attempt to beat the market by either picking stocks or timing the market fail miserably, and they do so with great persistence.

                                                                        A study by University of California professors Brad Barber and Terrance Odean found that the stocks individual investors buy underperform the market after they buy them, and the stocks they sell outperform after they sell them. They also found that male investors underperform the market by about 3% per annum, and women (because they trade less and thus incur less costs) trail the market by about 2% per annum. In addition, they found that those investors who traded the most trailed the market on a risk-adjusted basis by over 10 percent per annum. And to prove that more heads are not better than one, they found that investment clubs trailed the market by almost 4% per annum.

                                                                        Betting against an efficient market

                                                                        Betting against an efficient market is a loser’s game. It doesn’t matter whether the “game” is betting on a sporting event or trying to identify which stocks will outperform the market. While it is possible to win by betting on sporting events, because the markets are highly efficient, the only likely winners are the bookies. In addition, the more you play the game, the more likely you will lose, and the bookies will win. The same is true of investing. And the reason is that the securities markets are also highly efficient.

                                                                        If you try to time the market, pick stocks, or hire managers to engage in that activity for you, you are playing a loser’s game. Just as you can win by betting on sporting events, you can win (outperform) by picking stocks, timing the market, or using active managers to play the game on your behalf. However, the odds are poor. And just as with gambling, the more and the longer you play the game, the more likely you will lose (as the costs of playing compound). This makes accepting market returns (passive investing) the winner’s game.

                                                                        Larry advises investors to invest in passively managed funds and adopt a simple buy, hold, and rebalance strategy. This way, you are guaranteed to earn market rates of returns at a low cost and relatively tax-efficient manner. You are also virtually guaranteed to outperform the majority of professional and individual investors. Thus, it is the strategy most likely to achieve the best results. The bottom line is that while gamblers make bets (speculate on individual stocks and actively managed funds), investors let the markets work for them, not against them.

                                                                        Further reading

                                                                        1. William J. Bernstein, The Four Pillars of Investing (McGraw-Hill, 2002).
                                                                        2. Raymond D. Sauer, “The Economics of Wagering Markets,” Journal of Economic Literature, 36.
                                                                        3. Daniel C. Hickman, “Efficiency in the Madness? Examining the Betting Market for the NCAA Men’s Basketball Tournament,” Journal of Economics and Finance (July 2020).
                                                                        4. Guy Elaad, James Reade, and Carl Singleton, “Information, Prices and Efficiency in an Online Betting Market,” Finance Research Letters (July 2020).
                                                                        5. James Suroweicki, “The Wisdom of Crowds,” (Doubleday 2004).
                                                                        6. Brad Barber and Terrance Odean, “Boys Will Be Boys: Gender, Overconfidence and Common Stock Investment,” Quarterly Journal of Economics (February 2001).
                                                                        7. Brad Barber and Terrance Odean, “Trading Is Hazardous to Your Wealth.”
                                                                        8. Brad Barber and Terrance Odean, “Too Many Cooks Spoil the Profits: Investment Club Performance,” Financial Analysts Journal (January/February 2000).
                                                                        9. Andrew Tobias, The Only Investment Book You Will Ever Need (Harcourt, 1978).
                                                                        10. Fama, Eugene F., and Kenneth R. French. 2010. “Luck versus Skill in the Cross-Section of Mutual Fund Returns.” Journal of Finance, vol. 65, no. 5 (October):1915.
                                                                        11. Meyer-Brauns, Philipp, “Mutual Fund Performance through a Five-Factor Lens.” Dimensional Fund Advisors white paper. 2016.
                                                                        12. Andrew Berkin and Larry E. Swedroe, “The Incredible Shrinking Alpha,” Harriman House (2020).
                                                                        13. William Berlind, “Bookies in Exile,” New York Times, August 17, 2003.
                                                                        
                                                                        

                                                                        Did you miss out on the previous chapter? Check them out:

                                                                        • Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
                                                                        
                                                                        

                                                                        About Larry Swedroe

                                                                        Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                        Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                        Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                        Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                         

                                                                        [spp-transcript]

                                                                         

                                                                        Connect with Larry Swedroe

                                                                        • LinkedIn
                                                                        • Twitter
                                                                        • Website
                                                                        • Books
                                                                        
                                                                        

                                                                        Andrew’s books

                                                                        • How to Start Building Your Wealth Investing in the Stock Market
                                                                        • My Worst Investment Ever
                                                                        • 9 Valuation Mistakes and How to Avoid Them
                                                                        • Transform Your Business with Dr.Deming’s 14 Points
                                                                        
                                                                        

                                                                        Andrew’s online programs

                                                                        • Valuation Master Class
                                                                        • The Become a Better Investor Community
                                                                        • How to Start Building Your Wealth Investing in the Stock Market
                                                                        • Finance Made Ridiculously Simple
                                                                        • FVMR Investing: Quantamental Investing Across the World
                                                                        • Become a Great Presenter and Increase Your Influence
                                                                        • Transform Your Business with Dr. Deming’s 14 Points
                                                                        • Achieve Your Goals
                                                                        
                                                                        

                                                                        Connect with Andrew Stotz:

                                                                        • astotz.com
                                                                        • LinkedIn
                                                                        • Facebook
                                                                        • Instagram
                                                                        • Twitter
                                                                        • YouTube
                                                                        • My Worst Investment Ever Podcast
                                                                        
                                                                        ]]>f3ab3201-9735-48bf-8661-849a8c899a56Tue, 18 Jun 2024 06:00:00 +070036:53falsefullRizwan Memon - Have Enough Liquidity When Shorting Naked CallsBIO: Rizwan Memon is the Founder and President of Riz International, a Canada-based financial education firm that helps thousands worldwide maximize their financial success through trading.

                                                                        STORY: Rizwan shorted GameStop’s stock, believing the price wouldn’t exceed $300. However, when Elon Musk tweeted about GameStop, the price increased to $500. Rizwan suffered a $160,000 loss on a single trade.

                                                                        LEARNING: When shorting naked calls, make sure you have enough liquidity. Control the amount of money you bet on any particular position. Don’t trade on emotions.

                                                                         

                                                                        “Sometimes the math, the probabilities—everything—can make sense, and you still end up being wrong.”

                                                                        Rizwan Memon

                                                                         

                                                                        Guest profile

                                                                        Rizwan Memon is the Founder and President of Riz International, a Canada-based financial education firm that helps thousands of people worldwide maximize their financial success through trading.

                                                                        Having 17 years of experience behind him, Rizwan is a seasoned expert in 8-figure stocks and options trading. Starting at 16 with just $5,000, he has made $10.5M+ in trading profits.

                                                                        With 123,000 followers on Instagram and a vast global audience tuned into his trading advice, Rizwan has established himself as a voice of authority in the financial market. In 2023, he secured solid returns of 70% on his 7-figure trading account.

                                                                        Worst investment ever

                                                                        Rizwan’s personal investment journey took a hit in 2021 when he decided to buy GameStop stocks. He adopted a strategic approach, betting against the stock going above a certain ceiling. He believed that the stock would remain below $300 per share despite its already significant rise of 300%.

                                                                        Gamestop was a disgruntled business that was not in great shape. It was on the verge of bankruptcy due to massive cash flow issues. Rizwan knew that this was unsustainable. So, he decided to put a ceiling on his investment, believing the stock would stay below $300. From a probability standpoint, the numbers were 99.5% in his favor. Rizwan shorted naked call options and loaded up a bit, but nothing substantive. After that, the stock went from $300 to $500 in about two days. This was after Elon Musk tweeted about GameStop. Rizwan knew he was in trouble. He remembers going to get groceries and sitting in the parking lot feeling miserable. Rizwan suffered a $160,000 loss on a single trade.

                                                                        Lessons learned

                                                                        • When shorting naked calls, make sure you have enough liquidity.
                                                                        • Trading patterns are always rapidly evolving.
                                                                        • Sometimes, the math, the probabilities, and everything can make sense, and you still end up being wrong.
                                                                        • Don’t trade on emotions.
                                                                        
                                                                        

                                                                        Andrew’s takeaways

                                                                        • Black Swans can happen. To handle such events from an investing perspective, ensure you’re diversified.
                                                                        • Control the amount of money you bet on any particular position.
                                                                        
                                                                        

                                                                        Actionable advice

                                                                        Avoid engaging in trades that may be complex or outside of your purview. Regardless of what influencers say, be skeptical and do your due diligence.

                                                                        Rizwan’s recommendations

                                                                        If you have questions or want to learn more about investing in stock markets, Rizwan is readily available on LinkedIn and Instagram. He is committed to sharing his knowledge and experiences to help you navigate the complex world of stock market investing.

                                                                        No.1 goal for the next 12 months

                                                                        Rizwan’s number one goal for the next 12 months is consistently beating the markets again.

                                                                        Parting words

                                                                         

                                                                        “Manage risk and enjoy the process.”

                                                                        Rizwan Memon

                                                                         

                                                                        [spp-transcript]

                                                                         

                                                                        Connect with Rizwan Memon

                                                                        • LinkedIn
                                                                        • Instagram
                                                                        • Website
                                                                        
                                                                        

                                                                        Andrew’s books

                                                                        • How to Start Building Your Wealth Investing in the Stock Market
                                                                        • My Worst Investment Ever
                                                                        • 9 Valuation Mistakes and How to Avoid Them
                                                                        • Transform Your Business with Dr.Deming’s 14 Points
                                                                        
                                                                        

                                                                        Andrew’s online programs

                                                                        • Valuation Master Class
                                                                        • The Become a Better Investor Community
                                                                        • How to Start Building Your Wealth Investing in the Stock Market
                                                                        • Finance Made Ridiculously Simple
                                                                        • FVMR Investing: Quantamental Investing Across the World
                                                                        • Become a Great Presenter and Increase Your Influence
                                                                        • Transform Your Business with Dr. Deming’s 14 Points
                                                                        • Achieve Your Goals
                                                                        
                                                                        

                                                                        Connect with Andrew Stotz:

                                                                        • astotz.com
                                                                        • LinkedIn
                                                                        • Facebook
                                                                        • Instagram
                                                                        • Threads
                                                                        • Twitter
                                                                        • YouTube
                                                                        • My Worst Investment Ever Podcast
                                                                        
                                                                        ]]>BIO: Rizwan Memon is the Founder and President of Riz International, a Canada-based financial education firm that helps thousands worldwide maximize their financial success through trading.

                                                                        STORY: Rizwan shorted GameStop’s stock, believing the price wouldn’t exceed $300. However, when Elon Musk tweeted about GameStop, the price increased to $500. Rizwan suffered a $160,000 loss on a single trade.

                                                                        LEARNING: When shorting naked calls, make sure you have enough liquidity. Control the amount of money you bet on any particular position. Don’t trade on emotions.

                                                                         

                                                                        “Sometimes the math, the probabilities—everything—can make sense, and you still end up being wrong.”

                                                                        Rizwan Memon

                                                                         

                                                                        Guest profile

                                                                        Rizwan Memon is the Founder and President of Riz International, a Canada-based financial education firm that helps thousands of people worldwide maximize their financial success through trading.

                                                                        Having 17 years of experience behind him, Rizwan is a seasoned expert in 8-figure stocks and options trading. Starting at 16 with just $5,000, he has made $10.5M+ in trading profits.

                                                                        With 123,000 followers on Instagram and a vast global audience tuned into his trading advice, Rizwan has established himself as a voice of authority in the financial market. In 2023, he secured solid returns of 70% on his 7-figure trading account.

                                                                        Worst investment ever

                                                                        Rizwan’s personal investment journey took a hit in 2021 when he decided to buy GameStop stocks. He adopted a strategic approach, betting against the stock going above a certain ceiling. He believed that the stock would remain below $300 per share despite its already significant rise of 300%.

                                                                        Gamestop was a disgruntled business that was not in great shape. It was on the verge of bankruptcy due to massive cash flow issues. Rizwan knew that this was unsustainable. So, he decided to put a ceiling on his investment, believing the stock would stay below $300. From a probability standpoint, the numbers were 99.5% in his favor. Rizwan shorted naked call options and loaded up a bit, but nothing substantive. After that, the stock went from $300 to $500 in about two days. This was after Elon Musk tweeted about GameStop. Rizwan knew he was in trouble. He remembers going to get groceries and sitting in the parking lot feeling miserable. Rizwan suffered a $160,000 loss on a single trade.

                                                                        Lessons learned

                                                                        • When shorting naked calls, make sure you have enough liquidity.
                                                                        • Trading patterns are always rapidly evolving.
                                                                        • Sometimes, the math, the probabilities, and everything can make sense, and you still end up being wrong.
                                                                        • Don’t trade on emotions.
                                                                        
                                                                        

                                                                        Andrew’s takeaways

                                                                        • Black Swans can happen. To handle such events from an investing perspective, ensure you’re diversified.
                                                                        • Control the amount of money you bet on any particular position.
                                                                        
                                                                        

                                                                        Actionable advice

                                                                        Avoid engaging in trades that may be complex or outside of your purview. Regardless of what influencers say, be skeptical and do your due diligence.

                                                                        Rizwan’s recommendations

                                                                        If you have questions or want to learn more about investing in stock markets, Rizwan is readily available on LinkedIn and Instagram. He is committed to sharing his knowledge and experiences to help you navigate the complex world of stock market investing.

                                                                        No.1 goal for the next 12 months

                                                                        Rizwan’s number one goal for the next 12 months is consistently beating the markets again.

                                                                        Parting words

                                                                         

                                                                        “Manage risk and enjoy the process.”

                                                                        Rizwan Memon

                                                                         

                                                                        [spp-transcript]

                                                                         

                                                                        Connect with Rizwan Memon

                                                                        • LinkedIn
                                                                        • Instagram
                                                                        • Website
                                                                        
                                                                        

                                                                        Andrew’s books

                                                                        • How to Start Building Your Wealth Investing in the Stock Market
                                                                        • My Worst Investment Ever
                                                                        • 9 Valuation Mistakes and How to Avoid Them
                                                                        • Transform Your Business with Dr.Deming’s 14 Points
                                                                        
                                                                        

                                                                        Andrew’s online programs

                                                                        • Valuation Master Class
                                                                        • The Become a Better Investor Community
                                                                        • How to Start Building Your Wealth Investing in the Stock Market
                                                                        • Finance Made Ridiculously Simple
                                                                        • FVMR Investing: Quantamental Investing Across the World
                                                                        • Become a Great Presenter and Increase Your Influence
                                                                        • Transform Your Business with Dr. Deming’s 14 Points
                                                                        • Achieve Your Goals
                                                                        
                                                                        

                                                                        Connect with Andrew Stotz:

                                                                        • astotz.com
                                                                        • LinkedIn
                                                                        • Facebook
                                                                        • Instagram
                                                                        • Threads
                                                                        • Twitter
                                                                        • YouTube
                                                                        • My Worst Investment Ever Podcast
                                                                        
                                                                        ]]>7d8f6a4c-4836-44df-b431-c78762e5005bTue, 11 Jun 2024 06:00:00 +070027:25falsefullEnrich Your Future 01: The Determinants of the Risk and Return of Stocks and BondsIn this episode of Investing Principles, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 1: The Determinants of the Risk and Return of Stocks and Bonds.

                                                                        LEARNING: Look for key metrics, traits, or characteristics that help them identify stocks that will outperform the market.

                                                                         

                                                                        “Intelligent people maintain open minds when it comes to new ideas. And they change strategies when there is compelling evidence demonstrating the ‘conventional wisdom’ is wrong.”

                                                                        Larry Swedroe

                                                                         

                                                                        In this episode of Investing Principles, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories Larry has developed over the 30+ years he’s been trying to help investors. Larry is the head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                        Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 1: The Determinants of the Risk and Return of Stocks and Bonds.

                                                                        Chapter 1: The Determinants of the Risk and Return of Stocks and Bonds

                                                                        In this chapter, Larry looks at research that revolutionized how people think about investing and how to build a winning portfolio. The goal is to help investors learn how to look for key metrics, traits, or characteristics that help them identify stocks that will outperform the market, at least in terms of delivering higher returns, not necessarily higher risk-adjusted returns.

                                                                        The three-factor model

                                                                        The first research Larry talks about is by Eugene Fama and Kenneth French. Their paper “The Cross-Section of Expected Stock Returns” in The Journal of Finance focused on research that produced what has become known as the three-factor model. A factor is a common trait or characteristic of a stock or bond. The three factors explained by Fama and French are:

                                                                        1. Market beta (the return of the market minus the return on one-month Treasury bills)
                                                                        2. Size (the return on small stocks minus the return on large stocks)
                                                                        3. Value (the return on value stocks minus the return on growth stocks).
                                                                        
                                                                        

                                                                        The model can explain more than 90% of the variation of returns of diversified US equity portfolios. The research shows that ensemble funds are superior to individual funds. It’s better to have a multi-factor portfolio. So you could own, say, five different funds that have exposure to each individual factor, or you own one fund that gives you exposure to all those factors. The ensemble strategies always tend to do better.

                                                                        The two-factor model

                                                                        Larry also highlights a second model by professors Fama and French, the two-factor model that explains the variation of returns of fixed-income portfolios. The two risk factors are term and default (credit risk). According to the model, the longer the term to maturity, the greater the risk; the lower the credit rating, the greater the risk. Markets compensate investors for taking risks with higher expected returns. As with equities, individual security selection and market timing do not play a significant role in explaining returns of fixed-income portfolios and thus should not be expected to add value.

                                                                        Buffett’s Alpha

                                                                        Another significant academic research publication is the study “Buffett’s Alpha.” The authors, Andrea Frazzini, David Kabiller, and Lasse Pedersen, examined the performance of the stocks owned by legendary investor Warren Buffett’s Berkshire Hathaway. They found that, besides benefiting from using cheap leverage provided by Berkshire’s insurance operations, Buffett buys safe, cheap, high-quality, and large stocks. Their most interesting finding was that stocks with these characteristics tend to perform well in general, not just the stocks with these characteristics that Buffett buys. Larry observes that Buffett’s strategy, or exposure to factors, explains his success, not his stock-picking skills. Also, he never engages in panicked selling.

                                                                        Larry says that investors don’t need to be stock pickers like Warren Buffett. They can simply buy stocks with the same characteristics as Warren Buffett’s stocks without doing all the research. Today, companies like AQR, Avantis, Bridgeway, Dimensional, and others use that research so that every investor can access those characteristics and decide which characteristics they want to invest in. The iShares MSCI USA Quality Factor ETF (QUAL) buys quality stocks. It has an expense ratio of just 0.15% and is highly tax-efficient as an ETF.

                                                                        Luck versus skill

                                                                        Academic research has demonstrated that efforts to outperform the market by either security selection or timing are improbable in proving productive after taking into account the costs, including taxes, of the efforts. For example, studies such as the “Luck versus Skill in the Cross-Section of Mutual Fund Returns” have found that fewer active managers (about 2%) can outperform their three-factor-model benchmark than would be expected by chance. That is even before considering the impact of taxes, which for taxable investors is typically the most significant expense of active management (greater than the fund’s expense ratio and/or trading costs).

                                                                        Larry, therefore, recommends:

                                                                        • Developing a portfolio that reflects your unique ability, willingness, and need to take risks. The equity portion should be globally diversified across multiple asset classes. The fixed-income portion should be diversified in terms of credit and term risk, as appropriate.
                                                                        • Avoiding the use of actively managed funds. Instead, invest in funds that provide systematic exposure to the factors you seek exposure to, such as low-risk and tax-efficient index funds.
                                                                        • In the case of fixed-income assets (for those individuals who have sufficient assets to do so), build a portfolio of individual Treasury securities and/or FDIC-insured CDs, and for taxable accounts, AAA- and AA-rated municipal bonds that are also either general obligation or essential service revenue bonds. Doing so dramatically reduces the credit risk and, therefore, the need for diversification (which is the benefit of a mutual fund).
                                                                        • Having the discipline to stay the course, ignoring the noise of the markets and the emotions caused by the noise—emotions that cause investors to abandon even the most well-developed plans.
                                                                        
                                                                        

                                                                        Notes

                                                                        1. Michael Lewis, Moneyball (Norton 2003), p. 67.
                                                                        2. Eugene Fama and Kenneth French, “The Cross-Section of Expected Stock Returns,” The Journal of Finance (June 1992).
                                                                        3. Andrea Frazzini, David Kabiller and Lasse Pedersen, “Buffett’s Alpha,” Financial Analysts Journal (September 2018).
                                                                        4. Eugene Fama and Kenneth French, “Luck versus Skill in the Cross-Section of Mutual Fund Returns,” The Journal of Finance (September 2010).
                                                                        
                                                                        

                                                                        About Larry Swedroe

                                                                        Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                        Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                        Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                        Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                         

                                                                        [spp-transcript]

                                                                         

                                                                        Connect with Larry Swedroe

                                                                        • LinkedIn
                                                                        • Twitter
                                                                        • In this episode of Investing Principles, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 1: The Determinants of the Risk and Return of Stocks and Bonds.

                                                                          LEARNING: Look for key metrics, traits, or characteristics that help them identify stocks that will outperform the market.

                                                                           

                                                                          “Intelligent people maintain open minds when it comes to new ideas. And they change strategies when there is compelling evidence demonstrating the ‘conventional wisdom’ is wrong.”

                                                                          Larry Swedroe

                                                                           

                                                                          In this episode of Investing Principles, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories Larry has developed over the 30+ years he’s been trying to help investors. Larry is the head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                          Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 1: The Determinants of the Risk and Return of Stocks and Bonds.

                                                                          Chapter 1: The Determinants of the Risk and Return of Stocks and Bonds

                                                                          In this chapter, Larry looks at research that revolutionized how people think about investing and how to build a winning portfolio. The goal is to help investors learn how to look for key metrics, traits, or characteristics that help them identify stocks that will outperform the market, at least in terms of delivering higher returns, not necessarily higher risk-adjusted returns.

                                                                          The three-factor model

                                                                          The first research Larry talks about is by Eugene Fama and Kenneth French. Their paper “The Cross-Section of Expected Stock Returns” in The Journal of Finance focused on research that produced what has become known as the three-factor model. A factor is a common trait or characteristic of a stock or bond. The three factors explained by Fama and French are:

                                                                          1. Market beta (the return of the market minus the return on one-month Treasury bills)
                                                                          2. Size (the return on small stocks minus the return on large stocks)
                                                                          3. Value (the return on value stocks minus the return on growth stocks).
                                                                          
                                                                          

                                                                          The model can explain more than 90% of the variation of returns of diversified US equity portfolios. The research shows that ensemble funds are superior to individual funds. It’s better to have a multi-factor portfolio. So you could own, say, five different funds that have exposure to each individual factor, or you own one fund that gives you exposure to all those factors. The ensemble strategies always tend to do better.

                                                                          The two-factor model

                                                                          Larry also highlights a second model by professors Fama and French, the two-factor model that explains the variation of returns of fixed-income portfolios. The two risk factors are term and default (credit risk). According to the model, the longer the term to maturity, the greater the risk; the lower the credit rating, the greater the risk. Markets compensate investors for taking risks with higher expected returns. As with equities, individual security selection and market timing do not play a significant role in explaining returns of fixed-income portfolios and thus should not be expected to add value.

                                                                          Buffett’s Alpha

                                                                          Another significant academic research publication is the study “Buffett’s Alpha.” The authors, Andrea Frazzini, David Kabiller, and Lasse Pedersen, examined the performance of the stocks owned by legendary investor Warren Buffett’s Berkshire Hathaway. They found that, besides benefiting from using cheap leverage provided by Berkshire’s insurance operations, Buffett buys safe, cheap, high-quality, and large stocks. Their most interesting finding was that stocks with these characteristics tend to perform well in general, not just the stocks with these characteristics that Buffett buys. Larry observes that Buffett’s strategy, or exposure to factors, explains his success, not his stock-picking skills. Also, he never engages in panicked selling.

                                                                          Larry says that investors don’t need to be stock pickers like Warren Buffett. They can simply buy stocks with the same characteristics as Warren Buffett’s stocks without doing all the research. Today, companies like AQR, Avantis, Bridgeway, Dimensional, and others use that research so that every investor can access those characteristics and decide which characteristics they want to invest in. The iShares MSCI USA Quality Factor ETF (QUAL) buys quality stocks. It has an expense ratio of just 0.15% and is highly tax-efficient as an ETF.

                                                                          Luck versus skill

                                                                          Academic research has demonstrated that efforts to outperform the market by either security selection or timing are improbable in proving productive after taking into account the costs, including taxes, of the efforts. For example, studies such as the “Luck versus Skill in the Cross-Section of Mutual Fund Returns” have found that fewer active managers (about 2%) can outperform their three-factor-model benchmark than would be expected by chance. That is even before considering the impact of taxes, which for taxable investors is typically the most significant expense of active management (greater than the fund’s expense ratio and/or trading costs).

                                                                          Larry, therefore, recommends:

                                                                          • Developing a portfolio that reflects your unique ability, willingness, and need to take risks. The equity portion should be globally diversified across multiple asset classes. The fixed-income portion should be diversified in terms of credit and term risk, as appropriate.
                                                                          • Avoiding the use of actively managed funds. Instead, invest in funds that provide systematic exposure to the factors you seek exposure to, such as low-risk and tax-efficient index funds.
                                                                          • In the case of fixed-income assets (for those individuals who have sufficient assets to do so), build a portfolio of individual Treasury securities and/or FDIC-insured CDs, and for taxable accounts, AAA- and AA-rated municipal bonds that are also either general obligation or essential service revenue bonds. Doing so dramatically reduces the credit risk and, therefore, the need for diversification (which is the benefit of a mutual fund).
                                                                          • Having the discipline to stay the course, ignoring the noise of the markets and the emotions caused by the noise—emotions that cause investors to abandon even the most well-developed plans.
                                                                          
                                                                          

                                                                          Notes

                                                                          1. Michael Lewis, Moneyball (Norton 2003), p. 67.
                                                                          2. Eugene Fama and Kenneth French, “The Cross-Section of Expected Stock Returns,” The Journal of Finance (June 1992).
                                                                          3. Andrea Frazzini, David Kabiller and Lasse Pedersen, “Buffett’s Alpha,” Financial Analysts Journal (September 2018).
                                                                          4. Eugene Fama and Kenneth French, “Luck versus Skill in the Cross-Section of Mutual Fund Returns,” The Journal of Finance (September 2010).
                                                                          
                                                                          

                                                                          About Larry Swedroe

                                                                          Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                          Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                          Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                          Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                           

                                                                          [spp-transcript]

                                                                           

                                                                          Connect with Larry Swedroe

                                                                          • LinkedIn
                                                                          • Twitter
                                                                          • Website
                                                                          • Books
                                                                          
                                                                          

                                                                          Andrew’s books

                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                          • My Worst Investment Ever
                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                          
                                                                          

                                                                          Andrew’s online programs

                                                                          • Valuation Master Class
                                                                          • The Become a Better Investor Community
                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                          • Finance Made Ridiculously Simple
                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                          • Become a Great Presenter and Increase Your Influence
                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                          • Achieve Your Goals
                                                                          
                                                                          

                                                                          Connect with Andrew Stotz:

                                                                          • astotz.com
                                                                          • LinkedIn
                                                                          • Facebook
                                                                          • Instagram
                                                                          • Twitter
                                                                          • YouTube
                                                                          • My Worst Investment Ever Podcast
                                                                          
                                                                          ]]>b1457c85-ce34-42cf-9c52-5c489fa60253Tue, 04 Jun 2024 06:00:00 +070044:11falsefullMark Kohler - Take Ownership of What You’re Doing WrongBIO: Mark Kohler, M.PR.A., C.P.A., J.D., is a highly respected Founding and Senior Partner at KKOS Lawyers, specializing in tax, legal, wealth, estate, and asset protection planning.

                                                                          STORY: Mark and his partner bought two properties to put up on Airbnb. The first property needed just a bit of modification, but the second one required far more. It took them more time and money than expected to get it ready for renting.

                                                                          LEARNING: Take ownership of your mistakes. If a problem occurs, admit it, step up, and try to solve it—don’t run away or stick your head in the sand. The majority of trouble we face in our lives will be caused by ourselves.

                                                                           

                                                                          “When you’re pivoting in the face of a disaster or a bad investment, the first thing to do is give yourself some grace.”

                                                                          Mark Kohler

                                                                           

                                                                          Guest profile

                                                                          Mark Kohler, M.PR.A., C.P.A., J.D., is a highly respected Founding and Senior Partner at KKOS Lawyers, specializing in tax, legal, wealth, estate, and asset protection planning.

                                                                          With a reputation as a YouTube personality, best-selling author, and national speaker, Mark is dedicated to guiding clients through complex legal and financial landscapes to achieve their American Dream.

                                                                          He also serves as the co-founder and Board Member of the Directed IRA Trust Company and has launched the Main Street Certified Tax Advisor Program to train CPAs and Enrolled Agents nationwide.

                                                                          As the co-host of The Main Street Business Podcast and The Directed IRA Podcast, he simplifies intricate topics like legal and tax strategy, asset protection, retirement, investing, and wealth growth.

                                                                          Mark Kohler’s commitment to helping entrepreneurs and small business owners attain success and financial security has made him a trusted expert in the field. He has helped countless individuals and businesses navigate the financial and business world with confidence.

                                                                          Worst investment ever

                                                                          Mark and his partner bought two properties in Arizona to turn into Airbnbs. They aimed to modify them over two to three months and set them up on the Airbnb platform. They hoped to start renting them out during the winter, which is a great Airbnb season. The first property was beautiful and simply needed yard furnishings.

                                                                          At the same time, 10 blocks away was the other property, which they thought would need some minor work, just like the first property. A few weeks later, they realized the property would take a ton of work, but the train had left the station, and there was no turning back. And so the damage began. The two partners added a lot of value to this property, but it was far more than they wanted to bite off and chew. Modifying the property took more time and money than expected.

                                                                          Lessons learned

                                                                          • You can make a good investment, and something outside your control happens.
                                                                          • Take ownership of what you’re doing wrong.
                                                                          • If a problem occurs, admit it, step up, and try to solve it—don’t run away or stick your head in the sand.
                                                                          
                                                                          

                                                                          Andrew’s takeaways

                                                                          • The majority of trouble we face in our lives will be caused by ourselves.
                                                                          • When you do something wrong, admit it to yourself as a first step.
                                                                          • If you cause damage to another person, you must amend and resolve it.
                                                                          • You can’t get help on something if you haven’t admitted it.
                                                                          • If your process is good and you keep improving, you progress.
                                                                          
                                                                          

                                                                          Actionable advice

                                                                          When you are pivoting in the face of a disaster or a bad investment, recognize that it’s not the end of the world, give yourself some grace, look for the silver lining, and get to work.

                                                                          Mark’s recommendations

                                                                          If you’re in the Airbnb market, Mark recommends reading Daniel Rusteen’s books. He also recommends his podcast, The Main Street Business Podcast, which has some great interviews about Main Street business and investing strategies.

                                                                          No.1 goal for the next 12 months

                                                                          Mark’s number one goal for the next 12 months is to dial in the Main Street business tax pro certification. He wants to have 1,000 members by the end of the year. These are 1,000 business owners, tax professionals, and legal and financial professionals looking for a group of like-minded individuals and tribes.

                                                                          Parting words

                                                                           

                                                                          “Don’t give up no matter what.”

                                                                          Mark Kohler

                                                                           

                                                                          [spp-transcript]

                                                                           

                                                                          Connect with Mark Kohler

                                                                          • LinkedIn
                                                                          • Twitter
                                                                          • Facebook
                                                                          • Instagram
                                                                          • Podcast
                                                                          • YouTube 
                                                                          • Website
                                                                          • Books
                                                                          
                                                                          

                                                                          Andrew’s books

                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                          • My Worst Investment Ever
                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                          
                                                                          

                                                                          Andrew’s online programs

                                                                          • Valuation Master Class
                                                                          • The Become a Better Investor Community
                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                          • Finance Made Ridiculously Simple
                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                          • Become a Great Presenter and Increase Your Influence
                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                          • Achieve Your Goals
                                                                          
                                                                          

                                                                          Connect with Andrew Stotz:

                                                                          • astotz.com
                                                                          • LinkedIn
                                                                          • Facebook
                                                                          • Instagram
                                                                          • Threads
                                                                          • Twitter
                                                                          • YouTube
                                                                          • My Worst Investment Ever Podcast
                                                                          
                                                                          ]]>BIO: Mark Kohler, M.PR.A., C.P.A., J.D., is a highly respected Founding and Senior Partner at KKOS Lawyers, specializing in tax, legal, wealth, estate, and asset protection planning.

                                                                          STORY: Mark and his partner bought two properties to put up on Airbnb. The first property needed just a bit of modification, but the second one required far more. It took them more time and money than expected to get it ready for renting.

                                                                          LEARNING: Take ownership of your mistakes. If a problem occurs, admit it, step up, and try to solve it—don’t run away or stick your head in the sand. The majority of trouble we face in our lives will be caused by ourselves.

                                                                           

                                                                          “When you’re pivoting in the face of a disaster or a bad investment, the first thing to do is give yourself some grace.”

                                                                          Mark Kohler

                                                                           

                                                                          Guest profile

                                                                          Mark Kohler, M.PR.A., C.P.A., J.D., is a highly respected Founding and Senior Partner at KKOS Lawyers, specializing in tax, legal, wealth, estate, and asset protection planning.

                                                                          With a reputation as a YouTube personality, best-selling author, and national speaker, Mark is dedicated to guiding clients through complex legal and financial landscapes to achieve their American Dream.

                                                                          He also serves as the co-founder and Board Member of the Directed IRA Trust Company and has launched the Main Street Certified Tax Advisor Program to train CPAs and Enrolled Agents nationwide.

                                                                          As the co-host of The Main Street Business Podcast and The Directed IRA Podcast, he simplifies intricate topics like legal and tax strategy, asset protection, retirement, investing, and wealth growth.

                                                                          Mark Kohler’s commitment to helping entrepreneurs and small business owners attain success and financial security has made him a trusted expert in the field. He has helped countless individuals and businesses navigate the financial and business world with confidence.

                                                                          Worst investment ever

                                                                          Mark and his partner bought two properties in Arizona to turn into Airbnbs. They aimed to modify them over two to three months and set them up on the Airbnb platform. They hoped to start renting them out during the winter, which is a great Airbnb season. The first property was beautiful and simply needed yard furnishings.

                                                                          At the same time, 10 blocks away was the other property, which they thought would need some minor work, just like the first property. A few weeks later, they realized the property would take a ton of work, but the train had left the station, and there was no turning back. And so the damage began. The two partners added a lot of value to this property, but it was far more than they wanted to bite off and chew. Modifying the property took more time and money than expected.

                                                                          Lessons learned

                                                                          • You can make a good investment, and something outside your control happens.
                                                                          • Take ownership of what you’re doing wrong.
                                                                          • If a problem occurs, admit it, step up, and try to solve it—don’t run away or stick your head in the sand.
                                                                          
                                                                          

                                                                          Andrew’s takeaways

                                                                          • The majority of trouble we face in our lives will be caused by ourselves.
                                                                          • When you do something wrong, admit it to yourself as a first step.
                                                                          • If you cause damage to another person, you must amend and resolve it.
                                                                          • You can’t get help on something if you haven’t admitted it.
                                                                          • If your process is good and you keep improving, you progress.
                                                                          
                                                                          

                                                                          Actionable advice

                                                                          When you are pivoting in the face of a disaster or a bad investment, recognize that it’s not the end of the world, give yourself some grace, look for the silver lining, and get to work.

                                                                          Mark’s recommendations

                                                                          If you’re in the Airbnb market, Mark recommends reading Daniel Rusteen’s books. He also recommends his podcast, The Main Street Business Podcast, which has some great interviews about Main Street business and investing strategies.

                                                                          No.1 goal for the next 12 months

                                                                          Mark’s number one goal for the next 12 months is to dial in the Main Street business tax pro certification. He wants to have 1,000 members by the end of the year. These are 1,000 business owners, tax professionals, and legal and financial professionals looking for a group of like-minded individuals and tribes.

                                                                          Parting words

                                                                           

                                                                          “Don’t give up no matter what.”

                                                                          Mark Kohler

                                                                           

                                                                          [spp-transcript]

                                                                           

                                                                          Connect with Mark Kohler

                                                                          • LinkedIn
                                                                          • Twitter
                                                                          • Facebook
                                                                          • Instagram
                                                                          • Podcast
                                                                          • YouTube 
                                                                          • Website
                                                                          • Books
                                                                          
                                                                          

                                                                          Andrew’s books

                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                          • My Worst Investment Ever
                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                          
                                                                          

                                                                          Andrew’s online programs

                                                                          • Valuation Master Class
                                                                          • The Become a Better Investor Community
                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                          • Finance Made Ridiculously Simple
                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                          • Become a Great Presenter and Increase Your Influence
                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                          • Achieve Your Goals
                                                                          
                                                                          

                                                                          Connect with Andrew Stotz:

                                                                          • astotz.com
                                                                          • LinkedIn
                                                                          • Facebook
                                                                          • Instagram
                                                                          • Threads
                                                                          • Twitter
                                                                          • YouTube
                                                                          • My Worst Investment Ever Podcast
                                                                          
                                                                          ]]>7e0daed6-3c6d-41b2-8266-5da539c2a37aTue, 28 May 2024 06:00:00 +070035:28falsefullJusper Machogu - Africa Needs More Fossil Fuels Not AidBIO: Jusper Machogu is a farmer in rural Kenya, an agricultural engineer by profession, and an advocate for Fossil Fuels for Africa.

                                                                          STORY: In this episode of My Wost Podcast Ever, Andrew and Jusper discuss the potential of fossil fuels to drive economic growth and development in Africa.

                                                                          LEARNING: Africa needs more fossil fuels not aid.

                                                                           

                                                                          “60-70% of our population depends on agriculture for livelihood. So one of the easiest ways to improve livelihoods is to improve agriculture by having abundant, reliable energy rates.”

                                                                          Jusper Machogu

                                                                           

                                                                          Guest profile

                                                                          Jusper Machogu is a farmer in rural Kenya, an agricultural engineer by profession, and an advocate for Fossil Fuels for Africa.

                                                                          Why Africa needs fossil fuels

                                                                          In this episode of My Wost Podcast Ever, Andrew and Jusper discuss the potential of fossil fuels to drive economic growth and development in Africa. Jusper argued that reliable and affordable energy is crucial for progress. Jusper is all about economic development in Africa and wants Africans to have what the rest of the world has. He wants Africa to be able to feed itself, to have access to reliable, abundant energy, lots of food, and economic development.

                                                                          Jusper says that Africa needs lots of fossil fuels to achieve this, and Africans have plenty of them, so they don’t need much aid. What they need is investors in Africa. For instance, Africans can use fossil fuels to power their industries, such as manufacturing and agriculture, leading to job creation and economic growth. Africans can also use fossil fuels to generate electricity, which will improve access to energy and enhance productivity. These are just a few examples of how fossil fuels can be harnessed for African self-sufficiency and empowerment.

                                                                          Jusper emphasizes that once Africa utilizes nitrogenous fertilizer, it will not only produce more food but also significantly improve livelihoods and economic development. He points out that Africa has ample fossil fuels to produce the fertilizer it needs, underlining the importance of African self-sufficiency in this crucial development aspect.

                                                                          According to Jusper, another way Africa can attain economic development is by adding value to the food it produces and employing its people.

                                                                          Jusper sheds light on the detrimental influence of international organizations like the IMF and World Bank in African countries. He argues that their policies, instead of fostering development, have led to increased hunger and economic hardship. This stark reality underscores the urgent need for change and a shift in focus towards empowering Africans to drive their own development.

                                                                          Parting words

                                                                           

                                                                          “We don’t need a lot of aid. What we need is investors in Africa. Let’s drill our oil, tap into our natural gas, and mine our coal. Let’s use that to develop ourselves. So that’s what I’m saying: fossil fuels for Africa.”

                                                                          Jusper Machogu

                                                                           

                                                                          [spp-transcript]

                                                                           

                                                                          Connect with Jusper Machogu

                                                                          • Twitter
                                                                          • Substack
                                                                          
                                                                          

                                                                          Andrew’s books

                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                          • My Worst Investment Ever
                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                          
                                                                          

                                                                          Andrew’s online programs

                                                                          • Valuation Master Class
                                                                          • The Become a Better Investor Community
                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                          • Finance Made Ridiculously Simple
                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                          • Become a Great Presenter and Increase Your Influence
                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                          • Achieve Your Goals
                                                                          
                                                                          

                                                                          Connect with Andrew Stotz:

                                                                          • astotz.com
                                                                          • LinkedIn
                                                                          • Facebook
                                                                          • Instagram
                                                                          • Threads
                                                                          • Twitter
                                                                          • YouTube
                                                                          • My Worst Investment Ever Podcast
                                                                          
                                                                          ]]>BIO: Jusper Machogu is a farmer in rural Kenya, an agricultural engineer by profession, and an advocate for Fossil Fuels for Africa.

                                                                          STORY: In this episode of My Wost Podcast Ever, Andrew and Jusper discuss the potential of fossil fuels to drive economic growth and development in Africa.

                                                                          LEARNING: Africa needs more fossil fuels not aid.

                                                                           

                                                                          “60-70% of our population depends on agriculture for livelihood. So one of the easiest ways to improve livelihoods is to improve agriculture by having abundant, reliable energy rates.”

                                                                          Jusper Machogu

                                                                           

                                                                          Guest profile

                                                                          Jusper Machogu is a farmer in rural Kenya, an agricultural engineer by profession, and an advocate for Fossil Fuels for Africa.

                                                                          Why Africa needs fossil fuels

                                                                          In this episode of My Wost Podcast Ever, Andrew and Jusper discuss the potential of fossil fuels to drive economic growth and development in Africa. Jusper argued that reliable and affordable energy is crucial for progress. Jusper is all about economic development in Africa and wants Africans to have what the rest of the world has. He wants Africa to be able to feed itself, to have access to reliable, abundant energy, lots of food, and economic development.

                                                                          Jusper says that Africa needs lots of fossil fuels to achieve this, and Africans have plenty of them, so they don’t need much aid. What they need is investors in Africa. For instance, Africans can use fossil fuels to power their industries, such as manufacturing and agriculture, leading to job creation and economic growth. Africans can also use fossil fuels to generate electricity, which will improve access to energy and enhance productivity. These are just a few examples of how fossil fuels can be harnessed for African self-sufficiency and empowerment.

                                                                          Jusper emphasizes that once Africa utilizes nitrogenous fertilizer, it will not only produce more food but also significantly improve livelihoods and economic development. He points out that Africa has ample fossil fuels to produce the fertilizer it needs, underlining the importance of African self-sufficiency in this crucial development aspect.

                                                                          According to Jusper, another way Africa can attain economic development is by adding value to the food it produces and employing its people.

                                                                          Jusper sheds light on the detrimental influence of international organizations like the IMF and World Bank in African countries. He argues that their policies, instead of fostering development, have led to increased hunger and economic hardship. This stark reality underscores the urgent need for change and a shift in focus towards empowering Africans to drive their own development.

                                                                          Parting words

                                                                           

                                                                          “We don’t need a lot of aid. What we need is investors in Africa. Let’s drill our oil, tap into our natural gas, and mine our coal. Let’s use that to develop ourselves. So that’s what I’m saying: fossil fuels for Africa.”

                                                                          Jusper Machogu

                                                                           

                                                                          [spp-transcript]

                                                                           

                                                                          Connect with Jusper Machogu

                                                                          • Twitter
                                                                          • Substack
                                                                          
                                                                          

                                                                          Andrew’s books

                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                          • My Worst Investment Ever
                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                          
                                                                          

                                                                          Andrew’s online programs

                                                                          • Valuation Master Class
                                                                          • The Become a Better Investor Community
                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                          • Finance Made Ridiculously Simple
                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                          • Become a Great Presenter and Increase Your Influence
                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                          • Achieve Your Goals
                                                                          
                                                                          

                                                                          Connect with Andrew Stotz:

                                                                          • astotz.com
                                                                          • LinkedIn
                                                                          • Facebook
                                                                          • Instagram
                                                                          • Threads
                                                                          • Twitter
                                                                          • YouTube
                                                                          • My Worst Investment Ever Podcast
                                                                          
                                                                          ]]>37ed62d1-38ed-4011-b630-2ecfbb06a48cTue, 21 May 2024 06:00:00 +070041:39falsefullAugust Biniaz - Be a Specialist Not a Jack of All TradesBIO: August Biniaz is the Co-founder and Chief Investment Officer of CPI Capital. CPI Capital is a real estate private equity firm with the mandate to acquire multifamily assets while partnering with passive investors as limited partners.

                                                                          STORY: Upon looking back and reflecting on the worst investment decision August has ever made, he says it’s his time, shiny object syndrome, getting excited about new investment ideas, and then putting a lot of time into learning about those ideas and losing that time.

                                                                          LEARNING: Don’t be a jack of all trades and a master of none. Focus on your primary business. Stay in your lane.

                                                                           

                                                                          “Being focused is probably the greatest asset anyone could have when it comes to success in business or otherwise.”

                                                                          August Biniaz

                                                                           

                                                                          Guest profile

                                                                          August Biniaz is the Co-founder and Chief Investment Officer of CPI Capital. CPI Capital is a real estate private equity firm with the mandate to acquire multifamily assets while partnering with passive investors as limited partners. August was instrumental in the closing of over $208 million of multifamily assets since inception.

                                                                          August educates real estate investors through webinars, YouTube shows, weekly newsletters, and one-on-one coaching. He is the host of Real Estate Investing Demystified PodCast.

                                                                          Worst investment ever

                                                                          Upon looking back and reflecting on the worst investment decision August has ever made, he says it’s his time, shiny object syndrome, getting excited about new investment ideas, and then putting a lot of time into learning about those ideas and losing that time.

                                                                          In one incident, when crypto came around, August got involved in the crypto world, trying to connect with investors, creating businesses within the crypto world, and putting his brainpower and time into learning about this new asset class. However, August went down a rabbit hole that took him away from his main focus.

                                                                          In another incident, an asset class came across his desk. This was the build-to-rent single-family rentals or BTRSFR. After the great financial crisis in 2008, single-family homes in the US were selling for pennies on the dollar. Wall Street got involved, knowing that the market would eventually turn around, and started buying portfolios of single-family homes. However, as they managed these properties, they realized they were handled similarly to multifamily ones. So, they created this new asset class: build to rent single-family rentals.

                                                                          August brought this idea to investors in his database and invested in a development project. It was a former purchase contract in which August partnered with a developer. This deal created some difficulties for his investors, partners, and himself. He never closed on that deal. This deal diverted August’s focus from his main business, and he lost opportunities there.

                                                                          Lessons learned

                                                                          • Being a specialist is very important if you’re dealing with investors and have partners. Don’t be a jack of all trades and a master of none.
                                                                          • Focus on your primary business.
                                                                          • Stay in your lane.
                                                                          • Have tunnel vision in the business that you’re part of
                                                                          • Understand what’s happening in macro, economic, and political situations.
                                                                          
                                                                          

                                                                          Andrew’s takeaways

                                                                          When things aren’t working well, it’s apparent that you may need to find something else or double down on your efforts to fix them.

                                                                          Actionable advice

                                                                          If you’re in the process of building a business or you already own a great business, don’t put your attention and focus into something that’s totally outside of your sandbox. Instead, try to focus on that business you’re already building.

                                                                          August’s recommendations

                                                                          August recommends listening to the My Worst Investment Podcast, learning how entrepreneurship, startups, investing, and other asset classes work, watching YouTube shows, and reading books. He is happy to provide 30 minutes of his time if you quote the My Worst Investment Podcast.

                                                                          No.1 goal for the next 12 months

                                                                          August’s number one goal for the next 12 months is to hit his target of two deals in 2024. On the personal side, he’s moving to the US and setting up a base in Florida.

                                                                          Parting words

                                                                           

                                                                          “If you’re looking for risk-averse advice, talk to your parents. They’re always risk averse. And anytime you’re looking for risky advice, talk to your drunk friend.”

                                                                          August Biniaz

                                                                           

                                                                          [spp-transcript]

                                                                           

                                                                          Connect with August Biniaz

                                                                          • LinkedIn
                                                                          • Facebook
                                                                          • Twitter
                                                                          • Instagram
                                                                          • Podcast
                                                                          • YouTube
                                                                          • Website
                                                                          
                                                                          

                                                                          Andrew’s books

                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                          • My Worst Investment Ever
                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                          
                                                                          

                                                                          Andrew’s online programs

                                                                          • Valuation Master Class
                                                                          • The Become a Better Investor Community
                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                          • Finance Made Ridiculously Simple
                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                          • Become a Great Presenter and Increase Your Influence
                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                          • Achieve Your Goals
                                                                          
                                                                          

                                                                          Connect with Andrew Stotz:

                                                                          • astotz.com
                                                                          • LinkedIn
                                                                          • Facebook
                                                                          • Instagram
                                                                          • Threads
                                                                          • Twitter
                                                                          • YouTube
                                                                          • My Worst Investment Ever Podcast
                                                                          
                                                                          ]]>BIO: August Biniaz is the Co-founder and Chief Investment Officer of CPI Capital. CPI Capital is a real estate private equity firm with the mandate to acquire multifamily assets while partnering with passive investors as limited partners.

                                                                          STORY: Upon looking back and reflecting on the worst investment decision August has ever made, he says it’s his time, shiny object syndrome, getting excited about new investment ideas, and then putting a lot of time into learning about those ideas and losing that time.

                                                                          LEARNING: Don’t be a jack of all trades and a master of none. Focus on your primary business. Stay in your lane.

                                                                           

                                                                          “Being focused is probably the greatest asset anyone could have when it comes to success in business or otherwise.”

                                                                          August Biniaz

                                                                           

                                                                          Guest profile

                                                                          August Biniaz is the Co-founder and Chief Investment Officer of CPI Capital. CPI Capital is a real estate private equity firm with the mandate to acquire multifamily assets while partnering with passive investors as limited partners. August was instrumental in the closing of over $208 million of multifamily assets since inception.

                                                                          August educates real estate investors through webinars, YouTube shows, weekly newsletters, and one-on-one coaching. He is the host of Real Estate Investing Demystified PodCast.

                                                                          Worst investment ever

                                                                          Upon looking back and reflecting on the worst investment decision August has ever made, he says it’s his time, shiny object syndrome, getting excited about new investment ideas, and then putting a lot of time into learning about those ideas and losing that time.

                                                                          In one incident, when crypto came around, August got involved in the crypto world, trying to connect with investors, creating businesses within the crypto world, and putting his brainpower and time into learning about this new asset class. However, August went down a rabbit hole that took him away from his main focus.

                                                                          In another incident, an asset class came across his desk. This was the build-to-rent single-family rentals or BTRSFR. After the great financial crisis in 2008, single-family homes in the US were selling for pennies on the dollar. Wall Street got involved, knowing that the market would eventually turn around, and started buying portfolios of single-family homes. However, as they managed these properties, they realized they were handled similarly to multifamily ones. So, they created this new asset class: build to rent single-family rentals.

                                                                          August brought this idea to investors in his database and invested in a development project. It was a former purchase contract in which August partnered with a developer. This deal created some difficulties for his investors, partners, and himself. He never closed on that deal. This deal diverted August’s focus from his main business, and he lost opportunities there.

                                                                          Lessons learned

                                                                          • Being a specialist is very important if you’re dealing with investors and have partners. Don’t be a jack of all trades and a master of none.
                                                                          • Focus on your primary business.
                                                                          • Stay in your lane.
                                                                          • Have tunnel vision in the business that you’re part of
                                                                          • Understand what’s happening in macro, economic, and political situations.
                                                                          
                                                                          

                                                                          Andrew’s takeaways

                                                                          When things aren’t working well, it’s apparent that you may need to find something else or double down on your efforts to fix them.

                                                                          Actionable advice

                                                                          If you’re in the process of building a business or you already own a great business, don’t put your attention and focus into something that’s totally outside of your sandbox. Instead, try to focus on that business you’re already building.

                                                                          August’s recommendations

                                                                          August recommends listening to the My Worst Investment Podcast, learning how entrepreneurship, startups, investing, and other asset classes work, watching YouTube shows, and reading books. He is happy to provide 30 minutes of his time if you quote the My Worst Investment Podcast.

                                                                          No.1 goal for the next 12 months

                                                                          August’s number one goal for the next 12 months is to hit his target of two deals in 2024. On the personal side, he’s moving to the US and setting up a base in Florida.

                                                                          Parting words

                                                                           

                                                                          “If you’re looking for risk-averse advice, talk to your parents. They’re always risk averse. And anytime you’re looking for risky advice, talk to your drunk friend.”

                                                                          August Biniaz

                                                                           

                                                                          [spp-transcript]

                                                                           

                                                                          Connect with August Biniaz

                                                                          • LinkedIn
                                                                          • Facebook
                                                                          • Twitter
                                                                          • Instagram
                                                                          • Podcast
                                                                          • YouTube
                                                                          • Website
                                                                          
                                                                          

                                                                          Andrew’s books

                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                          • My Worst Investment Ever
                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                          
                                                                          

                                                                          Andrew’s online programs

                                                                          • Valuation Master Class
                                                                          • The Become a Better Investor Community
                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                          • Finance Made Ridiculously Simple
                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                          • Become a Great Presenter and Increase Your Influence
                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                          • Achieve Your Goals
                                                                          
                                                                          

                                                                          Connect with Andrew Stotz:

                                                                          • astotz.com
                                                                          • LinkedIn
                                                                          • Facebook
                                                                          • Instagram
                                                                          • Threads
                                                                          • Twitter
                                                                          • YouTube
                                                                          • My Worst Investment Ever Podcast
                                                                          
                                                                          ]]>a995e342-5eeb-405b-be4b-e0fccae01b08Tue, 14 May 2024 06:00:00 +070023:58falsefullWilliam Browder - Don’t Go to RussiaBIO: William Browder is the CEO of Hermitage Capital Management, Head of the Global Magnitsky Justice Campaign, and author of Red Notice and Freezing Order.

                                                                          STORY: Bill moved to Moscow at the age of 31 and was the only Westerner there with any Wall Street skills. That led him to become the largest foreign investor in the country. His decision to go to Russia was the worst investment of his life. Although Bill made a fortune for his clients and a smaller portion for himself, he wishes he never moved to Russia because a lot of people have died, and a lot of lives have been ruined.

                                                                          LEARNING: Don’t go to Russia.

                                                                           

                                                                          “My friend Vladimir is the second most important political prisoner in Russia, and I’m desperately trying to get them out. Hopefully, I’ll succeed.”

                                                                          William Browder

                                                                           

                                                                          Guest profile

                                                                          William Browder is the CEO of Hermitage Capital Management, Head of the Global Magnitsky Justice Campaign, and author of Red Notice and Freezing Order. 

                                                                          Bill was once Russia’s largest foreign portfolio investor until being declared “a threat to national security” in 2005 for exposing corruption in Russian state-owned companies.

                                                                          In 2008, Mr. Browder’s lawyer, Sergei Magnitsky, uncovered a massive fraud committed by Russian government officials stealing US$230 million of state taxes and was subsequently arrested, imprisoned without trial, and systematically tortured.

                                                                          Sergei Magnitsky died in prison on November 16, 2009. Ever since, Bill Browder has led the Global Magnitsky Campaign for governments around the world to impose targeted visa bans and asset freezes on human rights abusers and highly corrupt officials, introducing the passage of the Sergei Magnitsky Accountability Act in 2012, & the Global Magnitsky Human Rights Accountability Act 2016. Which has since been adopted by 11 countries, including the USA, UK, Canada, and New Zealand.

                                                                          Worst investment ever

                                                                          During his teenage rebellion, Bill faced a unique challenge, how to rebel from a family of communists. Undeterred, he hatched a daring plan to don a suit and tie and embrace capitalism. His graduation from Stanford Business School in 1989 coincided with the fall of the Berlin Wall, a moment that sparked a profound realization. With his grandfather’s communist legacy and the Berlin Wall’s collapse, Bill set his sights on an audacious goal to become the leading capitalist in Eastern Europe.

                                                                          Bill aimed to become the largest investor in that part of the world. He eventually achieved that goal at the very young age of 25. Bill discovered the Russian privatization program, which basically gave everything away for free.

                                                                          Bill moved to Moscow at the age of 31 in 1986, and he was the only Westerner there with any Wall Street skills. That led him to become the largest foreign investor in the country.

                                                                          While initially lucrative, Bill’s decision to move to Russia proved to be a double-edged sword. He made a fortune for his clients and a smaller portion for himself, but the cost was high. Lives were lost, and many were left in ruins. Bill reflects on this, considering it the worst investment of his life.

                                                                          Lessons learned

                                                                          • There are two choices for people who want to rebuild Russia: You can either go back and become part of the criminal enterprise or don’t go back. If you go back and try to fix it, you’ll become an enemy of the regime and go to jail. So, you can either become imprisoned or become a criminal. Better avoid the whole thing.
                                                                          
                                                                          

                                                                          Andrew’s takeaways

                                                                          • Most people go along with whatever’s happening without even questioning it, and the ones who question it leave it and keep going.
                                                                          
                                                                          

                                                                          No.1 goal for the next 12 months

                                                                          Bill’s number one goal for the next 12 months is to get his friend Vladimir Kara Mirza out of prison before he dies.

                                                                          Parting words

                                                                           

                                                                          “Don’t go to Russia.”

                                                                          William Browder

                                                                           

                                                                          [spp-transcript]

                                                                           

                                                                          Connect with William Browder

                                                                          • LinkedIn
                                                                          • Twitter 
                                                                          • Website
                                                                          
                                                                          

                                                                          Andrew’s books

                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                          • My Worst Investment Ever
                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                          
                                                                          

                                                                          Andrew’s online programs

                                                                          • Valuation Master Class
                                                                          • The Become a Better Investor Community
                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                          • Finance Made Ridiculously Simple
                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                          • Become a Great Presenter and Increase Your Influence
                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                          • Achieve Your Goals
                                                                          
                                                                          

                                                                          Connect with Andrew Stotz:

                                                                          • astotz.com
                                                                          • LinkedIn
                                                                          • Facebook
                                                                          • Instagram
                                                                          • Threads
                                                                          • Twitter
                                                                          • YouTube
                                                                          • My Worst Investment Ever Podcast
                                                                          
                                                                          ]]>BIO: William Browder is the CEO of Hermitage Capital Management, Head of the Global Magnitsky Justice Campaign, and author of Red Notice and Freezing Order.

                                                                          STORY: Bill moved to Moscow at the age of 31 and was the only Westerner there with any Wall Street skills. That led him to become the largest foreign investor in the country. His decision to go to Russia was the worst investment of his life. Although Bill made a fortune for his clients and a smaller portion for himself, he wishes he never moved to Russia because a lot of people have died, and a lot of lives have been ruined.

                                                                          LEARNING: Don’t go to Russia.

                                                                           

                                                                          “My friend Vladimir is the second most important political prisoner in Russia, and I’m desperately trying to get them out. Hopefully, I’ll succeed.”

                                                                          William Browder

                                                                           

                                                                          Guest profile

                                                                          William Browder is the CEO of Hermitage Capital Management, Head of the Global Magnitsky Justice Campaign, and author of Red Notice and Freezing Order. 

                                                                          Bill was once Russia’s largest foreign portfolio investor until being declared “a threat to national security” in 2005 for exposing corruption in Russian state-owned companies.

                                                                          In 2008, Mr. Browder’s lawyer, Sergei Magnitsky, uncovered a massive fraud committed by Russian government officials stealing US$230 million of state taxes and was subsequently arrested, imprisoned without trial, and systematically tortured.

                                                                          Sergei Magnitsky died in prison on November 16, 2009. Ever since, Bill Browder has led the Global Magnitsky Campaign for governments around the world to impose targeted visa bans and asset freezes on human rights abusers and highly corrupt officials, introducing the passage of the Sergei Magnitsky Accountability Act in 2012, & the Global Magnitsky Human Rights Accountability Act 2016. Which has since been adopted by 11 countries, including the USA, UK, Canada, and New Zealand.

                                                                          Worst investment ever

                                                                          During his teenage rebellion, Bill faced a unique challenge, how to rebel from a family of communists. Undeterred, he hatched a daring plan to don a suit and tie and embrace capitalism. His graduation from Stanford Business School in 1989 coincided with the fall of the Berlin Wall, a moment that sparked a profound realization. With his grandfather’s communist legacy and the Berlin Wall’s collapse, Bill set his sights on an audacious goal to become the leading capitalist in Eastern Europe.

                                                                          Bill aimed to become the largest investor in that part of the world. He eventually achieved that goal at the very young age of 25. Bill discovered the Russian privatization program, which basically gave everything away for free.

                                                                          Bill moved to Moscow at the age of 31 in 1986, and he was the only Westerner there with any Wall Street skills. That led him to become the largest foreign investor in the country.

                                                                          While initially lucrative, Bill’s decision to move to Russia proved to be a double-edged sword. He made a fortune for his clients and a smaller portion for himself, but the cost was high. Lives were lost, and many were left in ruins. Bill reflects on this, considering it the worst investment of his life.

                                                                          Lessons learned

                                                                          • There are two choices for people who want to rebuild Russia: You can either go back and become part of the criminal enterprise or don’t go back. If you go back and try to fix it, you’ll become an enemy of the regime and go to jail. So, you can either become imprisoned or become a criminal. Better avoid the whole thing.
                                                                          
                                                                          

                                                                          Andrew’s takeaways

                                                                          • Most people go along with whatever’s happening without even questioning it, and the ones who question it leave it and keep going.
                                                                          
                                                                          

                                                                          No.1 goal for the next 12 months

                                                                          Bill’s number one goal for the next 12 months is to get his friend Vladimir Kara Mirza out of prison before he dies.

                                                                          Parting words

                                                                           

                                                                          “Don’t go to Russia.”

                                                                          William Browder

                                                                           

                                                                          [spp-transcript]

                                                                           

                                                                          Connect with William Browder

                                                                          • LinkedIn
                                                                          • Twitter 
                                                                          • Website
                                                                          
                                                                          

                                                                          Andrew’s books

                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                          • My Worst Investment Ever
                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                          
                                                                          

                                                                          Andrew’s online programs

                                                                          • Valuation Master Class
                                                                          • The Become a Better Investor Community
                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                          • Finance Made Ridiculously Simple
                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                          • Become a Great Presenter and Increase Your Influence
                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                          • Achieve Your Goals
                                                                          
                                                                          

                                                                          Connect with Andrew Stotz:

                                                                          • astotz.com
                                                                          • LinkedIn
                                                                          • Facebook
                                                                          • Instagram
                                                                          • Threads
                                                                          • Twitter
                                                                          • YouTube
                                                                          • My Worst Investment Ever Podcast
                                                                          
                                                                          ]]>387da2e0-5287-4edc-8a38-e1415d830a4bWed, 08 May 2024 06:00:00 +070035:03falsefullISMS 41: Larry Swedroe – Focus on Managing Risk Not ReturnsIn this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Today, they discuss three chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this series, they discuss mistake number 32: Are You Subject to the Money Illusion? Mistake 33: Do You Believe Demographics Are Destiny? And mistake 34: Do You Follow a Prudent Process When Choosing a Financial Advisory Firm?

                                                                          LEARNING: Understand how the money illusion works to avoid making financial mistakes. Focus on managing risk and not trying to manage returns. Past performance is meaningless for active managers.

                                                                           

                                                                          “What amazes me is that I can’t think of anybody who has ever asked the advisor to show them how they invest personally. That’s an absolute necessity because if they’re not putting their money where their mouth is and eating their own cooking, why should you?”

                                                                          Larry Swedroe

                                                                           

                                                                          In this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Larry is the head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                          Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss three chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this series, they discuss mistake number 32: Are You Subject to the Money Illusion? Mistake 33: Do You Believe Demographics Are Destiny? And mistake 34: Do You Follow a Prudent Process When Choosing a Financial Advisory Firm?

                                                                          Mistake number 32: Are You Subject to the Money Illusion?

                                                                          According to Larry, one of the illusions with great potential for creating investment mistakes is the money illusion. Money illusion occurs when people confuse inflation returns, nominal or real returns, and how the economy is impacted differently. It has great potential for creating mistakes because it relates to one of the most popular indicators used by investors to determine if the market is undervalued or overvalued, known as the Fed Model.

                                                                          The problem with the Fed Model, leading to a false conclusion, is that it fails to consider that inflation has a different impact on corporate earnings than it does on the return on fixed-income instruments. Over the long term, the nominal growth rate of corporate earnings has been in line with the economy’s nominal growth rate, and the real growth rate of corporate earnings has been in line with the economy’s real growth. Thus, the real growth rate of earnings is not impacted by inflation in the long term. On the other hand, the yield to maturity on a 10-year bond is a nominal return, and, therefore, the real return on the bond will be negatively impacted by inflation. The error of comparing a number that is not impacted by inflation to one that is leads to the “money illusion.”

                                                                          Larry says the empirical evidence and logic are pretty simple: Corporate earnings grow in line with the GDP. If they grew much faster, they would dominate the whole economy, and there’d be nothing left for wages.

                                                                          While gaining knowledge of how a magical illusion works has the negative effect of ruining the illusion, understanding the “magic” of financial illusions is beneficial to investors as it should help them avoid mistakes. In the case of the money illusion, understanding how the money illusion is created will prevent investors from believing that an environment of low (high) interest rates allows for either high (low) valuations or for high (low) future stock returns. Instead, if the current level of prices is high (a high P/E ratio), that should lead one to conclude that future returns to equities are likely to be lower than has historically been the case and vice versa. It is also important to note that this does not mean that investors should either avoid equities because they are “overvalued” or increase their allocations because they are “undervalued.” It simply means that if the P/E is higher than the historical average, investors should not expect future returns to be as great as their historical average.

                                                                          Mistake number 33: Do You Believe Demographics Are Destiny?

                                                                          Unlike economic forecasting, demographic forecasting can be considered a science. It’s for this reason that Larry cautions investors to avoid the mistake of confusing information with value-added information. He says before leaping to invest in individual stocks or mutual funds based on any guru’s insightful analysis, investors need to consider the following:

                                                                          • Is this guru the only person who knows the demand for health care—for example—will rise as the population ages?
                                                                          • Aren’t all investors aware of this? Doesn’t the market already incorporate this knowledge into current prices?
                                                                          • If the market is aware of this information, it has already been incorporated into prices. Therefore, the knowledge cannot be exploited. In other words, if it’s just information—even if you think it’s going to have a positive or negative impact—ask yourself again, am I the only one who knows this?
                                                                          
                                                                          

                                                                          Larry adds that you should never confuse information with knowledge. Possession of an insight is not sufficient. You can only benefit if other traders do not have the insight yet. And if you have such information, it is highly likely to be inside information, which is illegal to trade.

                                                                          The vast majority of individuals and professional investors make investment decisions based on their forecasts, ignoring all the evidence that there are no good forecasters. Larry’s advice is to stop trying to forecast and, instead, think about what risks you’re most concerned about. So if you’re most concerned about, let’s say, inflation because you live on a fixed income, then you need to build a portfolio that’s more resilient to inflation risks. So don’t own long-term bonds in your portfolio; keep short-term bonds, have a bit of commodities, and maybe even a bit of gold. This way, you don’t confuse before-the-fact strategy with after-the-fact outcomes because you’ve designed a portfolio to protect you against the risks you are concerned about, not what somebody else is. People must focus on managing risk and not trying to manage returns.

                                                                          Mistake number 34: Do You Follow a Prudent Process When Choosing a Financial Advisory Firm?

                                                                          Larry observes that one big problem for investors when choosing advisors is that they typically look at somebody’s track record in investing and project that into the future, ignoring all of the evidence that past performance is (for active managers) meaningless.

                                                                          Larry recommends you require potential financial advisory firms to make the following 11 commitments to you. Doing so will allow you to avoid conflicts of interest and achieve your financial goals.

                                                                          1. Our guiding principle is that our advice will always be in your best interest.
                                                                          2. We provide you with care following a fiduciary standard — the highest legal duty that one party can have to another.
                                                                          3. We are a fee-only investment advisor — avoiding the conflicts that commissioned-based compensation can create.
                                                                          4. We fully disclose potential conflicts.
                                                                          5. Our advice is based on the latest academic research, not on our opinions.
                                                                          6. We are client-centric—we don’t sell any products; we only advise.
                                                                          7. We provide a high level of personal attention — each client works with a team of professionals and will develop strong personal relationships with team members.
                                                                          8. We invest our personal assets, including our profit-sharing plan, based on the same investment principles and in the same or comparable securities that we recommend to our clients.
                                                                          9. We will develop an investment plan that is integrated into estate, tax, and risk management (insurance) plans. The overall plan will be tailored to your unique situation.
                                                                          10. Our advice is always goal-oriented—evaluating each decision not in isolation but in terms of its impact on the likelihood of success of the overall plan.
                                                                          11. Our comprehensive wealth management services are provided by individuals who have the CFP, PFS, or other comparable designations.
                                                                          
                                                                          

                                                                          If you can’t get all 11 of those points, Larry insists you simply walk out the door.

                                                                          Did you miss out on previous mistakes? Check them out:

                                                                          • ISMS 8: Larry Swedroe – Are You Overconfident in Your Skills?
                                                                          • ISMS 17: Larry Swedroe – Do You Project Recent Trends Indefinitely Into the Future?
                                                                          • ISMS 20: Larry Swedroe – Do You Extrapolate From Small Samples and Trust Your Intuition?
                                                                          • “What amazes me is that I can’t think of anybody who has ever asked the advisor to show them how they invest personally. That’s an absolute necessity because if they’re not putting their money where their mouth is and eating their own cooking, why should you?”

                                                                            Larry Swedroe

                                                                             

                                                                            In this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Larry is the head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                            Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss three chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this series, they discuss mistake number 32: Are You Subject to the Money Illusion? Mistake 33: Do You Believe Demographics Are Destiny? And mistake 34: Do You Follow a Prudent Process When Choosing a Financial Advisory Firm?

                                                                            Mistake number 32: Are You Subject to the Money Illusion?

                                                                            According to Larry, one of the illusions with great potential for creating investment mistakes is the money illusion. Money illusion occurs when people confuse inflation returns, nominal or real returns, and how the economy is impacted differently. It has great potential for creating mistakes because it relates to one of the most popular indicators used by investors to determine if the market is undervalued or overvalued, known as the Fed Model.

                                                                            The problem with the Fed Model, leading to a false conclusion, is that it fails to consider that inflation has a different impact on corporate earnings than it does on the return on fixed-income instruments. Over the long term, the nominal growth rate of corporate earnings has been in line with the economy’s nominal growth rate, and the real growth rate of corporate earnings has been in line with the economy’s real growth. Thus, the real growth rate of earnings is not impacted by inflation in the long term. On the other hand, the yield to maturity on a 10-year bond is a nominal return, and, therefore, the real return on the bond will be negatively impacted by inflation. The error of comparing a number that is not impacted by inflation to one that is leads to the “money illusion.”

                                                                            Larry says the empirical evidence and logic are pretty simple: Corporate earnings grow in line with the GDP. If they grew much faster, they would dominate the whole economy, and there’d be nothing left for wages.

                                                                            While gaining knowledge of how a magical illusion works has the negative effect of ruining the illusion, understanding the “magic” of financial illusions is beneficial to investors as it should help them avoid mistakes. In the case of the money illusion, understanding how the money illusion is created will prevent investors from believing that an environment of low (high) interest rates allows for either high (low) valuations or for high (low) future stock returns. Instead, if the current level of prices is high (a high P/E ratio), that should lead one to conclude that future returns to equities are likely to be lower than has historically been the case and vice versa. It is also important to note that this does not mean that investors should either avoid equities because they are “overvalued” or increase their allocations because they are “undervalued.” It simply means that if the P/E is higher than the historical average, investors should not expect future returns to be as great as their historical average.

                                                                            Mistake number 33: Do You Believe Demographics Are Destiny?

                                                                            Unlike economic forecasting, demographic forecasting can be considered a science. It’s for this reason that Larry cautions investors to avoid the mistake of confusing information with value-added information. He says before leaping to invest in individual stocks or mutual funds based on any guru’s insightful analysis, investors need to consider the following:

                                                                            • Is this guru the only person who knows the demand for health care—for example—will rise as the population ages?
                                                                            • Aren’t all investors aware of this? Doesn’t the market already incorporate this knowledge into current prices?
                                                                            • If the market is aware of this information, it has already been incorporated into prices. Therefore, the knowledge cannot be exploited. In other words, if it’s just information—even if you think it’s going to have a positive or negative impact—ask yourself again, am I the only one who knows this?
                                                                            
                                                                            

                                                                            Larry adds that you should never confuse information with knowledge. Possession of an insight is not sufficient. You can only benefit if other traders do not have the insight yet. And if you have such information, it is highly likely to be inside information, which is illegal to trade.

                                                                            The vast majority of individuals and professional investors make investment decisions based on their forecasts, ignoring all the evidence that there are no good forecasters. Larry’s advice is to stop trying to forecast and, instead, think about what risks you’re most concerned about. So if you’re most concerned about, let’s say, inflation because you live on a fixed income, then you need to build a portfolio that’s more resilient to inflation risks. So don’t own long-term bonds in your portfolio; keep short-term bonds, have a bit of commodities, and maybe even a bit of gold. This way, you don’t confuse before-the-fact strategy with after-the-fact outcomes because you’ve designed a portfolio to protect you against the risks you are concerned about, not what somebody else is. People must focus on managing risk and not trying to manage returns.

                                                                            Mistake number 34: Do You Follow a Prudent Process When Choosing a Financial Advisory Firm?

                                                                            Larry observes that one big problem for investors when choosing advisors is that they typically look at somebody’s track record in investing and project that into the future, ignoring all of the evidence that past performance is (for active managers) meaningless.

                                                                            Larry recommends you require potential financial advisory firms to make the following 11 commitments to you. Doing so will allow you to avoid conflicts of interest and achieve your financial goals.

                                                                            1. Our guiding principle is that our advice will always be in your best interest.
                                                                            2. We provide you with care following a fiduciary standard — the highest legal duty that one party can have to another.
                                                                            3. We are a fee-only investment advisor — avoiding the conflicts that commissioned-based compensation can create.
                                                                            4. We fully disclose potential conflicts.
                                                                            5. Our advice is based on the latest academic research, not on our opinions.
                                                                            6. We are client-centric—we don’t sell any products; we only advise.
                                                                            7. We provide a high level of personal attention — each client works with a team of professionals and will develop strong personal relationships with team members.
                                                                            8. We invest our personal assets, including our profit-sharing plan, based on the same investment principles and in the same or comparable securities that we recommend to our clients.
                                                                            9. We will develop an investment plan that is integrated into estate, tax, and risk management (insurance) plans. The overall plan will be tailored to your unique situation.
                                                                            10. Our advice is always goal-oriented—evaluating each decision not in isolation but in terms of its impact on the likelihood of success of the overall plan.
                                                                            11. Our comprehensive wealth management services are provided by individuals who have the CFP, PFS, or other comparable designations.
                                                                            
                                                                            

                                                                            If you can’t get all 11 of those points, Larry insists you simply walk out the door.

                                                                            Did you miss out on previous mistakes? Check them out:

                                                                            • ISMS 8: Larry Swedroe – Are You Overconfident in Your Skills?
                                                                            • ISMS 17: Larry Swedroe – Do You Project Recent Trends Indefinitely Into the Future?
                                                                            • ISMS 20: Larry Swedroe – Do You Extrapolate From Small Samples and Trust Your Intuition?
                                                                            • ISMS 23: Larry Swedroe – Do You Allow Yourself to Be Influenced by Your Ego and Herd Mentality?
                                                                            • ISMS 24: Larry Swedroe – Confusing Skill and Luck Can Stop You From Investing Wisely
                                                                            • ISMS 25: Larry Swedroe – Admit Your Mistakes and Don’t Listen to Fake Experts
                                                                            • ISMS 26: Larry Swedroe – Are You Subject to the Endowment Effect or the Hot Streak Fallacy?
                                                                            • ISMS 27: Larry Swedroe – Familiar Doesn’t Make It Safe and You’re Not Playing With the House’s Money
                                                                            • ISMS 29: Larry Swedroe – The Shiny Apple is Poisonous and Information is Not Knowledge
                                                                            • ISMS 30: Larry Swedroe – Do You Believe Your Fortune Is in the Stars or Rely on Misleading Information?
                                                                            • ISMS 34: Larry Swedroe – Consider All Hidden Costs Before You Invest
                                                                            • ISMS 35: Larry Swedroe – Great Companies Are Not Always High-Return Investments
                                                                            • ISMS 36: Larry Swedroe – Two Heads Are Not Better Than One When Investing
                                                                            • ISMS 37: Larry Swedroe – Pay Attention to a Fund’s Proper Benchmarks and Taxes
                                                                            • ISMS 38: Larry Swedroe – The Self-healing Mechanism of Risk Assets
                                                                            • ISMS 39: Larry Swedroe – Don’t Choose a Fund by Its Descriptive Name
                                                                            • ISMS 40: Larry Swedroe – Market vs. Hedge Fund Managers’ Efficiency
                                                                            
                                                                            

                                                                            About Larry Swedroe

                                                                            Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                            Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                            Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                            Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                             

                                                                            [spp-transcript]

                                                                             

                                                                            Connect with Larry Swedroe

                                                                            • LinkedIn
                                                                            • Twitter
                                                                            • Website
                                                                            • Books
                                                                            
                                                                            

                                                                            Andrew’s books

                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                            • My Worst Investment Ever
                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                            
                                                                            

                                                                            Andrew’s online programs

                                                                            • Valuation Master Class
                                                                            • The Become a Better Investor Community
                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                            • Finance Made Ridiculously Simple
                                                                            • FVMR Investing: Quantamental Investing Across the World
                                                                            • Become a Great Presenter and Increase Your Influence
                                                                            • Transform Your Business with Dr. Deming’s 14 Points
                                                                            • Achieve Your Goals
                                                                            
                                                                            

                                                                            Connect with Andrew Stotz:

                                                                            • astotz.com
                                                                            • LinkedIn
                                                                            • Facebook
                                                                            • Instagram
                                                                            • Twitter
                                                                            • YouTube
                                                                            • My Worst Investment Ever Podcast
                                                                            
                                                                            

                                                                            Further reading mentioned

                                                                            • Larry Swedroe and RC Balaban, Investment Mistakes Even Smart Investors Make and How to Avoid Them
                                                                            • Philip E. Tetlock, Expert Political Judgment: How Good Is It? How Can We Know?
                                                                            • Gary Belsky and Thomas Gilovich, Why Smart People Make Big Money Mistakes and How to Correct Them: Lessons from the Life-Changing Science of Behavioral Economics
                                                                            • Larry Swedroe, Think, Act, and Invest Like Warren Buffett: The Winning Strategy to Help You Achieve Your Financial and Life Goals
                                                                            • Larry Swedroe and Kevin Grogan, Reducing the Risk of Black Swans: Using the Science of Investing to Capture Returns with Less Volatility
                                                                            
                                                                            ]]>0c290565-8dd3-43f8-a5ac-94002ec82104Tue, 30 Apr 2024 06:00:00 +070034:23falsefullChris Ball - If They’re Not 100% Right, Don’t Hire ThemBIO: Chris Ball started his career in 2004 as a tax adviser with KPMG LLP. He then transitioned and founded Hoxton Capital Management in 2018. The group’s sole emphasis is helping HNW and UHNW clients with borderless global financial advice. Chris’ specialty is assisting individuals with their retirement planning needs.

                                                                            STORY: When Chris started his career young and fresh, he got into spread betting. That didn’t go so well, and he lost 10,000 pounds, which was a lot of money in 2008. In terms of business, he wasted over $750,000 on bad hiring decisions.

                                                                            LEARNING: Don’t enter markets that you don’t understand. If someone is not 100% right, don’t hire them.

                                                                             

                                                                            “Hire and fire fast. If they’re not right, and you spot it, don’t keep giving people chance after chance or trying to fit a round peg into a square hole, which doesn’t work.”

                                                                            Chris Ball

                                                                             

                                                                            Guest profile

                                                                            Chris Ball started his career in 2004 as a tax adviser with KPMG LLP. After seven years with KPMG, Chris moved to the Middle East to join the deVere Group, where he continued his work as an IFA. He started in their Abu Dhabi offices and eventually headed up the Qatar operations for the group, which dealt with HNW and UHNW individuals.

                                                                            Chris then transitioned and founded Hoxton Capital Management in 2018. The group’s sole emphasis is helping HNW and UHNW clients with borderless global financial advice. Chris’ specialty is assisting individuals with their retirement planning needs.

                                                                            Chris has three children with his wife.

                                                                            Worst investment ever

                                                                            When Chris started his career young and fresh, he got into spread betting. That didn’t go so well, and he lost 10,000 pounds, which was a lot of money in 2008. In terms of business, he wasted over $750,000 on bad hiring decisions.

                                                                            Lessons learned

                                                                            • Don’t enter markets that you don’t understand.
                                                                            • If someone is not 100% right, don’t hire them.
                                                                            • Playing at things never produces good results. You have to be 100% dedicated and focused on your work.
                                                                            
                                                                            

                                                                            Actionable advice

                                                                            Hire and fire quickly. If someone is not suitable and you spot it, fire immediately. Don’t keep giving people a chance after chance.

                                                                            Chris’s recommendations

                                                                            Chris recommends using his recently launched Hoxton Wealth App, available on iTunes, Apple App Store, Google Store, and the company’s website. It’s completely free. The app enables people with accounts in different countries to live link those accounts and view them in a currency of their choice. It also has cash flow modeling, which enables people to see if they have enough money saved for various goals.

                                                                            No.1 goal for the next 12 months

                                                                            Chris’s number one goal for the next 12 months is to launch a wealth app and attract 100,000 users.

                                                                            Parting words

                                                                             

                                                                            “Thank you very much for having me on. I really enjoyed it, and I wish you all the best.”

                                                                            Chris Ball

                                                                             

                                                                            [spp-transcript]

                                                                             

                                                                            Connect with Chris Ball

                                                                            • LinkedIn
                                                                            • Facebook
                                                                            • Website
                                                                            
                                                                            

                                                                            Andrew’s books

                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                            • My Worst Investment Ever
                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                            
                                                                            

                                                                            Andrew’s online programs

                                                                            • Valuation Master Class
                                                                            • The Become a Better Investor Community
                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                            • Finance Made Ridiculously Simple
                                                                            • FVMR Investing: Quantamental Investing Across the World
                                                                            • Become a Great Presenter and Increase Your Influence
                                                                            • Transform Your Business with Dr. Deming’s 14 Points
                                                                            • Achieve Your Goals
                                                                            
                                                                            

                                                                            Connect with Andrew Stotz:

                                                                            • astotz.com
                                                                            • LinkedIn
                                                                            • Facebook
                                                                            • Instagram
                                                                            • Threads
                                                                            • Twitter
                                                                            • YouTube
                                                                            • My Worst Investment Ever Podcast
                                                                            
                                                                            ]]>BIO: Chris Ball started his career in 2004 as a tax adviser with KPMG LLP. He then transitioned and founded Hoxton Capital Management in 2018. The group’s sole emphasis is helping HNW and UHNW clients with borderless global financial advice. Chris’ specialty is assisting individuals with their retirement planning needs.

                                                                            STORY: When Chris started his career young and fresh, he got into spread betting. That didn’t go so well, and he lost 10,000 pounds, which was a lot of money in 2008. In terms of business, he wasted over $750,000 on bad hiring decisions.

                                                                            LEARNING: Don’t enter markets that you don’t understand. If someone is not 100% right, don’t hire them.

                                                                             

                                                                            “Hire and fire fast. If they’re not right, and you spot it, don’t keep giving people chance after chance or trying to fit a round peg into a square hole, which doesn’t work.”

                                                                            Chris Ball

                                                                             

                                                                            Guest profile

                                                                            Chris Ball started his career in 2004 as a tax adviser with KPMG LLP. After seven years with KPMG, Chris moved to the Middle East to join the deVere Group, where he continued his work as an IFA. He started in their Abu Dhabi offices and eventually headed up the Qatar operations for the group, which dealt with HNW and UHNW individuals.

                                                                            Chris then transitioned and founded Hoxton Capital Management in 2018. The group’s sole emphasis is helping HNW and UHNW clients with borderless global financial advice. Chris’ specialty is assisting individuals with their retirement planning needs.

                                                                            Chris has three children with his wife.

                                                                            Worst investment ever

                                                                            When Chris started his career young and fresh, he got into spread betting. That didn’t go so well, and he lost 10,000 pounds, which was a lot of money in 2008. In terms of business, he wasted over $750,000 on bad hiring decisions.

                                                                            Lessons learned

                                                                            • Don’t enter markets that you don’t understand.
                                                                            • If someone is not 100% right, don’t hire them.
                                                                            • Playing at things never produces good results. You have to be 100% dedicated and focused on your work.
                                                                            
                                                                            

                                                                            Actionable advice

                                                                            Hire and fire quickly. If someone is not suitable and you spot it, fire immediately. Don’t keep giving people a chance after chance.

                                                                            Chris’s recommendations

                                                                            Chris recommends using his recently launched Hoxton Wealth App, available on iTunes, Apple App Store, Google Store, and the company’s website. It’s completely free. The app enables people with accounts in different countries to live link those accounts and view them in a currency of their choice. It also has cash flow modeling, which enables people to see if they have enough money saved for various goals.

                                                                            No.1 goal for the next 12 months

                                                                            Chris’s number one goal for the next 12 months is to launch a wealth app and attract 100,000 users.

                                                                            Parting words

                                                                             

                                                                            “Thank you very much for having me on. I really enjoyed it, and I wish you all the best.”

                                                                            Chris Ball

                                                                             

                                                                            [spp-transcript]

                                                                             

                                                                            Connect with Chris Ball

                                                                            • LinkedIn
                                                                            • Facebook
                                                                            • Website
                                                                            
                                                                            

                                                                            Andrew’s books

                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                            • My Worst Investment Ever
                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                            
                                                                            

                                                                            Andrew’s online programs

                                                                            • Valuation Master Class
                                                                            • The Become a Better Investor Community
                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                            • Finance Made Ridiculously Simple
                                                                            • FVMR Investing: Quantamental Investing Across the World
                                                                            • Become a Great Presenter and Increase Your Influence
                                                                            • Transform Your Business with Dr. Deming’s 14 Points
                                                                            • Achieve Your Goals
                                                                            
                                                                            

                                                                            Connect with Andrew Stotz:

                                                                            • astotz.com
                                                                            • LinkedIn
                                                                            • Facebook
                                                                            • Instagram
                                                                            • Threads
                                                                            • Twitter
                                                                            • YouTube
                                                                            • My Worst Investment Ever Podcast
                                                                            
                                                                            ]]>01cae94c-aba9-43ad-9a9a-fb7e436d0d23Tue, 23 Apr 2024 06:00:00 +070016:59falsefullVivek Raina - Nobody Can Beat You at What You’re Good AtBIO: Vivek Raina is a seasoned veteran with over two decades of experience in the broadband industry. As the CEO and Co-Founder of Excitel, he leads the mission to connect BHARAT, propelling the company to the top three ISPs in India—a remarkable feat in just eight years.

                                                                            STORY: Vivek spent 10 years finding an investor to fund his business idea. He wishes he had spent these years advancing his corporate career.

                                                                            LEARNING: Working for somebody is fragile. Every failure teaches you something and makes you a better version of yourself. Do something you’re passionate about.

                                                                             

                                                                            “In entrepreneurship, every failure teaches you something. It makes you stronger and better in doing what you’re doing.”

                                                                            Vivek Raina

                                                                             

                                                                            Guest profile

                                                                            Vivek Raina is a seasoned veteran with over two decades of experience in the broadband industry. As the CEO and Co-Founder of Excitel, he leads the mission to connect BHARAT, propelling the company to the top three ISPs in India—a remarkable feat in just eight years. With a million subscribers spanning 55+ cities, Vivek’s leadership has revolutionized lives through pioneering unlimited internet broadband.

                                                                            Vivek hails from Kashmir and is now based in Delhi. His journey includes impactful roles at Hathway, Reliance, and Pacenet, highlighting his exceptional leadership skills.

                                                                            Worst investment ever

                                                                            Within two years of employment, Vivek had decided he would not stay employed—he would do something independently. Vivek started showing his ideas to people, hoping that someone would be interested in funding him. Some of the ideas were really bad, while others were good. Vivek didn’t manage to get an investor. Most people would offer him a salary or some incentives to work with him. It took Vivek 10 years to convince somebody to invest money in his idea. It took another three years to convince them to start a company, and in 2014, he got his first investment.

                                                                            Vivek considers the 10 years he spent making this foundation his worst investment ever because if he had concentrated on a corporate job instead, he would be a millionaire by now. It’s also his best investment because if he had not gone through the grind and learned what he learned, he wouldn’t have been the successful entrepreneur he is today.

                                                                            Lessons learned

                                                                            • Working for somebody is fragile.
                                                                            • Every failure teaches you something and makes you a better version of yourself.
                                                                            • Do something you’re passionate about—nobody can beat you at what you’re good at.
                                                                            
                                                                            

                                                                            Andrew’s takeaways

                                                                            • Don’t be too harsh on yourself when you fail. Remember, you did your best with what you knew at the time.
                                                                            
                                                                            

                                                                            Actionable advice

                                                                            To succeed, you need to be where the action is. Secondly, decide what to do because this is a once-in-a-lifetime shot. If you get it wrong, you lose many years. So choose carefully, and pick the stuff you’re naturally good at.

                                                                            Vivek’s recommendations

                                                                            If you’re interested in startups and want to be successful in business, Vivek recommends reading Nicholas Taleb’s Taleb’s books. They will change your perspective.

                                                                            If you need to be aware of your own biases and how your mind plays with you, read Daniel Kahneman’s Thinking, Fast and Slow, and The Almanack of Naval Ravikant: A Guide to Wealth and Happiness. Vivek believes that once you have read these three people, you will be a changed and much better person, not just in business but as a human being.

                                                                            No.1 goal for the next 12 months

                                                                            Vivek’s number one goal for the next 12 months is to double the user base.

                                                                            Parting words

                                                                             

                                                                            “Focus on your goal. Look at the leverage inherent in the ecosystem and make your mark in the world.”

                                                                            Vivek Raina

                                                                             

                                                                            [spp-transcript]

                                                                             

                                                                            Connect with Vivek Raina

                                                                            • LinkedIn
                                                                            • Facebook
                                                                            • Instagram 
                                                                            • YouTube
                                                                            • Website
                                                                            
                                                                            

                                                                            Andrew’s books

                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                            • My Worst Investment Ever
                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                            
                                                                            

                                                                            Andrew’s online programs

                                                                            • Valuation Master Class
                                                                            • The Become a Better Investor Community
                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                            • Finance Made Ridiculously Simple
                                                                            • FVMR Investing: Quantamental Investing Across the World
                                                                            • Become a Great Presenter and Increase Your Influence
                                                                            • Transform Your Business with Dr. Deming’s 14 Points
                                                                            • Achieve Your Goals
                                                                            
                                                                            

                                                                            Connect with Andrew Stotz:

                                                                            • astotz.com
                                                                            • LinkedIn
                                                                            • Facebook
                                                                            • Instagram
                                                                            • Threads
                                                                            • Twitter
                                                                            • YouTube
                                                                            • My Worst Investment Ever Podcast
                                                                            
                                                                            ]]>BIO: Vivek Raina is a seasoned veteran with over two decades of experience in the broadband industry. As the CEO and Co-Founder of Excitel, he leads the mission to connect BHARAT, propelling the company to the top three ISPs in India—a remarkable feat in just eight years.

                                                                            STORY: Vivek spent 10 years finding an investor to fund his business idea. He wishes he had spent these years advancing his corporate career.

                                                                            LEARNING: Working for somebody is fragile. Every failure teaches you something and makes you a better version of yourself. Do something you’re passionate about.

                                                                             

                                                                            “In entrepreneurship, every failure teaches you something. It makes you stronger and better in doing what you’re doing.”

                                                                            Vivek Raina

                                                                             

                                                                            Guest profile

                                                                            Vivek Raina is a seasoned veteran with over two decades of experience in the broadband industry. As the CEO and Co-Founder of Excitel, he leads the mission to connect BHARAT, propelling the company to the top three ISPs in India—a remarkable feat in just eight years. With a million subscribers spanning 55+ cities, Vivek’s leadership has revolutionized lives through pioneering unlimited internet broadband.

                                                                            Vivek hails from Kashmir and is now based in Delhi. His journey includes impactful roles at Hathway, Reliance, and Pacenet, highlighting his exceptional leadership skills.

                                                                            Worst investment ever

                                                                            Within two years of employment, Vivek had decided he would not stay employed—he would do something independently. Vivek started showing his ideas to people, hoping that someone would be interested in funding him. Some of the ideas were really bad, while others were good. Vivek didn’t manage to get an investor. Most people would offer him a salary or some incentives to work with him. It took Vivek 10 years to convince somebody to invest money in his idea. It took another three years to convince them to start a company, and in 2014, he got his first investment.

                                                                            Vivek considers the 10 years he spent making this foundation his worst investment ever because if he had concentrated on a corporate job instead, he would be a millionaire by now. It’s also his best investment because if he had not gone through the grind and learned what he learned, he wouldn’t have been the successful entrepreneur he is today.

                                                                            Lessons learned

                                                                            • Working for somebody is fragile.
                                                                            • Every failure teaches you something and makes you a better version of yourself.
                                                                            • Do something you’re passionate about—nobody can beat you at what you’re good at.
                                                                            
                                                                            

                                                                            Andrew’s takeaways

                                                                            • Don’t be too harsh on yourself when you fail. Remember, you did your best with what you knew at the time.
                                                                            
                                                                            

                                                                            Actionable advice

                                                                            To succeed, you need to be where the action is. Secondly, decide what to do because this is a once-in-a-lifetime shot. If you get it wrong, you lose many years. So choose carefully, and pick the stuff you’re naturally good at.

                                                                            Vivek’s recommendations

                                                                            If you’re interested in startups and want to be successful in business, Vivek recommends reading Nicholas Taleb’s Taleb’s books. They will change your perspective.

                                                                            If you need to be aware of your own biases and how your mind plays with you, read Daniel Kahneman’s Thinking, Fast and Slow, and The Almanack of Naval Ravikant: A Guide to Wealth and Happiness. Vivek believes that once you have read these three people, you will be a changed and much better person, not just in business but as a human being.

                                                                            No.1 goal for the next 12 months

                                                                            Vivek’s number one goal for the next 12 months is to double the user base.

                                                                            Parting words

                                                                             

                                                                            “Focus on your goal. Look at the leverage inherent in the ecosystem and make your mark in the world.”

                                                                            Vivek Raina

                                                                             

                                                                            [spp-transcript]

                                                                             

                                                                            Connect with Vivek Raina

                                                                            • LinkedIn
                                                                            • Facebook
                                                                            • Instagram 
                                                                            • YouTube
                                                                            • Website
                                                                            
                                                                            

                                                                            Andrew’s books

                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                            • My Worst Investment Ever
                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                            
                                                                            

                                                                            Andrew’s online programs

                                                                            • Valuation Master Class
                                                                            • The Become a Better Investor Community
                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                            • Finance Made Ridiculously Simple
                                                                            • FVMR Investing: Quantamental Investing Across the World
                                                                            • Become a Great Presenter and Increase Your Influence
                                                                            • Transform Your Business with Dr. Deming’s 14 Points
                                                                            • Achieve Your Goals
                                                                            
                                                                            

                                                                            Connect with Andrew Stotz:

                                                                            • astotz.com
                                                                            • LinkedIn
                                                                            • Facebook
                                                                            • Instagram
                                                                            • Threads
                                                                            • Twitter
                                                                            • YouTube
                                                                            • My Worst Investment Ever Podcast
                                                                            
                                                                            ]]>c1a1076d-d36c-4abd-b5b3-97ea819512baThu, 18 Apr 2024 06:00:00 +070024:47falsefullWilliam Cohan - Power Failure: The Rise and Fall of An American IconBIO: William D. Cohan, a former senior Wall Street M&A investment banker for 17 years at Lazard Frères & Co., Merrill Lynch, and JPMorgan Chase, is the New York Times bestselling author of seven nonfiction narratives, including his most recent book, Power Failure: The Rise and Fall of An American Icon.

                                                                            STORY: William discusses lessons from his most recent book, which is a story of General Electric (GE), a former global company with facilities worldwide. In his book, William focuses on former GE CEO Jack Welch, who took over the company in 1981 and increased its market value from $12 billion to $650 billion. This company became one of the world’s most valuable and respected companies, and then it all fell apart.

                                                                            LEARNING: Leadership matters. You are not always right. Achieve the numbers in an ethical manner.

                                                                             

                                                                            “I try to write books that I like to read, with great characters and great stories. And, yes, it’s a long book, but I think it’s a great story and worth your time.”

                                                                            William Cohan

                                                                             

                                                                            Guest profile

                                                                            William D. Cohan, a former senior Wall Street M&A investment banker for 17 years at Lazard Frères & Co., Merrill Lynch, and JPMorgan Chase, is the New York Times bestselling author of seven nonfiction narratives, including his most recent book, Power Failure: The Rise and Fall of An American Icon.

                                                                            William is a former guest on the show on episode 739: Get the Numbers Right Before You Invest. Today, he’s back to discuss lessons from his most recent book, which is a story of General Electric (GE), a former global company with facilities worldwide. In his book, William focuses on former GE CEO Jack Welch, who took over the company in 1981 and increased its market value from $12 billion to $650 billion. This company became one of the most valuable and respected companies in the world, and then it kind of all fell apart.

                                                                            Leadership matters

                                                                            The ability of a company to adapt and flexibly evolve in response to market changes is crucial for sustained success. This is vividly illustrated through the leadership tenures of Jack Welch and Jeff Immelt at General Electric (GE), where Welch’s strategic boldness and Immelt’s subsequent decisions markedly impacted the company’s fortunes. The two leaders demonstrate the importance of getting the right man on the right job.

                                                                            Welch was among five candidates vying to become CEO in 1981. He was picked as the CEO because he was potentially the most disruptive—he was going to be this change agent, there was no doubt about it. Welch had pledged to disrupt things to change how GE was run, and he was frankly a fantastic leader. People loved working for him, and he got more out of people than they thought possible. Welch was beloved, feared, respected, and delivered.

                                                                            When choosing a successor, Welch gravitated towards Immelt because he went to Dartmouth and Harvard Business School, got his Ph.D. from the University of Illinois, and was generally intelligent. However, Immelt didn’t understand GE Capital. He didn’t understand finance well or know the dangers of borrowing short and lending long.

                                                                            Borrowing in the commercial paper market is like a 30-day liability, and lending out 7-10 years means that if something happens and dries up your source of capital, you’re toast. This saw him make wrong decisions, which significantly impacted the company.

                                                                            In comparison, when Jack Welch made big decisions, he made the right decisions. When Jeff Immelt had big decisions to make, he made the wrong decisions, by and large.

                                                                            You are not always right

                                                                            The value of dissent and dynamic team interactions cannot be overstated; fostering an environment where open debate and criticism are encouraged catalyzes innovation and helps circumvent potential strategic missteps. These elements underscore the complex interplay between leadership style, strategic adaptability, and the importance of a culture that champions constructive debate within an organization.

                                                                            Welch encouraged dissent. Many people in organizations are afraid to speak up, dissent, and share what they think because there will be consequences for their careers. Welch encouraged people to express their opinions, and though he was whip-smart, he would allow his mind to be changed. And there were plenty of examples where his mind was changed.

                                                                            Sometimes, the separation of the Chairman of the Board and the CEO is justified; other times not

                                                                            The debate over whether to separate the roles of CEO and Chairman is critical in corporate governance, aiming to boost board independence by clear role division: the CEO manages daily operations, while the chairman leads board strategy and oversight. The CEO’s primary focus is growth, and the chairman’s is risk. This separation, supported by major shareholders and advisory firms like BlackRock, Vanguard, and Glass Lewis, aims to enhance decision-making and governance, particularly when a board’s independence is questioned.

                                                                            However, some see benefits in combining these roles for efficiency and unified leadership, a stance shaped by personal experience and shareholder views. The increasing focus on ESG criteria has intensified calls for role separation, though it’s debated whether this could have impacted significant leadership decisions in major companies. It is hard to say if a stronger board and a separated Chairman would have prevented Welch from making what he called the biggest mistake of his career, hiring Jeff Immelt.

                                                                            At GE, the board was aware of Welch’s succession process and the candidates and had a role in vetting them. Welch was not only the CEO but also the chairman of the board, and whatever he wanted, he got.

                                                                            As the CEO, Welch wanted Immelt as his successor, and even though there was some dissension on the board, it didn’t amount to much—it wasn’t enough to win the day. Then, when Immelt became the CEO, he kicked out board members who had actively dissented from his appointment, such as Ken Langone and Sandy Warner, the head of JP Morgan at the time.

                                                                            Achieve the numbers in an ethical manner

                                                                            The General Electric narrative illustrates the vital link between ethical standards and sound financial management in corporate governance. GE’s decline from a beacon of innovation to facing financial turmoil and ethical scrutiny is a cautionary tale. It highlights the dangers of prioritizing profits without robust ethical and financial oversight, mainly seen in the complex operations of GE Capital and its repercussions on the company’s stability and stakeholder trust.

                                                                            This case stresses the importance of integrating ethical considerations into financial strategies to ensure long-term corporate success and integrity. GE’s experience is a critical reminder for businesses to uphold financial prudence and a strong ethical culture, ensuring decisions contribute to sustainable growth and maintain corporate integrity rather than compromising it for short-term benefits.

                                                                            You are not invincible

                                                                            The downfall of a corporation can often be traced to a mix of hubris and a disconnect between its public persona and internal realities. This phenomenon is particularly evident in the case of General Electric, where a sense of invincibility stemming from past achievements led to complacency and overconfidence.

                                                                            This corporate hubris, or excessive pride, can blind a company to emerging challenges and necessary evolutions, setting the stage for decline. Furthermore, GE’s experience underscores the significance of aligning its outward image with its internal operations and culture. The disparity between GE’s celebrated public image as a beacon of innovation and its many internal challenges illustrates the dangerous gap that can develop when a company loses sight of its foundational values and operational integrity in pursuit of maintaining a facade of success.

                                                                             

                                                                            [spp-transcript]

                                                                             

                                                                            Connect with William Cohan

                                                                            • LinkedIn
                                                                            • Twitter
                                                                            • Website
                                                                            • Books
                                                                            
                                                                            

                                                                            Andrew’s books

                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                            • My Worst Investment Ever
                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                            
                                                                            

                                                                            Andrew’s online programs

                                                                            • Valuation Master Class
                                                                            • The Become a...]]>BIO: William D. Cohan, a former senior Wall Street M&A investment banker for 17 years at Lazard Frères & Co., Merrill Lynch, and JPMorgan Chase, is the New York Times bestselling author of seven nonfiction narratives, including his most recent book, Power Failure: The Rise and Fall of An American Icon.

                                                                              STORY: William discusses lessons from his most recent book, which is a story of General Electric (GE), a former global company with facilities worldwide. In his book, William focuses on former GE CEO Jack Welch, who took over the company in 1981 and increased its market value from $12 billion to $650 billion. This company became one of the world’s most valuable and respected companies, and then it all fell apart.

                                                                              LEARNING: Leadership matters. You are not always right. Achieve the numbers in an ethical manner.

                                                                               

                                                                              “I try to write books that I like to read, with great characters and great stories. And, yes, it’s a long book, but I think it’s a great story and worth your time.”

                                                                              William Cohan

                                                                               

                                                                              Guest profile

                                                                              William D. Cohan, a former senior Wall Street M&A investment banker for 17 years at Lazard Frères & Co., Merrill Lynch, and JPMorgan Chase, is the New York Times bestselling author of seven nonfiction narratives, including his most recent book, Power Failure: The Rise and Fall of An American Icon.

                                                                              William is a former guest on the show on episode 739: Get the Numbers Right Before You Invest. Today, he’s back to discuss lessons from his most recent book, which is a story of General Electric (GE), a former global company with facilities worldwide. In his book, William focuses on former GE CEO Jack Welch, who took over the company in 1981 and increased its market value from $12 billion to $650 billion. This company became one of the most valuable and respected companies in the world, and then it kind of all fell apart.

                                                                              Leadership matters

                                                                              The ability of a company to adapt and flexibly evolve in response to market changes is crucial for sustained success. This is vividly illustrated through the leadership tenures of Jack Welch and Jeff Immelt at General Electric (GE), where Welch’s strategic boldness and Immelt’s subsequent decisions markedly impacted the company’s fortunes. The two leaders demonstrate the importance of getting the right man on the right job.

                                                                              Welch was among five candidates vying to become CEO in 1981. He was picked as the CEO because he was potentially the most disruptive—he was going to be this change agent, there was no doubt about it. Welch had pledged to disrupt things to change how GE was run, and he was frankly a fantastic leader. People loved working for him, and he got more out of people than they thought possible. Welch was beloved, feared, respected, and delivered.

                                                                              When choosing a successor, Welch gravitated towards Immelt because he went to Dartmouth and Harvard Business School, got his Ph.D. from the University of Illinois, and was generally intelligent. However, Immelt didn’t understand GE Capital. He didn’t understand finance well or know the dangers of borrowing short and lending long.

                                                                              Borrowing in the commercial paper market is like a 30-day liability, and lending out 7-10 years means that if something happens and dries up your source of capital, you’re toast. This saw him make wrong decisions, which significantly impacted the company.

                                                                              In comparison, when Jack Welch made big decisions, he made the right decisions. When Jeff Immelt had big decisions to make, he made the wrong decisions, by and large.

                                                                              You are not always right

                                                                              The value of dissent and dynamic team interactions cannot be overstated; fostering an environment where open debate and criticism are encouraged catalyzes innovation and helps circumvent potential strategic missteps. These elements underscore the complex interplay between leadership style, strategic adaptability, and the importance of a culture that champions constructive debate within an organization.

                                                                              Welch encouraged dissent. Many people in organizations are afraid to speak up, dissent, and share what they think because there will be consequences for their careers. Welch encouraged people to express their opinions, and though he was whip-smart, he would allow his mind to be changed. And there were plenty of examples where his mind was changed.

                                                                              Sometimes, the separation of the Chairman of the Board and the CEO is justified; other times not

                                                                              The debate over whether to separate the roles of CEO and Chairman is critical in corporate governance, aiming to boost board independence by clear role division: the CEO manages daily operations, while the chairman leads board strategy and oversight. The CEO’s primary focus is growth, and the chairman’s is risk. This separation, supported by major shareholders and advisory firms like BlackRock, Vanguard, and Glass Lewis, aims to enhance decision-making and governance, particularly when a board’s independence is questioned.

                                                                              However, some see benefits in combining these roles for efficiency and unified leadership, a stance shaped by personal experience and shareholder views. The increasing focus on ESG criteria has intensified calls for role separation, though it’s debated whether this could have impacted significant leadership decisions in major companies. It is hard to say if a stronger board and a separated Chairman would have prevented Welch from making what he called the biggest mistake of his career, hiring Jeff Immelt.

                                                                              At GE, the board was aware of Welch’s succession process and the candidates and had a role in vetting them. Welch was not only the CEO but also the chairman of the board, and whatever he wanted, he got.

                                                                              As the CEO, Welch wanted Immelt as his successor, and even though there was some dissension on the board, it didn’t amount to much—it wasn’t enough to win the day. Then, when Immelt became the CEO, he kicked out board members who had actively dissented from his appointment, such as Ken Langone and Sandy Warner, the head of JP Morgan at the time.

                                                                              Achieve the numbers in an ethical manner

                                                                              The General Electric narrative illustrates the vital link between ethical standards and sound financial management in corporate governance. GE’s decline from a beacon of innovation to facing financial turmoil and ethical scrutiny is a cautionary tale. It highlights the dangers of prioritizing profits without robust ethical and financial oversight, mainly seen in the complex operations of GE Capital and its repercussions on the company’s stability and stakeholder trust.

                                                                              This case stresses the importance of integrating ethical considerations into financial strategies to ensure long-term corporate success and integrity. GE’s experience is a critical reminder for businesses to uphold financial prudence and a strong ethical culture, ensuring decisions contribute to sustainable growth and maintain corporate integrity rather than compromising it for short-term benefits.

                                                                              You are not invincible

                                                                              The downfall of a corporation can often be traced to a mix of hubris and a disconnect between its public persona and internal realities. This phenomenon is particularly evident in the case of General Electric, where a sense of invincibility stemming from past achievements led to complacency and overconfidence.

                                                                              This corporate hubris, or excessive pride, can blind a company to emerging challenges and necessary evolutions, setting the stage for decline. Furthermore, GE’s experience underscores the significance of aligning its outward image with its internal operations and culture. The disparity between GE’s celebrated public image as a beacon of innovation and its many internal challenges illustrates the dangerous gap that can develop when a company loses sight of its foundational values and operational integrity in pursuit of maintaining a facade of success.

                                                                               

                                                                              [spp-transcript]

                                                                               

                                                                              Connect with William Cohan

                                                                              • LinkedIn
                                                                              • Twitter
                                                                              • Website
                                                                              • Books
                                                                              
                                                                              

                                                                              Andrew’s books

                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                              • My Worst Investment Ever
                                                                              • 9 Valuation Mistakes and How to Avoid Them
                                                                              • Transform Your Business with Dr.Deming’s 14 Points
                                                                              
                                                                              

                                                                              Andrew’s online programs

                                                                              • Valuation Master Class
                                                                              • The Become a Better Investor Community
                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                              • Finance Made Ridiculously Simple
                                                                              • FVMR Investing: Quantamental Investing Across the World
                                                                              • Become a Great Presenter and Increase Your Influence
                                                                              • Transform Your Business with Dr. Deming’s 14 Points
                                                                              • Achieve Your Goals
                                                                              
                                                                              

                                                                              Connect with Andrew Stotz:

                                                                              • astotz.com
                                                                              • LinkedIn
                                                                              • Facebook
                                                                              • Instagram
                                                                              • Threads
                                                                              • Twitter
                                                                              • YouTube
                                                                              • My Worst Investment Ever Podcast
                                                                              
                                                                              ]]>5eb5ecca-cc87-43f7-b749-6e1560c3b98cThu, 11 Apr 2024 06:00:00 +070001:02:05falsefullTony Fish - Be Brave to Ask the Unsaid QuestionsBIO: Tony Fish is a neuro-minority and a leading expert on decision-making, governance, and entrepreneurship in uncertain environments. His 30-year sense-making and foresight track record means he has been ahead on several technical revolutions.

                                                                              STORY: In this episode, Tony talks about his newest book, Decision Making in Uncertain Times. How can we become more aware of the consequences of our actions tomorrow?

                                                                              LEARNING: Ask better questions.

                                                                               

                                                                              “It’s only through conversations with people like you, Andrew, that I can refine my questions. I love all the people you put on the show because they helped me articulate better what I think I’m optimizing for.”

                                                                              Tony Fish

                                                                               

                                                                              Guest profile

                                                                              Tony Fish is a neuro-minority and a leading expert on decision-making, governance, and entrepreneurship in uncertain environments. His 30-year sense-making and foresight track record means he has been ahead on several technical revolutions. His enthusiasm and drive are contagious & inspiring, especially for wicked problems. He has written and published six books, remains a visiting Fellow at Henley Business School for Entrepreneurship and Innovation, Entrepreneurs-in-residence (EIR) at Bradford School of Management, teaches at London Business School and the London School of Economics in AI and Ethics, and is a European Commission (EC) expert for Big Data.

                                                                              Tony was a guest on Ep261: CEOs Can Defraud a Business in Very Hard to Detect Ways. In this episode, Tony talks about his newest book, Decision Making in Uncertain Times - How can we become more aware of the consequences of our actions on tomorrow?

                                                                              The unsaid questions

                                                                              Tony struggled with how to ask better questions. He says there are two forms of questions. There are questions that we all ask, such as how are you performing? What are you doing? How are you feeling?

                                                                              Then there’s a pile of what Tony termed the unsaid questions. He says that we don’t ask these questions because, politically, we can’t ask them. We emotionally feel we’re not able to, especially if we don’t know the person well enough or when somebody tells us not to ask that type of question. The trouble with a board is that if members don’t ask the unsaid, they won’t be able to discharge their fiduciary duties. Therefore, we need better frameworks to find questions we didn’t know we needed to ask.

                                                                              So, how do we ask those questions? Tony has a whole book on how he does it. When the book gets shared, other people will read it, and they’ll come up with better questions than he has.

                                                                              Principle versus risk

                                                                              According to Tony, when a board starts, it has all these principles outlined and tries to uphold them. But you realize later on as a board that you can’t manage principles. What you can manage is risk frameworks. But you can’t manage risk rating frameworks without rules. So, you create rules that allow you to manage risk. After creating the rules, you become managed against the free-risk framework you believe in because it aligns with your principles.

                                                                              However, over time, the rules stop working, and those rules have to have another rule because there’s an exception to a rule. Tony says that when a new rule is created, or a new procedure or methodology comes along, a board should go back and question if that rule is aligned with its purpose, not whether it is helping the board manage the risk framework better.

                                                                              Over time, you’ll have your purpose clearly and start seeing a massive drift between what you believe you set up and what the risk frameworks and rules allow you to manage. Tony’s challenge to boards is that every time a new rule is created, it should go to the board, and the board should make a judgment call on whether that rule is aligned with its purpose.

                                                                              Role of a board

                                                                              According to Tony, a board needs clarity on the tasks, the processes, the strategy, the purpose, and the North Star. It’s easy for boards to focus on tasks, processes, and strategy, but they find it difficult to focus on purpose and North Star. Most times, people only question whether they’re doing the right thing. He adds that a board has to be guided by data, rules, and regulations. But then it has to be directed by the values it wants and the organization’s values, which then comes back to the principles. The issue most boards face is that others’ values, principles, and behaviors are far more instrumental in a board’s values than they ever realized.

                                                                              Then you’ve got a fundamental issue: Too many people end up on boards without board training. The untrained board members end up replicating management meetings as board meetings, believing that’s what they should be doing.

                                                                              How to set up a board

                                                                              Tony believes that everybody follows an S curve. When you’re in the different phases of going up the S curve, you need other types of governance. However, many people don’t transition as they go up the S curve.

                                                                              When in a particular phase, try to find the board that can do the next part, not the current one. And therein lies the difficulty for so many board members because they want to do what they’re good at and, therefore, stay in their comfort zones. This curtails the ability of the company to scale. What the board should be doing is asking: what do you do? Where are the transitions? How do you go about thinking? What are the processes and procedures? What skills do you need at the different layers as you go up?

                                                                              About the book

                                                                              Tony’s book contains ten short frameworks. The idea is not to explain everything but to help the reader peel back the layers of the falsehood that they think they know what they’re doing, yet they haven’t got a clue. Tony wants you to make better choices and decisions by asking better questions.

                                                                              The book is most accessible on Amazon, where you can purchase it in hardcover, softcover, or Kindle. You can also get a free PDF copy at www.peakparadox.com/book. If you want to reach out to Tony, he’s on LinkedIn.

                                                                               

                                                                              [spp-transcript]

                                                                               

                                                                              Connect with Tony Fish

                                                                              • LinkedIn
                                                                              • Twitter
                                                                              • Website
                                                                              • Blog
                                                                              • Book
                                                                              
                                                                              

                                                                              Andrew’s books

                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                              • My Worst Investment Ever
                                                                              • 9 Valuation Mistakes and How to Avoid Them
                                                                              • Transform Your Business with Dr.Deming’s 14 Points
                                                                              
                                                                              

                                                                              Andrew’s online programs

                                                                              • Valuation Master Class
                                                                              • The Become a Better Investor Community
                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                              • Finance Made Ridiculously Simple
                                                                              • FVMR Investing: Quantamental Investing Across the World
                                                                              • Become a Great Presenter and Increase Your Influence
                                                                              • Transform Your Business with Dr. Deming’s 14 Points
                                                                              • Achieve Your Goals
                                                                              
                                                                              

                                                                              Connect with Andrew Stotz:

                                                                              • astotz.com
                                                                              • LinkedIn
                                                                              • BIO: Tony Fish is a neuro-minority and a leading expert on decision-making, governance, and entrepreneurship in uncertain environments. His 30-year sense-making and foresight track record means he has been ahead on several technical revolutions.

                                                                                STORY: In this episode, Tony talks about his newest book, Decision Making in Uncertain Times. How can we become more aware of the consequences of our actions tomorrow?

                                                                                LEARNING: Ask better questions.

                                                                                 

                                                                                “It’s only through conversations with people like you, Andrew, that I can refine my questions. I love all the people you put on the show because they helped me articulate better what I think I’m optimizing for.”

                                                                                Tony Fish

                                                                                 

                                                                                Guest profile

                                                                                Tony Fish is a neuro-minority and a leading expert on decision-making, governance, and entrepreneurship in uncertain environments. His 30-year sense-making and foresight track record means he has been ahead on several technical revolutions. His enthusiasm and drive are contagious & inspiring, especially for wicked problems. He has written and published six books, remains a visiting Fellow at Henley Business School for Entrepreneurship and Innovation, Entrepreneurs-in-residence (EIR) at Bradford School of Management, teaches at London Business School and the London School of Economics in AI and Ethics, and is a European Commission (EC) expert for Big Data.

                                                                                Tony was a guest on Ep261: CEOs Can Defraud a Business in Very Hard to Detect Ways. In this episode, Tony talks about his newest book, Decision Making in Uncertain Times - How can we become more aware of the consequences of our actions on tomorrow?

                                                                                The unsaid questions

                                                                                Tony struggled with how to ask better questions. He says there are two forms of questions. There are questions that we all ask, such as how are you performing? What are you doing? How are you feeling?

                                                                                Then there’s a pile of what Tony termed the unsaid questions. He says that we don’t ask these questions because, politically, we can’t ask them. We emotionally feel we’re not able to, especially if we don’t know the person well enough or when somebody tells us not to ask that type of question. The trouble with a board is that if members don’t ask the unsaid, they won’t be able to discharge their fiduciary duties. Therefore, we need better frameworks to find questions we didn’t know we needed to ask.

                                                                                So, how do we ask those questions? Tony has a whole book on how he does it. When the book gets shared, other people will read it, and they’ll come up with better questions than he has.

                                                                                Principle versus risk

                                                                                According to Tony, when a board starts, it has all these principles outlined and tries to uphold them. But you realize later on as a board that you can’t manage principles. What you can manage is risk frameworks. But you can’t manage risk rating frameworks without rules. So, you create rules that allow you to manage risk. After creating the rules, you become managed against the free-risk framework you believe in because it aligns with your principles.

                                                                                However, over time, the rules stop working, and those rules have to have another rule because there’s an exception to a rule. Tony says that when a new rule is created, or a new procedure or methodology comes along, a board should go back and question if that rule is aligned with its purpose, not whether it is helping the board manage the risk framework better.

                                                                                Over time, you’ll have your purpose clearly and start seeing a massive drift between what you believe you set up and what the risk frameworks and rules allow you to manage. Tony’s challenge to boards is that every time a new rule is created, it should go to the board, and the board should make a judgment call on whether that rule is aligned with its purpose.

                                                                                Role of a board

                                                                                According to Tony, a board needs clarity on the tasks, the processes, the strategy, the purpose, and the North Star. It’s easy for boards to focus on tasks, processes, and strategy, but they find it difficult to focus on purpose and North Star. Most times, people only question whether they’re doing the right thing. He adds that a board has to be guided by data, rules, and regulations. But then it has to be directed by the values it wants and the organization’s values, which then comes back to the principles. The issue most boards face is that others’ values, principles, and behaviors are far more instrumental in a board’s values than they ever realized.

                                                                                Then you’ve got a fundamental issue: Too many people end up on boards without board training. The untrained board members end up replicating management meetings as board meetings, believing that’s what they should be doing.

                                                                                How to set up a board

                                                                                Tony believes that everybody follows an S curve. When you’re in the different phases of going up the S curve, you need other types of governance. However, many people don’t transition as they go up the S curve.

                                                                                When in a particular phase, try to find the board that can do the next part, not the current one. And therein lies the difficulty for so many board members because they want to do what they’re good at and, therefore, stay in their comfort zones. This curtails the ability of the company to scale. What the board should be doing is asking: what do you do? Where are the transitions? How do you go about thinking? What are the processes and procedures? What skills do you need at the different layers as you go up?

                                                                                About the book

                                                                                Tony’s book contains ten short frameworks. The idea is not to explain everything but to help the reader peel back the layers of the falsehood that they think they know what they’re doing, yet they haven’t got a clue. Tony wants you to make better choices and decisions by asking better questions.

                                                                                The book is most accessible on Amazon, where you can purchase it in hardcover, softcover, or Kindle. You can also get a free PDF copy at www.peakparadox.com/book. If you want to reach out to Tony, he’s on LinkedIn.

                                                                                 

                                                                                [spp-transcript]

                                                                                 

                                                                                Connect with Tony Fish

                                                                                • LinkedIn
                                                                                • Twitter
                                                                                • Website
                                                                                • Blog
                                                                                • Book
                                                                                
                                                                                

                                                                                Andrew’s books

                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                • My Worst Investment Ever
                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                
                                                                                

                                                                                Andrew’s online programs

                                                                                • Valuation Master Class
                                                                                • The Become a Better Investor Community
                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                • Finance Made Ridiculously Simple
                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                • Achieve Your Goals
                                                                                
                                                                                

                                                                                Connect with Andrew Stotz:

                                                                                • astotz.com
                                                                                • LinkedIn
                                                                                • Facebook
                                                                                • Instagram
                                                                                • Threads
                                                                                • Twitter
                                                                                • YouTube
                                                                                • My Worst Investment Ever Podcast
                                                                                
                                                                                ]]>e905195a-9ac6-416f-9ad7-e56eb3156094Tue, 26 Mar 2024 06:00:00 +070047:36falsefullISMS 40: Larry Swedroe – Market vs. Hedge Fund Managers’ EfficiencyIn this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Today, they discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this series, they discuss mistake 30: Do You Fail to Understand the Tyranny of the Efficiency of the Market? And mistake 31: Do You Believe Hedge Fund Managers Deliver Superior Performance?

                                                                                LEARNING: Discovering anomalies or mistakes reinforces and makes the market more efficient. Hedge fund managers demonstrate no greater ability to deliver above-market returns than do active mutual fund managers.

                                                                                 

                                                                                “Unfortunately, the evidence is hedge fund managers demonstrate no greater ability to deliver above-market returns than do active mutual fund managers.”

                                                                                Larry Swedroe

                                                                                 

                                                                                In this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Larry is the head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                                Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this series, they discuss mistake number 30: Do You Fail to Understand the Tyranny of the Efficiency of the Market? And mistake 31: Do You Believe Hedge Fund Managers Deliver Superior Performance?

                                                                                Did you miss out on previous mistakes? Check them out:

                                                                                • ISMS 8: Larry Swedroe – Are You Overconfident in Your Skills?
                                                                                • ISMS 17: Larry Swedroe – Do You Project Recent Trends Indefinitely Into the Future?
                                                                                • ISMS 20: Larry Swedroe – Do You Extrapolate From Small Samples and Trust Your Intuition?
                                                                                • ISMS 23: Larry Swedroe – Do You Allow Yourself to Be Influenced by Your Ego and Herd Mentality?
                                                                                • ISMS 24: Larry Swedroe – Confusing Skill and Luck Can Stop You From Investing Wisely
                                                                                • ISMS 25: Larry Swedroe – Admit Your Mistakes and Don’t Listen to Fake Experts
                                                                                • ISMS 26: Larry Swedroe – Are You Subject to the Endowment Effect or the Hot Streak Fallacy?
                                                                                • ISMS 27: Larry Swedroe – Familiar Doesn’t Make It Safe and You’re Not Playing With the House’s Money
                                                                                • ISMS 29: Larry Swedroe – The Shiny Apple is Poisonous and Information is Not Knowledge
                                                                                • ISMS 30: Larry Swedroe – Do You Believe Your Fortune Is in the Stars or Rely on Misleading Information?
                                                                                • ISMS 34: Larry Swedroe – Consider All Hidden Costs Before You Invest
                                                                                • ISMS 35: Larry Swedroe – Great Companies Are Not Always High-Return Investments
                                                                                • ISMS 36: Larry Swedroe – Two Heads Are Not Better Than One When Investing
                                                                                • ISMS 37: Larry Swedroe – Pay Attention to a Fund’s Proper Benchmarks and Taxes
                                                                                • ISMS 38: Larry Swedroe – The Self-healing Mechanism of Risk Assets
                                                                                • ISMS 39: Larry Swedroe – Don’t Choose a Fund by Its Descriptive Name
                                                                                
                                                                                

                                                                                Mistake number 30: Do You Fail to Understand the Tyranny of the Efficiency of the Market?

                                                                                According to Larry, the Efficient Market Hypothesis (EMH) is the most powerful hypothesis or theory because the very act of discovering anomalies or mistakes reinforces and makes the market more efficient. When somebody discovers an anomaly, it gets published, people read about it, exploit it, and the anomaly typically will disappear or shrink dramatically.

                                                                                Pricing anomalies present a problem for those who believe in EMH. However, the real question for investors is not whether the market persistently makes pricing errors. Instead, the real question is: are the anomalies exploitable after considering real-world costs?

                                                                                Mistake number 31: Do You Believe Hedge Fund Managers Deliver Superior Performance?

                                                                                Hedge funds, a small and specialized niche within the investment fund arena, attract lots of attention. Hedge fund managers seek to outperform market indices such as the S&P 500 Index by exploiting what they perceive to be market mispricings. Studying their performance would seem to be one way of testing the EMH and the ability of active managers to outperform their respective benchmarks.

                                                                                Over the last 20 years, hedge fund managers have underperformed one-month Treasury bills by something like 1.4% for T-bills to 1.2% for hedge funds. A study by AQR Capital Management covered the five-year period ending January 31, 2001. The study found the average hedge fund had returned 14.7% per year, lagging the S&P 500 Index by almost 4 ppts per year.

                                                                                The 2006 study, “The A, B, Cs of Hedge Funds: Alphas, Betas, and Costs,” covered the period from January 1995 through March 2006 and found the average hedge fund had returned 8.98% per year, lagging the S&P 500 Index by 2.6 ppts per year.

                                                                                Hedge fund investing appeals to investors because of the exclusive nature of the club. It also offers the potential of great rewards. Unfortunately, the evidence is hedge fund managers demonstrate no greater ability to deliver above-market returns than do active mutual fund managers. At the same time, investors in hedge funds were earning below-market returns. They were (in many cases) assuming far more risk — although they were probably unaware they were doing so.

                                                                                In addition to these risks, hedge funds also tend to be highly tax inefficient and show no persistent performance beyond the randomly expected, meaning there is no way to identify the few winners ahead of time.

                                                                                About Larry Swedroe

                                                                                Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                                Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                                Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                                Larry is a prolific writer,...]]>In this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Today, they discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this series, they discuss mistake 30: Do You Fail to Understand the Tyranny of the Efficiency of the Market? And mistake 31: Do You Believe Hedge Fund Managers Deliver Superior Performance?

                                                                                LEARNING: Discovering anomalies or mistakes reinforces and makes the market more efficient. Hedge fund managers demonstrate no greater ability to deliver above-market returns than do active mutual fund managers.

                                                                                 

                                                                                “Unfortunately, the evidence is hedge fund managers demonstrate no greater ability to deliver above-market returns than do active mutual fund managers.”

                                                                                Larry Swedroe

                                                                                 

                                                                                In this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Larry is the head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                                Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this series, they discuss mistake number 30: Do You Fail to Understand the Tyranny of the Efficiency of the Market? And mistake 31: Do You Believe Hedge Fund Managers Deliver Superior Performance?

                                                                                Did you miss out on previous mistakes? Check them out:

                                                                                • ISMS 8: Larry Swedroe – Are You Overconfident in Your Skills?
                                                                                • ISMS 17: Larry Swedroe – Do You Project Recent Trends Indefinitely Into the Future?
                                                                                • ISMS 20: Larry Swedroe – Do You Extrapolate From Small Samples and Trust Your Intuition?
                                                                                • ISMS 23: Larry Swedroe – Do You Allow Yourself to Be Influenced by Your Ego and Herd Mentality?
                                                                                • ISMS 24: Larry Swedroe – Confusing Skill and Luck Can Stop You From Investing Wisely
                                                                                • ISMS 25: Larry Swedroe – Admit Your Mistakes and Don’t Listen to Fake Experts
                                                                                • ISMS 26: Larry Swedroe – Are You Subject to the Endowment Effect or the Hot Streak Fallacy?
                                                                                • ISMS 27: Larry Swedroe – Familiar Doesn’t Make It Safe and You’re Not Playing With the House’s Money
                                                                                • ISMS 29: Larry Swedroe – The Shiny Apple is Poisonous and Information is Not Knowledge
                                                                                • ISMS 30: Larry Swedroe – Do You Believe Your Fortune Is in the Stars or Rely on Misleading Information?
                                                                                • ISMS 34: Larry Swedroe – Consider All Hidden Costs Before You Invest
                                                                                • ISMS 35: Larry Swedroe – Great Companies Are Not Always High-Return Investments
                                                                                • ISMS 36: Larry Swedroe – Two Heads Are Not Better Than One When Investing
                                                                                • ISMS 37: Larry Swedroe – Pay Attention to a Fund’s Proper Benchmarks and Taxes
                                                                                • ISMS 38: Larry Swedroe – The Self-healing Mechanism of Risk Assets
                                                                                • ISMS 39: Larry Swedroe – Don’t Choose a Fund by Its Descriptive Name
                                                                                
                                                                                

                                                                                Mistake number 30: Do You Fail to Understand the Tyranny of the Efficiency of the Market?

                                                                                According to Larry, the Efficient Market Hypothesis (EMH) is the most powerful hypothesis or theory because the very act of discovering anomalies or mistakes reinforces and makes the market more efficient. When somebody discovers an anomaly, it gets published, people read about it, exploit it, and the anomaly typically will disappear or shrink dramatically.

                                                                                Pricing anomalies present a problem for those who believe in EMH. However, the real question for investors is not whether the market persistently makes pricing errors. Instead, the real question is: are the anomalies exploitable after considering real-world costs?

                                                                                Mistake number 31: Do You Believe Hedge Fund Managers Deliver Superior Performance?

                                                                                Hedge funds, a small and specialized niche within the investment fund arena, attract lots of attention. Hedge fund managers seek to outperform market indices such as the S&P 500 Index by exploiting what they perceive to be market mispricings. Studying their performance would seem to be one way of testing the EMH and the ability of active managers to outperform their respective benchmarks.

                                                                                Over the last 20 years, hedge fund managers have underperformed one-month Treasury bills by something like 1.4% for T-bills to 1.2% for hedge funds. A study by AQR Capital Management covered the five-year period ending January 31, 2001. The study found the average hedge fund had returned 14.7% per year, lagging the S&P 500 Index by almost 4 ppts per year.

                                                                                The 2006 study, “The A, B, Cs of Hedge Funds: Alphas, Betas, and Costs,” covered the period from January 1995 through March 2006 and found the average hedge fund had returned 8.98% per year, lagging the S&P 500 Index by 2.6 ppts per year.

                                                                                Hedge fund investing appeals to investors because of the exclusive nature of the club. It also offers the potential of great rewards. Unfortunately, the evidence is hedge fund managers demonstrate no greater ability to deliver above-market returns than do active mutual fund managers. At the same time, investors in hedge funds were earning below-market returns. They were (in many cases) assuming far more risk — although they were probably unaware they were doing so.

                                                                                In addition to these risks, hedge funds also tend to be highly tax inefficient and show no persistent performance beyond the randomly expected, meaning there is no way to identify the few winners ahead of time.

                                                                                About Larry Swedroe

                                                                                Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                                Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                                Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                                Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                                 

                                                                                [spp-transcript]

                                                                                 

                                                                                Connect with Larry Swedroe

                                                                                • LinkedIn
                                                                                • Twitter
                                                                                • Website
                                                                                • Books
                                                                                
                                                                                

                                                                                Andrew’s books

                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                • My Worst Investment Ever
                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                
                                                                                

                                                                                Andrew’s online programs

                                                                                • Valuation Master Class
                                                                                • The Become a Better Investor Community
                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                • Finance Made Ridiculously Simple
                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                • Achieve Your Goals
                                                                                
                                                                                

                                                                                Connect with Andrew Stotz:

                                                                                • astotz.com
                                                                                • LinkedIn
                                                                                • Facebook
                                                                                • Instagram
                                                                                • Twitter
                                                                                • YouTube
                                                                                • My Worst Investment Ever Podcast
                                                                                
                                                                                

                                                                                Further reading mentioned

                                                                                • Larry Swedroe and RC Balaban, Investment Mistakes Even Smart Investors Make and How to Avoid Them
                                                                                • Philip E. Tetlock, Expert Political Judgment: How Good Is It? How Can We Know?
                                                                                • Gary Belsky and Thomas Gilovich, Why Smart People Make Big Money Mistakes and How to Correct Them: Lessons from the Life-Changing Science of Behavioral Economics
                                                                                • Larry Swedroe, Think, Act, and Invest Like Warren Buffett: The Winning Strategy to Help You Achieve Your Financial and Life Goals
                                                                                • Larry Swedroe and Kevin Grogan, Reducing the Risk of Black Swans: Using the Science of Investing to Capture Returns with Less Volatility
                                                                                
                                                                                ]]>060cdcf1-6171-4708-b03f-debc3ea9881cTue, 19 Mar 2024 06:00:00 +070039:22falsefullChris Kendall - Don’t Underestimate the Funding Needed to Go Big TimeBIO: Chris Kendall is the CEO of the Australian outsourced accounting group Aretex. Aretex helps businesses grow and scale with best-practice accounting, bookkeeping, and real-time access to accurate financial information.

                                                                                STORY: Chris invested in the idea of a reality TV show piloted around finding baseball players. Chris believed in his friend’s vision and was so caught up in the emotional attachment that he didn’t do any due diligence on the idea.

                                                                                LEARNING: If you’re going to fail, fail quickly, be honest about the failure, figure out what happened, and then move on to the next step. Don’t underestimate the funding needed to go big time.

                                                                                 

                                                                                “There’s a balance between raising enough money to reduce dilution and raising enough money to ensure you can get to the next hurdle.”

                                                                                Chris Kendall

                                                                                 

                                                                                Guest profile

                                                                                Chris Kendall is the CEO of the Australian outsourced accounting group Aretex. Aretex helps businesses grow and scale with best-practice accounting, bookkeeping, and real-time access to accurate financial information.

                                                                                He is also the host of The Anti-Failure Podcasts, which examine the lessons from failure in business and life that ultimately allow us to succeed.

                                                                                Worst investment ever

                                                                                Chris’s worst investment is the one he didn’t make, which was not buying property in the ’90s before he left Australia. His advice to anybody out there is to find a way to get into the property market as early as possible, go through the struggle of pulling together all of the resources you’ve got access to, and put them in a property.

                                                                                Chris shares one investment he made through passion and emotional attachment. The investment was a reality TV show piloted around finding baseball players. The TV show was created by a friend who envisioned creating a reality show intended to describe how professional athletes look through the ringers to determine where they end up playing a professional sport. The friend had some of the big names in baseball. He needed money to make the pilot, and his friends (including Chris) and family put some money in and gave it a shot. But he couldn’t get the traction to turn it into the TV show that everyone thought it was capable of.

                                                                                Chris believed in his friend’s vision and was so caught up in the emotional attachment that he didn’t do any due diligence on the idea.

                                                                                Lessons learned

                                                                                • When looking at property, ask yourself: Does this appeal to you? Does it meet your immediate needs? Is there an opportunity to leverage that in a growing market?
                                                                                • There’s a balance between raising enough money to reduce dilution and raising enough money to ensure you can reach the next hurdle.
                                                                                • If you’re going to fail, fail quickly, be honest about the failure, figure out what happened, and then move on to the next step.
                                                                                
                                                                                

                                                                                Andrew’s takeaways

                                                                                • Don’t underestimate the funding needed to go big time.
                                                                                
                                                                                

                                                                                No.1 goal for the next 12 months

                                                                                Chris’s number one goal for the next 12 months is to continue working with small business owners and helping clients get the best information they need to run their businesses.

                                                                                Parting words

                                                                                 

                                                                                “Have the courage to turn up and give your best.”

                                                                                Chris Kendall

                                                                                 

                                                                                [spp-transcript]

                                                                                 

                                                                                Connect with Chris Kendall

                                                                                • LinkedIn
                                                                                • Facebook
                                                                                • Instagram
                                                                                • Podcast
                                                                                • Website
                                                                                
                                                                                

                                                                                Andrew’s books

                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                • My Worst Investment Ever
                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                
                                                                                

                                                                                Andrew’s online programs

                                                                                • Valuation Master Class
                                                                                • The Become a Better Investor Community
                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                • Finance Made Ridiculously Simple
                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                • Achieve Your Goals
                                                                                
                                                                                

                                                                                Connect with Andrew Stotz:

                                                                                • astotz.com
                                                                                • LinkedIn
                                                                                • Facebook
                                                                                • Instagram
                                                                                • Threads
                                                                                • Twitter
                                                                                • YouTube
                                                                                • My Worst Investment Ever Podcast
                                                                                
                                                                                ]]>BIO: Chris Kendall is the CEO of the Australian outsourced accounting group Aretex. Aretex helps businesses grow and scale with best-practice accounting, bookkeeping, and real-time access to accurate financial information.

                                                                                STORY: Chris invested in the idea of a reality TV show piloted around finding baseball players. Chris believed in his friend’s vision and was so caught up in the emotional attachment that he didn’t do any due diligence on the idea.

                                                                                LEARNING: If you’re going to fail, fail quickly, be honest about the failure, figure out what happened, and then move on to the next step. Don’t underestimate the funding needed to go big time.

                                                                                 

                                                                                “There’s a balance between raising enough money to reduce dilution and raising enough money to ensure you can get to the next hurdle.”

                                                                                Chris Kendall

                                                                                 

                                                                                Guest profile

                                                                                Chris Kendall is the CEO of the Australian outsourced accounting group Aretex. Aretex helps businesses grow and scale with best-practice accounting, bookkeeping, and real-time access to accurate financial information.

                                                                                He is also the host of The Anti-Failure Podcasts, which examine the lessons from failure in business and life that ultimately allow us to succeed.

                                                                                Worst investment ever

                                                                                Chris’s worst investment is the one he didn’t make, which was not buying property in the ’90s before he left Australia. His advice to anybody out there is to find a way to get into the property market as early as possible, go through the struggle of pulling together all of the resources you’ve got access to, and put them in a property.

                                                                                Chris shares one investment he made through passion and emotional attachment. The investment was a reality TV show piloted around finding baseball players. The TV show was created by a friend who envisioned creating a reality show intended to describe how professional athletes look through the ringers to determine where they end up playing a professional sport. The friend had some of the big names in baseball. He needed money to make the pilot, and his friends (including Chris) and family put some money in and gave it a shot. But he couldn’t get the traction to turn it into the TV show that everyone thought it was capable of.

                                                                                Chris believed in his friend’s vision and was so caught up in the emotional attachment that he didn’t do any due diligence on the idea.

                                                                                Lessons learned

                                                                                • When looking at property, ask yourself: Does this appeal to you? Does it meet your immediate needs? Is there an opportunity to leverage that in a growing market?
                                                                                • There’s a balance between raising enough money to reduce dilution and raising enough money to ensure you can reach the next hurdle.
                                                                                • If you’re going to fail, fail quickly, be honest about the failure, figure out what happened, and then move on to the next step.
                                                                                
                                                                                

                                                                                Andrew’s takeaways

                                                                                • Don’t underestimate the funding needed to go big time.
                                                                                
                                                                                

                                                                                No.1 goal for the next 12 months

                                                                                Chris’s number one goal for the next 12 months is to continue working with small business owners and helping clients get the best information they need to run their businesses.

                                                                                Parting words

                                                                                 

                                                                                “Have the courage to turn up and give your best.”

                                                                                Chris Kendall

                                                                                 

                                                                                [spp-transcript]

                                                                                 

                                                                                Connect with Chris Kendall

                                                                                • LinkedIn
                                                                                • Facebook
                                                                                • Instagram
                                                                                • Podcast
                                                                                • Website
                                                                                
                                                                                

                                                                                Andrew’s books

                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                • My Worst Investment Ever
                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                
                                                                                

                                                                                Andrew’s online programs

                                                                                • Valuation Master Class
                                                                                • The Become a Better Investor Community
                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                • Finance Made Ridiculously Simple
                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                • Achieve Your Goals
                                                                                
                                                                                

                                                                                Connect with Andrew Stotz:

                                                                                • astotz.com
                                                                                • LinkedIn
                                                                                • Facebook
                                                                                • Instagram
                                                                                • Threads
                                                                                • Twitter
                                                                                • YouTube
                                                                                • My Worst Investment Ever Podcast
                                                                                
                                                                                ]]>4d242c85-5307-4215-8728-402be6cf73d5Thu, 14 Mar 2024 06:00:00 +070041:37falsefullRiggs Eckelberry - Don’t Go into Any Industry UnpreparedBIO: Riggs Eckelberry is a nationally renowned entrepreneur who deploys his personal Break To Build™ process to help rebuild the water industry, which has reached a critical breaking point in recent years despite being essential to the planet’s survival.

                                                                                STORY: Riggs met this wonderful lady who asked him to sit down with her money manager. He showed up at this money manager’s office, who told him he had a great business going and advised him to go public. Riggs said that would be impossible because he wasn’t profitable yet. Turning down this opportunity turned out to be Riggs’s worst investment.

                                                                                LEARNING: You have to get that monthly recurring revenue. Don’t enter any industry unprepared.

                                                                                 

                                                                                “Your greatest expense is the money you don’t make, the opportunity cost.”

                                                                                Riggs Eckelberry

                                                                                 

                                                                                Guest profile

                                                                                Riggs Eckelberry is a nationally renowned entrepreneur who deploys his personal Break To Build™ process to help rebuild the water industry, which has reached a critical breaking point in recent years despite being essential to the planet’s survival. As the founding CEO of OriginClear, Riggs has developed innovative solutions to help businesses face rising water bills by tapping into new investment markets. He is even pioneering the development of “water stablecoins,” a cryptocurrency backed by water assets. With a diverse background in nonprofit management, oceangoing navigation, and technology disruption, Riggs is uniquely qualified to bring change to an outdated and overrun industry.

                                                                                Worst investment ever

                                                                                In the early 1980s, Riggs realized that technology was going to be the linchpin for all change, and he wanted to be a part of it, so he moved to New York City. This was the period when companies were moving from the old safeguard ledger to microcomputer-type accounting systems. A lot of people needed help making that migration. Riggs created a series of companies that tried to help these people.

                                                                                Riggs happened to meet this wonderful lady who asked him to have a sit down with her money manager. He showed up at this money manager’s office, who told him he had a great business going and advised him to go public. Riggs insisted that would be impossible because he was yet to be profitable. Turning down this opportunity turned out to be Riggs’s worst investment. Unfortunately, Riggs didn’t know that in this industry, they’re not very profitable at the outset, but the real money is in the monthly revenue.

                                                                                Interestingly, Riggs gave the business to his best salesman. Years later, he told Riggs that he still had some of the accounts they opened together, and he’d become a millionaire from that recurring monthly revenue.

                                                                                Lessons learned

                                                                                • You’ve got to look for that monthly recurring revenue.
                                                                                • Wall Street bets on the future.
                                                                                • Don’t enter any industry unprepared; get to know the space first.
                                                                                • If you have a great team, you’ll have a life.
                                                                                • Put an engineer’s mind to the scaling problem.
                                                                                
                                                                                

                                                                                Andrew’s takeaways

                                                                                • You’ve got to be able to paint a vision of the scalability of your venture.
                                                                                
                                                                                

                                                                                Actionable advice

                                                                                You need to like what you’re going into because you will be stuck with it for years, especially if you succeed. Also, have a strong familiarity with the trade’s ins and outs.

                                                                                Riggs’s recommendations

                                                                                Riggs recommends reading The Innovator’s Dilemma. The seed of the destruction of every enterprise is in that enterprise, and the existing business model is actively suppressing it. The book will help you liberate this seed and even create a new business.

                                                                                No.1 goal for the next 12 months

                                                                                Riggs’s number one goal for the next 12 months is to pivot the mother company OriginClear, to an incubator role and move to the NASDAQ.

                                                                                Parting words

                                                                                 

                                                                                “Today is the best of times as the world globalizes and becomes completely chaotic. That’s an opportunity. Grab it.”

                                                                                Riggs Eckelberry

                                                                                 

                                                                                [spp-transcript]

                                                                                 

                                                                                Connect with Riggs Eckelberry

                                                                                • LinkedIn
                                                                                • Twitter
                                                                                • Facebook
                                                                                • YouTube
                                                                                • Website
                                                                                
                                                                                

                                                                                Andrew’s books

                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                • My Worst Investment Ever
                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                
                                                                                

                                                                                Andrew’s online programs

                                                                                • Valuation Master Class
                                                                                • The Become a Better Investor Community
                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                • Finance Made Ridiculously Simple
                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                • Achieve Your Goals
                                                                                
                                                                                

                                                                                Connect with Andrew Stotz:

                                                                                • astotz.com
                                                                                • LinkedIn
                                                                                • Facebook
                                                                                • Instagram
                                                                                • Threads
                                                                                • Twitter
                                                                                • YouTube
                                                                                • My Worst Investment Ever Podcast
                                                                                
                                                                                ]]>BIO: Riggs Eckelberry is a nationally renowned entrepreneur who deploys his personal Break To Build™ process to help rebuild the water industry, which has reached a critical breaking point in recent years despite being essential to the planet’s survival.

                                                                                STORY: Riggs met this wonderful lady who asked him to sit down with her money manager. He showed up at this money manager’s office, who told him he had a great business going and advised him to go public. Riggs said that would be impossible because he wasn’t profitable yet. Turning down this opportunity turned out to be Riggs’s worst investment.

                                                                                LEARNING: You have to get that monthly recurring revenue. Don’t enter any industry unprepared.

                                                                                 

                                                                                “Your greatest expense is the money you don’t make, the opportunity cost.”

                                                                                Riggs Eckelberry

                                                                                 

                                                                                Guest profile

                                                                                Riggs Eckelberry is a nationally renowned entrepreneur who deploys his personal Break To Build™ process to help rebuild the water industry, which has reached a critical breaking point in recent years despite being essential to the planet’s survival. As the founding CEO of OriginClear, Riggs has developed innovative solutions to help businesses face rising water bills by tapping into new investment markets. He is even pioneering the development of “water stablecoins,” a cryptocurrency backed by water assets. With a diverse background in nonprofit management, oceangoing navigation, and technology disruption, Riggs is uniquely qualified to bring change to an outdated and overrun industry.

                                                                                Worst investment ever

                                                                                In the early 1980s, Riggs realized that technology was going to be the linchpin for all change, and he wanted to be a part of it, so he moved to New York City. This was the period when companies were moving from the old safeguard ledger to microcomputer-type accounting systems. A lot of people needed help making that migration. Riggs created a series of companies that tried to help these people.

                                                                                Riggs happened to meet this wonderful lady who asked him to have a sit down with her money manager. He showed up at this money manager’s office, who told him he had a great business going and advised him to go public. Riggs insisted that would be impossible because he was yet to be profitable. Turning down this opportunity turned out to be Riggs’s worst investment. Unfortunately, Riggs didn’t know that in this industry, they’re not very profitable at the outset, but the real money is in the monthly revenue.

                                                                                Interestingly, Riggs gave the business to his best salesman. Years later, he told Riggs that he still had some of the accounts they opened together, and he’d become a millionaire from that recurring monthly revenue.

                                                                                Lessons learned

                                                                                • You’ve got to look for that monthly recurring revenue.
                                                                                • Wall Street bets on the future.
                                                                                • Don’t enter any industry unprepared; get to know the space first.
                                                                                • If you have a great team, you’ll have a life.
                                                                                • Put an engineer’s mind to the scaling problem.
                                                                                
                                                                                

                                                                                Andrew’s takeaways

                                                                                • You’ve got to be able to paint a vision of the scalability of your venture.
                                                                                
                                                                                

                                                                                Actionable advice

                                                                                You need to like what you’re going into because you will be stuck with it for years, especially if you succeed. Also, have a strong familiarity with the trade’s ins and outs.

                                                                                Riggs’s recommendations

                                                                                Riggs recommends reading The Innovator’s Dilemma. The seed of the destruction of every enterprise is in that enterprise, and the existing business model is actively suppressing it. The book will help you liberate this seed and even create a new business.

                                                                                No.1 goal for the next 12 months

                                                                                Riggs’s number one goal for the next 12 months is to pivot the mother company OriginClear, to an incubator role and move to the NASDAQ.

                                                                                Parting words

                                                                                 

                                                                                “Today is the best of times as the world globalizes and becomes completely chaotic. That’s an opportunity. Grab it.”

                                                                                Riggs Eckelberry

                                                                                 

                                                                                [spp-transcript]

                                                                                 

                                                                                Connect with Riggs Eckelberry

                                                                                • LinkedIn
                                                                                • Twitter
                                                                                • Facebook
                                                                                • YouTube
                                                                                • Website
                                                                                
                                                                                

                                                                                Andrew’s books

                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                • My Worst Investment Ever
                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                
                                                                                

                                                                                Andrew’s online programs

                                                                                • Valuation Master Class
                                                                                • The Become a Better Investor Community
                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                • Finance Made Ridiculously Simple
                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                • Achieve Your Goals
                                                                                
                                                                                

                                                                                Connect with Andrew Stotz:

                                                                                • astotz.com
                                                                                • LinkedIn
                                                                                • Facebook
                                                                                • Instagram
                                                                                • Threads
                                                                                • Twitter
                                                                                • YouTube
                                                                                • My Worst Investment Ever Podcast
                                                                                
                                                                                ]]>04fb5d3c-1d4a-4334-8b34-7dff31c7cbcfTue, 12 Mar 2024 06:00:00 +070038:44falsefullISMS 39: Larry Swedroe – Don’t Choose a Fund by Its Descriptive NameIn this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Today, they discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this series, they discuss mistake number 28: Do You Fail to Compare Your Funds to Proper Benchmarks? And mistake 29: Do You Believe Active Management Is a Winner’s Game in Inefficient Markets?

                                                                                LEARNING: Don’t choose a fund by its name. Active management is highly unlikely to outperform even in inefficient emerging markets.

                                                                                 

                                                                                “Don’t choose a fund, even an index fund, by its name. Instead, you should carefully check its weighted average book-to-market and market capitalization levels.”

                                                                                Larry Swedroe

                                                                                 

                                                                                In this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Larry is the head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                                Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this series, they discuss mistake number 28: Do You Fail to Compare Your Funds to Proper Benchmarks? And mistake 29:

                                                                                Did you miss out on previous mistakes? Check them out:

                                                                                • ISMS 8: Larry Swedroe – Are You Overconfident in Your Skills?
                                                                                • ISMS 17: Larry Swedroe – Do You Project Recent Trends Indefinitely Into the Future?
                                                                                • ISMS 20: Larry Swedroe – Do You Extrapolate From Small Samples and Trust Your Intuition?
                                                                                • ISMS 23: Larry Swedroe – Do You Allow Yourself to Be Influenced by Your Ego and Herd Mentality?
                                                                                • ISMS 24: Larry Swedroe – Confusing Skill and Luck Can Stop You From Investing Wisely
                                                                                • ISMS 25: Larry Swedroe – Admit Your Mistakes and Don’t Listen to Fake Experts
                                                                                • ISMS 26: Larry Swedroe – Are You Subject to the Endowment Effect or the Hot Streak Fallacy?
                                                                                • ISMS 27: Larry Swedroe – Familiar Doesn’t Make It Safe and You’re Not Playing With the House’s Money
                                                                                • ISMS 29: Larry Swedroe – The Shiny Apple is Poisonous and Information is Not Knowledge
                                                                                • ISMS 30: Larry Swedroe – Do You Believe Your Fortune Is in the Stars or Rely on Misleading Information?
                                                                                • ISMS 34: Larry Swedroe – Consider All Hidden Costs Before You Invest
                                                                                • ISMS 35: Larry Swedroe – Great Companies Are Not Always High-Return Investments
                                                                                • ISMS 36: Larry Swedroe – Two Heads Are Not Better Than One When Investing
                                                                                • ISMS 37: Larry Swedroe – Pay Attention to a Fund’s Proper Benchmarks and Taxes
                                                                                • ISMS 38: Larry Swedroe – The Self-healing Mechanism of Risk Assets
                                                                                
                                                                                

                                                                                Mistake number 28: Do You Rely on a Fund’s Descriptive Name When Making Purchase Decisions?

                                                                                According to Larry, most investors tend to rely on the name of a fund and its descriptive value. So they’ll look at a small-cap fund and assume it invests exclusively in small or mid-cap stocks. However, the SEC allows sufficient leeway that can cause dramatic differences in that a large-cap fund can own a large-cap value fund and even some small-cap growth stocks. In such a case, you’ll not get the asset allocation you think you should and desire. And that’s especially true, of course, of active managers who have freedom to roam.

                                                                                Several academic studies have concluded that asset allocation determines the vast majority of the returns and risks of a portfolio and its long-term performance. Larry says that once investors decide on their investment policy (asset allocation), they must choose which funds to use as the building blocks of their portfolio. One choice involves implementing the strategy with active or passive managers. If investors choose passive managers, they can be highly confident that the specific investment style will be adhered to, as the fund will replicate the asset class or index it represents. There is no such assurance with active managers. With active managers, you cannot even rely on the fund’s name when making a choice.

                                                                                Larry advises that you should not choose a fund, even an index fund, by its name. Instead, you should carefully check its weighted average book-to-market and market capitalization levels. That’s the simplest way to tell the true nature of a fund.

                                                                                Mistake number 29: Do You Believe Active Management Is a Winner’s Game in Inefficient Markets?

                                                                                The efficiency of the market for U.S. large-cap stocks is so great that attempting to add value through active management is unlikely to produce positive results. However, investors cling to the idea that active management will likely add value in less efficient markets. Unfortunately, research shows that active managers in emerging markets tend to lose over whatever period, and the longer the horizon, the worse the performance.

                                                                                The asset class for which the active management argument is made most strongly is the emerging markets — an “inefficient” asset class if there ever was one. Many myths are perpetuated by the Wall Street establishment and the financial media, and that active management is the winning strategy in less efficient markets is just one of them. As the historical evidence demonstrates, active management is highly unlikely to outperform in even the allegedly inefficient emerging markets. In fact, the evidence suggests that active managers perform just as poorly in the “inefficient” markets as they do in the more efficient markets of the developed nations. Larry concludes that active managers don’t lose because they’re dumb; they lose because they’re expensive.

                                                                                About Larry Swedroe

                                                                                Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                                Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                                Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                                Larry is a prolific writer, regularly contributing to multiple outlets, including In this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Today, they discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this series, they discuss mistake number 28: Do You Fail to Compare Your Funds to Proper Benchmarks? And mistake 29: Do You Believe Active Management Is a Winner’s Game in Inefficient Markets?

                                                                                LEARNING: Don’t choose a fund by its name. Active management is highly unlikely to outperform even in inefficient emerging markets.

                                                                                 

                                                                                “Don’t choose a fund, even an index fund, by its name. Instead, you should carefully check its weighted average book-to-market and market capitalization levels.”

                                                                                Larry Swedroe

                                                                                 

                                                                                In this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Larry is the head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                                Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this series, they discuss mistake number 28: Do You Fail to Compare Your Funds to Proper Benchmarks? And mistake 29:

                                                                                Did you miss out on previous mistakes? Check them out:

                                                                                • ISMS 8: Larry Swedroe – Are You Overconfident in Your Skills?
                                                                                • ISMS 17: Larry Swedroe – Do You Project Recent Trends Indefinitely Into the Future?
                                                                                • ISMS 20: Larry Swedroe – Do You Extrapolate From Small Samples and Trust Your Intuition?
                                                                                • ISMS 23: Larry Swedroe – Do You Allow Yourself to Be Influenced by Your Ego and Herd Mentality?
                                                                                • ISMS 24: Larry Swedroe – Confusing Skill and Luck Can Stop You From Investing Wisely
                                                                                • ISMS 25: Larry Swedroe – Admit Your Mistakes and Don’t Listen to Fake Experts
                                                                                • ISMS 26: Larry Swedroe – Are You Subject to the Endowment Effect or the Hot Streak Fallacy?
                                                                                • ISMS 27: Larry Swedroe – Familiar Doesn’t Make It Safe and You’re Not Playing With the House’s Money
                                                                                • ISMS 29: Larry Swedroe – The Shiny Apple is Poisonous and Information is Not Knowledge
                                                                                • ISMS 30: Larry Swedroe – Do You Believe Your Fortune Is in the Stars or Rely on Misleading Information?
                                                                                • ISMS 34: Larry Swedroe – Consider All Hidden Costs Before You Invest
                                                                                • ISMS 35: Larry Swedroe – Great Companies Are Not Always High-Return Investments
                                                                                • ISMS 36: Larry Swedroe – Two Heads Are Not Better Than One When Investing
                                                                                • ISMS 37: Larry Swedroe – Pay Attention to a Fund’s Proper Benchmarks and Taxes
                                                                                • ISMS 38: Larry Swedroe – The Self-healing Mechanism of Risk Assets
                                                                                
                                                                                

                                                                                Mistake number 28: Do You Rely on a Fund’s Descriptive Name When Making Purchase Decisions?

                                                                                According to Larry, most investors tend to rely on the name of a fund and its descriptive value. So they’ll look at a small-cap fund and assume it invests exclusively in small or mid-cap stocks. However, the SEC allows sufficient leeway that can cause dramatic differences in that a large-cap fund can own a large-cap value fund and even some small-cap growth stocks. In such a case, you’ll not get the asset allocation you think you should and desire. And that’s especially true, of course, of active managers who have freedom to roam.

                                                                                Several academic studies have concluded that asset allocation determines the vast majority of the returns and risks of a portfolio and its long-term performance. Larry says that once investors decide on their investment policy (asset allocation), they must choose which funds to use as the building blocks of their portfolio. One choice involves implementing the strategy with active or passive managers. If investors choose passive managers, they can be highly confident that the specific investment style will be adhered to, as the fund will replicate the asset class or index it represents. There is no such assurance with active managers. With active managers, you cannot even rely on the fund’s name when making a choice.

                                                                                Larry advises that you should not choose a fund, even an index fund, by its name. Instead, you should carefully check its weighted average book-to-market and market capitalization levels. That’s the simplest way to tell the true nature of a fund.

                                                                                Mistake number 29: Do You Believe Active Management Is a Winner’s Game in Inefficient Markets?

                                                                                The efficiency of the market for U.S. large-cap stocks is so great that attempting to add value through active management is unlikely to produce positive results. However, investors cling to the idea that active management will likely add value in less efficient markets. Unfortunately, research shows that active managers in emerging markets tend to lose over whatever period, and the longer the horizon, the worse the performance.

                                                                                The asset class for which the active management argument is made most strongly is the emerging markets — an “inefficient” asset class if there ever was one. Many myths are perpetuated by the Wall Street establishment and the financial media, and that active management is the winning strategy in less efficient markets is just one of them. As the historical evidence demonstrates, active management is highly unlikely to outperform in even the allegedly inefficient emerging markets. In fact, the evidence suggests that active managers perform just as poorly in the “inefficient” markets as they do in the more efficient markets of the developed nations. Larry concludes that active managers don’t lose because they’re dumb; they lose because they’re expensive.

                                                                                About Larry Swedroe

                                                                                Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                                Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                                Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                                Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                                 

                                                                                [spp-transcript]

                                                                                 

                                                                                Connect with Larry Swedroe

                                                                                • LinkedIn
                                                                                • Twitter
                                                                                • Website
                                                                                • Books
                                                                                
                                                                                

                                                                                Andrew’s books

                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                • My Worst Investment Ever
                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                
                                                                                

                                                                                Andrew’s online programs

                                                                                • Valuation Master Class
                                                                                • The Become a Better Investor Community
                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                • Finance Made Ridiculously Simple
                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                • Achieve Your Goals
                                                                                
                                                                                

                                                                                Connect with Andrew Stotz:

                                                                                • astotz.com
                                                                                • LinkedIn
                                                                                • Facebook
                                                                                • Instagram
                                                                                • Twitter
                                                                                • YouTube
                                                                                • My Worst Investment Ever Podcast
                                                                                
                                                                                

                                                                                Further reading mentioned

                                                                                • Larry Swedroe and RC Balaban, Investment Mistakes Even Smart Investors Make and How to Avoid Them
                                                                                • Philip E. Tetlock, Expert Political Judgment: How Good Is It? How Can We Know?
                                                                                • Gary Belsky and Thomas Gilovich, Why Smart People Make Big Money Mistakes and How to Correct Them: Lessons from the Life-Changing Science of Behavioral Economics
                                                                                • Larry Swedroe, Think, Act, and Invest Like Warren Buffett: The Winning Strategy to Help You Achieve Your Financial and Life Goals
                                                                                • Larry Swedroe and Kevin Grogan, Reducing the Risk of Black Swans: Using the Science of Investing to Capture Returns with Less Volatility
                                                                                
                                                                                ]]>71e22cdf-cd71-424b-bf52-500fec1b8120Thu, 07 Mar 2024 06:00:00 +070043:57falsefullLark Davis - Take Your Profits and Run AwayBIO: Lark Davis is the Founder of the weekly crypto newsletter Wealth Mastery, which combines insider insights and in-depth market analysis to offer cryptocurrency investors the best opportunities to grow their wealth, stay ahead of the curve, and avoid costly mistakes.

                                                                                STORY: Lark invested in the Terra Luna cryptocurrency, which had a famous implosion. The volatility of the crypto market saw him lose all his profits and part of his capital.

                                                                                LEARNING: Never put your profits into something that could go down. Fully understand all aspects of risk exposure.

                                                                                 

                                                                                “The learning curve is massive in crypto, and even after years in the industry, I still get surprised by how I can get screwed.”

                                                                                Lark Davis

                                                                                 

                                                                                Guest profile

                                                                                Lark Davis is the Founder of the weekly crypto newsletter Wealth Mastery, which combines insider insights and in-depth market analysis to offer cryptocurrency investors the best opportunities to grow their wealth, stay ahead of the curve, and avoid costly mistakes.

                                                                                The newsletter has 100K+ subscribers and covers DeFi, NFTs, Altcoins, Technical Analysis, and more. Lark has been a crypto investor for more than seven years and has made millions of dollars—while also suffering significant losses—in the markets.

                                                                                He has been featured in leading digital currencies media platforms, including Coinpedia and CoinDesk, providing insights that help audiences consistently make money from cryptocurrency investments.

                                                                                You can find him on Twitter and YouTube.

                                                                                Worst investment ever

                                                                                Lark invested in the Terra Luna cryptocurrency, which had a famous implosion. The currency went up, and the investment was worth hundreds of thousands of dollars. The company also had a stable coin worth $1 linked to the Luna cryptocurrency. The more stablecoins were minted, the more the Luna token was taken off, and the market price increased. The reverse eventually, of course, applied as well. But this was the big hype coin everybody was talking about. Big venture capital firms were in it, and the Founder was the poster child on social media.

                                                                                It all came tumbling down eventually. Interestingly, shortly before Lark invested, his research assistant, who does the deep dives for the Wealth Mastery reports, did a report on the Luna crypto and concluded that it smelled fishy and didn’t like the idea of investing in it. Lark, however, went ahead and invested.

                                                                                By the time the coin started going on a downward spiral, Lark’s Luna position was around $100,000. That went to zero in about three days. Luckily, he didn’t ride them to zero. He sold them for around $6, but his profit fell to zero. He also had about $700,000 of stablecoins, in which he took a 20% loss.

                                                                                Lessons learned

                                                                                • Never put your profits into something that could go down.
                                                                                • Take your profits, put it in your bank, and run away.
                                                                                • Fully understand all aspects of risk exposure.
                                                                                • Crypto’s learning curve is massive.
                                                                                
                                                                                

                                                                                Andrew’s takeaways

                                                                                • Separate your wealth or profit from speculation money and put it in a safe place that won’t go down.
                                                                                • When it comes to human behavior, always expect a herd mentality.
                                                                                
                                                                                

                                                                                Actionable advice

                                                                                Go slow on-chain and test the waters first before you put 100% of your money into it. You’re not missing out on anything; there’s always going to be something new happening tomorrow.

                                                                                Lark’s recommendations

                                                                                Lark recommends reading his newsletter, Wealth Mastery, for updates on the latest market trends. He also recommends checking out various local exchanges to learn how trading indicators and coin mechanics work and all sorts of things regarding cryptocurrencies.

                                                                                No.1 goal for the next 12 months

                                                                                Lark’s number one goal for the next 12 months is to 10x his crypto portfolio in this bull market.

                                                                                Parting words

                                                                                 

                                                                                “With crypto, remember to take your profits, or the market will take them for you.”

                                                                                Lark Davis

                                                                                 

                                                                                [spp-transcript]

                                                                                 

                                                                                Connect with Lark Davis

                                                                                • LinkedIn
                                                                                • Twitter
                                                                                • YouTube
                                                                                • Website
                                                                                
                                                                                

                                                                                Andrew’s books

                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                • My Worst Investment Ever
                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                
                                                                                

                                                                                Andrew’s online programs

                                                                                • Valuation Master Class
                                                                                • The Become a Better Investor Community
                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                • Finance Made Ridiculously Simple
                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                • Achieve Your Goals
                                                                                
                                                                                

                                                                                Connect with Andrew Stotz:

                                                                                • astotz.com
                                                                                • LinkedIn
                                                                                • Facebook
                                                                                • Instagram
                                                                                • Threads
                                                                                • Twitter
                                                                                • YouTube
                                                                                • My Worst Investment Ever Podcast
                                                                                
                                                                                

                                                                                 

                                                                                ]]>BIO: Lark Davis is the Founder of the weekly crypto newsletter Wealth Mastery, which combines insider insights and in-depth market analysis to offer cryptocurrency investors the best opportunities to grow their wealth, stay ahead of the curve, and avoid costly mistakes.

                                                                                STORY: Lark invested in the Terra Luna cryptocurrency, which had a famous implosion. The volatility of the crypto market saw him lose all his profits and part of his capital.

                                                                                LEARNING: Never put your profits into something that could go down. Fully understand all aspects of risk exposure.

                                                                                 

                                                                                “The learning curve is massive in crypto, and even after years in the industry, I still get surprised by how I can get screwed.”

                                                                                Lark Davis

                                                                                 

                                                                                Guest profile

                                                                                Lark Davis is the Founder of the weekly crypto newsletter Wealth Mastery, which combines insider insights and in-depth market analysis to offer cryptocurrency investors the best opportunities to grow their wealth, stay ahead of the curve, and avoid costly mistakes.

                                                                                The newsletter has 100K+ subscribers and covers DeFi, NFTs, Altcoins, Technical Analysis, and more. Lark has been a crypto investor for more than seven years and has made millions of dollars—while also suffering significant losses—in the markets.

                                                                                He has been featured in leading digital currencies media platforms, including Coinpedia and CoinDesk, providing insights that help audiences consistently make money from cryptocurrency investments.

                                                                                You can find him on Twitter and YouTube.

                                                                                Worst investment ever

                                                                                Lark invested in the Terra Luna cryptocurrency, which had a famous implosion. The currency went up, and the investment was worth hundreds of thousands of dollars. The company also had a stable coin worth $1 linked to the Luna cryptocurrency. The more stablecoins were minted, the more the Luna token was taken off, and the market price increased. The reverse eventually, of course, applied as well. But this was the big hype coin everybody was talking about. Big venture capital firms were in it, and the Founder was the poster child on social media.

                                                                                It all came tumbling down eventually. Interestingly, shortly before Lark invested, his research assistant, who does the deep dives for the Wealth Mastery reports, did a report on the Luna crypto and concluded that it smelled fishy and didn’t like the idea of investing in it. Lark, however, went ahead and invested.

                                                                                By the time the coin started going on a downward spiral, Lark’s Luna position was around $100,000. That went to zero in about three days. Luckily, he didn’t ride them to zero. He sold them for around $6, but his profit fell to zero. He also had about $700,000 of stablecoins, in which he took a 20% loss.

                                                                                Lessons learned

                                                                                • Never put your profits into something that could go down.
                                                                                • Take your profits, put it in your bank, and run away.
                                                                                • Fully understand all aspects of risk exposure.
                                                                                • Crypto’s learning curve is massive.
                                                                                
                                                                                

                                                                                Andrew’s takeaways

                                                                                • Separate your wealth or profit from speculation money and put it in a safe place that won’t go down.
                                                                                • When it comes to human behavior, always expect a herd mentality.
                                                                                
                                                                                

                                                                                Actionable advice

                                                                                Go slow on-chain and test the waters first before you put 100% of your money into it. You’re not missing out on anything; there’s always going to be something new happening tomorrow.

                                                                                Lark’s recommendations

                                                                                Lark recommends reading his newsletter, Wealth Mastery, for updates on the latest market trends. He also recommends checking out various local exchanges to learn how trading indicators and coin mechanics work and all sorts of things regarding cryptocurrencies.

                                                                                No.1 goal for the next 12 months

                                                                                Lark’s number one goal for the next 12 months is to 10x his crypto portfolio in this bull market.

                                                                                Parting words

                                                                                 

                                                                                “With crypto, remember to take your profits, or the market will take them for you.”

                                                                                Lark Davis

                                                                                 

                                                                                [spp-transcript]

                                                                                 

                                                                                Connect with Lark Davis

                                                                                • LinkedIn
                                                                                • Twitter
                                                                                • YouTube
                                                                                • Website
                                                                                
                                                                                

                                                                                Andrew’s books

                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                • My Worst Investment Ever
                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                
                                                                                

                                                                                Andrew’s online programs

                                                                                • Valuation Master Class
                                                                                • The Become a Better Investor Community
                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                • Finance Made Ridiculously Simple
                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                • Achieve Your Goals
                                                                                
                                                                                

                                                                                Connect with Andrew Stotz:

                                                                                • astotz.com
                                                                                • LinkedIn
                                                                                • Facebook
                                                                                • Instagram
                                                                                • Threads
                                                                                • Twitter
                                                                                • YouTube
                                                                                • My Worst Investment Ever Podcast
                                                                                
                                                                                

                                                                                 

                                                                                ]]>94479528-31af-4e60-953a-7479f412f290Tue, 05 Mar 2024 06:00:00 +070034:53falsefullSam Primm - Be Intentional About What You Invest InBIO: Sam founded FasterFreedom to teach people like him to quit their jobs, become successful real estate investors, and achieve that same freedom and financial independence.

                                                                                STORY: Sam and his partner invested in a self-storage. They fixed the property a bit and built a couple more facilities. They didn’t know this space, and the investment has cost them about $500,000 of potential loss and probably more than they could have gained in revenue.

                                                                                LEARNING: Be intentional about what you invest in. Stick to what you know. Think through every expansion.

                                                                                 

                                                                                “Be intentional about what you invest in. You can’t be good at everything.”

                                                                                Sam Primm

                                                                                 

                                                                                Guest profile

                                                                                Sam Primm was born and raised in St. Louis, MO., to a father who was an engineer and a mom who was a teacher. He followed the path you’re told to do and ended up working a corporate job in the area and making a decent enough living. But there were a couple of problems.

                                                                                Sam was working a stressful 50-hour-a-week job for someone he didn’t like, and most of all, Sam wished he had more time and freedom for himself and his family. They deserved better. His wife deserved him to be around more, and he wanted more time to be around his daughters as they grew up.

                                                                                Eventually, Sam got into Real Estate, and after trying and failing—several times—he got some wins and started to learn what worked with consistency. This led him to own $45 million in assets, have 150+ single-family rentals, flip over 1,000 properties, and run his own property management company. Sam did it all in under nine years without using his money. But the best part is that it’s given Sam the time and freedom he has always wanted for himself and his family.

                                                                                Sam founded FasterFreedom to teach people like him to quit their jobs, become successful real estate investors, and achieve that same freedom and financial independence. Sam prides himself in practicing what he preaches, meaning all his lessons and tips are constantly updated and based on the real investing he’s doing right now- so you only learn what works and not through theory or outdated practices!

                                                                                Worst investment ever

                                                                                When the idea to add a self-storage facility to their assets was first brought to them, Sam and his partner said no. Then COVID hit, and they said yes. They didn’t know much about storage facilities, but the numbers looked ok, so they took it. They fixed the property and built more facilities because they had open land.

                                                                                They didn’t know this space, so they didn’t raise enough funds or manage properly because their mind was focused elsewhere. The property is now not generating income nor growing in value like it should. This investment has cost the partners about $500,000 of potential loss and even more in missed revenue.

                                                                                Lessons learned

                                                                                • Be intentional about what you invest in.
                                                                                • Don’t try to be good at everything; you can’t.
                                                                                • Stick to what you know.
                                                                                • Have proof of concept in what you want to invest in.
                                                                                
                                                                                

                                                                                Andrew’s takeaways

                                                                                • Take good care of your cash flow.
                                                                                • Focus on minimal investment and maximum cash flow.
                                                                                • Think through every expansion.
                                                                                • Don’t think your evidence of the existing success relates to your new idea, even if it seems like it’s the same thing. That’s not proof.
                                                                                
                                                                                

                                                                                Actionable advice

                                                                                Don’t just buy something because it’s cheap. Focus on what you’re good at and what’s proven.

                                                                                Sam’s recommendations

                                                                                Sam recommends taking advantage of the many available resources, such as his podcast, Professor Freedom. These resources will give you base-level knowledge to create a base-level confidence that allows you to take action.

                                                                                No.1 goal for the next 12 months

                                                                                Sam’s number one goal for the next 12 months is to scale his education business to its greatest potential.

                                                                                Parting words

                                                                                 

                                                                                “You’re not going to be successful without failing. Failure is literally a stepping stone on the path to success. So, figure out how to fail. Just don’t make the same mistake again. Learn from it. So if you avoid failure, you avoid success.”

                                                                                Sam Primm

                                                                                 

                                                                                [spp-transcript]

                                                                                 

                                                                                Connect with Sam Primm

                                                                                • LinkedIn
                                                                                • Twitter
                                                                                • Facebook
                                                                                • Instagram
                                                                                • YouTube
                                                                                • Website
                                                                                • Podcast
                                                                                • Book
                                                                                
                                                                                

                                                                                Andrew’s books

                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                • My Worst Investment Ever
                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                
                                                                                

                                                                                Andrew’s online programs

                                                                                • Valuation Master Class
                                                                                • The Become a Better Investor Community
                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                • Finance Made Ridiculously Simple
                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                • Achieve Your Goals
                                                                                
                                                                                

                                                                                Connect with Andrew Stotz:

                                                                                • astotz.com
                                                                                • LinkedIn
                                                                                • Facebook
                                                                                • Instagram
                                                                                • Threads
                                                                                • Twitter
                                                                                • YouTube
                                                                                • My Worst Investment Ever Podcast
                                                                                
                                                                                

                                                                                 

                                                                                ]]>BIO: Sam founded FasterFreedom to teach people like him to quit their jobs, become successful real estate investors, and achieve that same freedom and financial independence.

                                                                                STORY: Sam and his partner invested in a self-storage. They fixed the property a bit and built a couple more facilities. They didn’t know this space, and the investment has cost them about $500,000 of potential loss and probably more than they could have gained in revenue.

                                                                                LEARNING: Be intentional about what you invest in. Stick to what you know. Think through every expansion.

                                                                                 

                                                                                “Be intentional about what you invest in. You can’t be good at everything.”

                                                                                Sam Primm

                                                                                 

                                                                                Guest profile

                                                                                Sam Primm was born and raised in St. Louis, MO., to a father who was an engineer and a mom who was a teacher. He followed the path you’re told to do and ended up working a corporate job in the area and making a decent enough living. But there were a couple of problems.

                                                                                Sam was working a stressful 50-hour-a-week job for someone he didn’t like, and most of all, Sam wished he had more time and freedom for himself and his family. They deserved better. His wife deserved him to be around more, and he wanted more time to be around his daughters as they grew up.

                                                                                Eventually, Sam got into Real Estate, and after trying and failing—several times—he got some wins and started to learn what worked with consistency. This led him to own $45 million in assets, have 150+ single-family rentals, flip over 1,000 properties, and run his own property management company. Sam did it all in under nine years without using his money. But the best part is that it’s given Sam the time and freedom he has always wanted for himself and his family.

                                                                                Sam founded FasterFreedom to teach people like him to quit their jobs, become successful real estate investors, and achieve that same freedom and financial independence. Sam prides himself in practicing what he preaches, meaning all his lessons and tips are constantly updated and based on the real investing he’s doing right now- so you only learn what works and not through theory or outdated practices!

                                                                                Worst investment ever

                                                                                When the idea to add a self-storage facility to their assets was first brought to them, Sam and his partner said no. Then COVID hit, and they said yes. They didn’t know much about storage facilities, but the numbers looked ok, so they took it. They fixed the property and built more facilities because they had open land.

                                                                                They didn’t know this space, so they didn’t raise enough funds or manage properly because their mind was focused elsewhere. The property is now not generating income nor growing in value like it should. This investment has cost the partners about $500,000 of potential loss and even more in missed revenue.

                                                                                Lessons learned

                                                                                • Be intentional about what you invest in.
                                                                                • Don’t try to be good at everything; you can’t.
                                                                                • Stick to what you know.
                                                                                • Have proof of concept in what you want to invest in.
                                                                                
                                                                                

                                                                                Andrew’s takeaways

                                                                                • Take good care of your cash flow.
                                                                                • Focus on minimal investment and maximum cash flow.
                                                                                • Think through every expansion.
                                                                                • Don’t think your evidence of the existing success relates to your new idea, even if it seems like it’s the same thing. That’s not proof.
                                                                                
                                                                                

                                                                                Actionable advice

                                                                                Don’t just buy something because it’s cheap. Focus on what you’re good at and what’s proven.

                                                                                Sam’s recommendations

                                                                                Sam recommends taking advantage of the many available resources, such as his podcast, Professor Freedom. These resources will give you base-level knowledge to create a base-level confidence that allows you to take action.

                                                                                No.1 goal for the next 12 months

                                                                                Sam’s number one goal for the next 12 months is to scale his education business to its greatest potential.

                                                                                Parting words

                                                                                 

                                                                                “You’re not going to be successful without failing. Failure is literally a stepping stone on the path to success. So, figure out how to fail. Just don’t make the same mistake again. Learn from it. So if you avoid failure, you avoid success.”

                                                                                Sam Primm

                                                                                 

                                                                                [spp-transcript]

                                                                                 

                                                                                Connect with Sam Primm

                                                                                • LinkedIn
                                                                                • Twitter
                                                                                • Facebook
                                                                                • Instagram
                                                                                • YouTube
                                                                                • Website
                                                                                • Podcast
                                                                                • Book
                                                                                
                                                                                

                                                                                Andrew’s books

                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                • My Worst Investment Ever
                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                
                                                                                

                                                                                Andrew’s online programs

                                                                                • Valuation Master Class
                                                                                • The Become a Better Investor Community
                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                • Finance Made Ridiculously Simple
                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                • Achieve Your Goals
                                                                                
                                                                                

                                                                                Connect with Andrew Stotz:

                                                                                • astotz.com
                                                                                • LinkedIn
                                                                                • Facebook
                                                                                • Instagram
                                                                                • Threads
                                                                                • Twitter
                                                                                • YouTube
                                                                                • My Worst Investment Ever Podcast
                                                                                
                                                                                

                                                                                 

                                                                                ]]>18b44d8a-a8fc-4cd3-a316-da6f7c8c3094Fri, 01 Mar 2024 06:00:00 +070036:07falsefullMarc Faber - The Value of True DiversificationBIO: Dr. Marc Faber, renowned for his unconventional expertise in investment strategies, is a fund manager and author. He serves as the editor of the “Gloom Boom & Doom Report” and the “Monthly Market Commentary,” earning international recognition as the pessimistic stock market expert “Dr. Doom.”

                                                                                STORY: Marc recounts getting caught on the wrong side of the late-1990s dotcom bubble. He had been convinced that the tech crash was imminent and had taken heavy short positions, but at the turn of the millennium, the Fed injected massive liquidity. This unexpected rally sent the NASDAQ soaring another 30% into March 2000. Because one surviving company (Amazon) went up 100× while most others crashed, his timing error turned into a dramatic bubble loss.

                                                                                LEARNING: True diversification saves the day. Spreading money across stocks, bonds, cash, precious metals, and real estate can protect you when markets surprise.

                                                                                 

                                                                                “When you lend money to friends, you risk losing everything…you lose your money and you lose the friend.”

                                                                                Marc Faber

                                                                                 

                                                                                Guest profile

                                                                                Dr. Marc Faber, renowned for his unconventional expertise in investment strategies, is a fund manager and author. He serves as the editor of the “Gloom Boom & Doom Report” and the “Monthly Market Commentary,” earning international recognition as the pessimistic stock market expert “Dr. Doom.”

                                                                                Born in Switzerland in 1946, Faber pursued economics at the University of Zurich and achieved a magna cum laude doctorate in economics at just 24 years old.

                                                                                His career took him to White Weld & Company Limited in New York, Zurich, and Hong Kong between 1970 and 1978. From 1978 to 1990, Faber was instrumental in establishing the Asia business for Drexel Burnham Lambert (HK) Ltd.

                                                                                In 1990, he ventured into his own business. Faber’s monthly publications offer investors insights into potential market trends. While he maintains an office in Hong Kong, he has lived in Chiang Mai, Thailand, since 2001.

                                                                                Worst investment ever

                                                                                Marc cites two “worst” investments. The first was personal: lending money to friends. In his words, “to lend money to friends…is the worst investment you can make,” since those who are in trouble will pay back the banks first and will default on friends. He now refuses loans outright and will give small amounts as a gift if he wants to help.

                                                                                Going overly bearish in the dotcom bust

                                                                                Marc’s huge market failure was due to the dotcom bust. In 1999, he believed that most tech stocks would die in the dotcom crash. He shorted the NASDAQ heavily, expecting ten dead companies for every single survivor.

                                                                                But the markets had other plans. A liquidity injection by the Fed in late 1999 (amidst Y2K fears) sent the NASDAQ soaring 30% by March 2000. Ironically, nine out of ten technology short bets he made did go bust 100%, but one – Amazon – rose roughly 100 times.

                                                                                This one survivor erased his profit, turning his timing call into a massive dotcom bubble loss. As Marc admits, overbetting on a crash came at a cost: “being on the short side made it difficult to make money.”

                                                                                Lessons Learned

                                                                                • Diversification is key. Don’t put all your eggs in one market or asset class. Diversify investments across stocks, bonds, cash, real estate, precious metals, and other assets, as well as globally (US, Europe, Asia, and Emerging Markets). That way, it’s unlikely everything falls at the same time.
                                                                                • Avoid being too bearish. Markets can defy even the smartest predictions. One unexpected rally or winner can ruin a bear. Even if fundamentals look grim, stay flexible.
                                                                                • Respect risk management. Managing risk is often about preserving capital. Sit on the sidelines or cash if unsure, rather than chasing hyperbolic gains.
                                                                                • Personal finance is part of investing. He learned the hard way that lending money to friends is a risky proposition. It’s better to provide help as a gift instead of lending, because friends will default on you the moment pressure sets in. This underscores that investment risk management also includes everyday money decisions.
                                                                                • Inflation matters. Understand inflation’s nature. It can shift across sectors over time (e.g., from goods to services). Rising consumer prices tend to precede rising interest rates, which can put pressure on assets. In short, understand what inflation is and be prepared for its evolving impact.
                                                                                
                                                                                

                                                                                Andrew’s Takeaways

                                                                                • Even professionals get humbled. No one has a crystal ball. Be humble and understand that it is extremely difficult to time a market collapse.
                                                                                • Diversification is the answer. Global diversification is the hallmark of prudent risk management. By placing assets in instruments denominated in different countries and currencies, you reduce the exposure to any single bubble or crisis. This can include stocks, bonds, real estate, and bank accounts, diversified across the world, not all under the umbrella of a single economy.
                                                                                • Balance caution with conviction. Investment risk management means giving yourself some “wiggle room.” Don’t go 100% short or 100% long on a single theme. Tactically changing your strategy will save you from further losses.
                                                                                • Learn from history. Economies and markets run in cycles. Being inquisitive and learning (via books and past cycles) is an investor’s edge.
                                                                                
                                                                                

                                                                                Actionable Advice

                                                                                • Diversify globally and across asset classes. Hold equities, bonds, cash, property, metals, etc., in different regions. For example, own some US and European stocks, as well as funds in Asia, Latin America, or emerging markets. Keep bank accounts or bonds in multiple currencies (e.g., Swiss, US). True diversification means that one country’s policies or an asset bubble won’t wipe out your entire portfolio.
                                                                                • Don’t chase bubbles or panic. Resist the urge to make huge bets on hype (or despairing sell-offs). If your analysis says “sell everything,” at least sell in increments or hedge, because markets can still rally unexpectedly.
                                                                                • Focus on capital preservation. In uncertain markets, consider locking in gains or moving money to safer assets. In times like these, preserve your capital rather than aim at making a lot of money. In practice, that might mean having more cash or short-term bonds on hand.
                                                                                • Plan for inflation shifts. Keep some assets that can hedge inflation (e.g., real assets, inflation-protected bonds). Track which sectors are heating up. Marc notes that inflation is sneaky and can shift between goods, services, and assets, so a mix of investments (including real estate or commodities) can offer protection.
                                                                                • Avoid risky personal lending. If a friend asks to borrow, consider giving a small gift instead. Personal loans in tough times can become a “losing your money and your friend” situation. Treat such “investments” as non-recoverable.
                                                                                • Educate yourself continuously. Read and learn not only market trends but also the broader context of economics, politics, and even history. A well-rounded view helps spot risks early.
                                                                                
                                                                                

                                                                                Marc’s recommendations

                                                                                Marc recommends reading “The Economics of Inflation,” a deep dive into money printing and price cycles, and “Capitalism and Freedom,” a classic that explains how economic liberty underpins prosperity.

                                                                                No.1 goal for the next 12 months

                                                                                Marc’s goal for the next 12 months is to study the decline of the Roman Empire. He’s fascinated by how a powerful empire fell, noting it ultimately “ran out of money”. By delving into that history, Marc hopes to draw lessons about fiscal prudence and economic limits that can be applied to today’s world.

                                                                                Parting words

                                                                                 

                                                                                “Understand what inflation is and that it can shift from one sector to another sector.”

                                                                                Marc Faber

                                                                                 

                                                                                [spp-transcript]

                                                                                 

                                                                                Connect with Marc Faber

                                                                                • LinkedIn
                                                                                • Twitter
                                                                                • BIO: Dr. Marc Faber, renowned for his unconventional expertise in investment strategies, is a fund manager and author. He serves as the editor of the “Gloom Boom & Doom Report” and the “Monthly Market Commentary,” earning international recognition as the pessimistic stock market expert “Dr. Doom.”

                                                                                  STORY: Marc recounts getting caught on the wrong side of the late-1990s dotcom bubble. He had been convinced that the tech crash was imminent and had taken heavy short positions, but at the turn of the millennium, the Fed injected massive liquidity. This unexpected rally sent the NASDAQ soaring another 30% into March 2000. Because one surviving company (Amazon) went up 100× while most others crashed, his timing error turned into a dramatic bubble loss.

                                                                                  LEARNING: True diversification saves the day. Spreading money across stocks, bonds, cash, precious metals, and real estate can protect you when markets surprise.

                                                                                   

                                                                                  “When you lend money to friends, you risk losing everything…you lose your money and you lose the friend.”

                                                                                  Marc Faber

                                                                                   

                                                                                  Guest profile

                                                                                  Dr. Marc Faber, renowned for his unconventional expertise in investment strategies, is a fund manager and author. He serves as the editor of the “Gloom Boom & Doom Report” and the “Monthly Market Commentary,” earning international recognition as the pessimistic stock market expert “Dr. Doom.”

                                                                                  Born in Switzerland in 1946, Faber pursued economics at the University of Zurich and achieved a magna cum laude doctorate in economics at just 24 years old.

                                                                                  His career took him to White Weld & Company Limited in New York, Zurich, and Hong Kong between 1970 and 1978. From 1978 to 1990, Faber was instrumental in establishing the Asia business for Drexel Burnham Lambert (HK) Ltd.

                                                                                  In 1990, he ventured into his own business. Faber’s monthly publications offer investors insights into potential market trends. While he maintains an office in Hong Kong, he has lived in Chiang Mai, Thailand, since 2001.

                                                                                  Worst investment ever

                                                                                  Marc cites two “worst” investments. The first was personal: lending money to friends. In his words, “to lend money to friends…is the worst investment you can make,” since those who are in trouble will pay back the banks first and will default on friends. He now refuses loans outright and will give small amounts as a gift if he wants to help.

                                                                                  Going overly bearish in the dotcom bust

                                                                                  Marc’s huge market failure was due to the dotcom bust. In 1999, he believed that most tech stocks would die in the dotcom crash. He shorted the NASDAQ heavily, expecting ten dead companies for every single survivor.

                                                                                  But the markets had other plans. A liquidity injection by the Fed in late 1999 (amidst Y2K fears) sent the NASDAQ soaring 30% by March 2000. Ironically, nine out of ten technology short bets he made did go bust 100%, but one – Amazon – rose roughly 100 times.

                                                                                  This one survivor erased his profit, turning his timing call into a massive dotcom bubble loss. As Marc admits, overbetting on a crash came at a cost: “being on the short side made it difficult to make money.”

                                                                                  Lessons Learned

                                                                                  • Diversification is key. Don’t put all your eggs in one market or asset class. Diversify investments across stocks, bonds, cash, real estate, precious metals, and other assets, as well as globally (US, Europe, Asia, and Emerging Markets). That way, it’s unlikely everything falls at the same time.
                                                                                  • Avoid being too bearish. Markets can defy even the smartest predictions. One unexpected rally or winner can ruin a bear. Even if fundamentals look grim, stay flexible.
                                                                                  • Respect risk management. Managing risk is often about preserving capital. Sit on the sidelines or cash if unsure, rather than chasing hyperbolic gains.
                                                                                  • Personal finance is part of investing. He learned the hard way that lending money to friends is a risky proposition. It’s better to provide help as a gift instead of lending, because friends will default on you the moment pressure sets in. This underscores that investment risk management also includes everyday money decisions.
                                                                                  • Inflation matters. Understand inflation’s nature. It can shift across sectors over time (e.g., from goods to services). Rising consumer prices tend to precede rising interest rates, which can put pressure on assets. In short, understand what inflation is and be prepared for its evolving impact.
                                                                                  
                                                                                  

                                                                                  Andrew’s Takeaways

                                                                                  • Even professionals get humbled. No one has a crystal ball. Be humble and understand that it is extremely difficult to time a market collapse.
                                                                                  • Diversification is the answer. Global diversification is the hallmark of prudent risk management. By placing assets in instruments denominated in different countries and currencies, you reduce the exposure to any single bubble or crisis. This can include stocks, bonds, real estate, and bank accounts, diversified across the world, not all under the umbrella of a single economy.
                                                                                  • Balance caution with conviction. Investment risk management means giving yourself some “wiggle room.” Don’t go 100% short or 100% long on a single theme. Tactically changing your strategy will save you from further losses.
                                                                                  • Learn from history. Economies and markets run in cycles. Being inquisitive and learning (via books and past cycles) is an investor’s edge.
                                                                                  
                                                                                  

                                                                                  Actionable Advice

                                                                                  • Diversify globally and across asset classes. Hold equities, bonds, cash, property, metals, etc., in different regions. For example, own some US and European stocks, as well as funds in Asia, Latin America, or emerging markets. Keep bank accounts or bonds in multiple currencies (e.g., Swiss, US). True diversification means that one country’s policies or an asset bubble won’t wipe out your entire portfolio.
                                                                                  • Don’t chase bubbles or panic. Resist the urge to make huge bets on hype (or despairing sell-offs). If your analysis says “sell everything,” at least sell in increments or hedge, because markets can still rally unexpectedly.
                                                                                  • Focus on capital preservation. In uncertain markets, consider locking in gains or moving money to safer assets. In times like these, preserve your capital rather than aim at making a lot of money. In practice, that might mean having more cash or short-term bonds on hand.
                                                                                  • Plan for inflation shifts. Keep some assets that can hedge inflation (e.g., real assets, inflation-protected bonds). Track which sectors are heating up. Marc notes that inflation is sneaky and can shift between goods, services, and assets, so a mix of investments (including real estate or commodities) can offer protection.
                                                                                  • Avoid risky personal lending. If a friend asks to borrow, consider giving a small gift instead. Personal loans in tough times can become a “losing your money and your friend” situation. Treat such “investments” as non-recoverable.
                                                                                  • Educate yourself continuously. Read and learn not only market trends but also the broader context of economics, politics, and even history. A well-rounded view helps spot risks early.
                                                                                  
                                                                                  

                                                                                  Marc’s recommendations

                                                                                  Marc recommends reading “The Economics of Inflation,” a deep dive into money printing and price cycles, and “Capitalism and Freedom,” a classic that explains how economic liberty underpins prosperity.

                                                                                  No.1 goal for the next 12 months

                                                                                  Marc’s goal for the next 12 months is to study the decline of the Roman Empire. He’s fascinated by how a powerful empire fell, noting it ultimately “ran out of money”. By delving into that history, Marc hopes to draw lessons about fiscal prudence and economic limits that can be applied to today’s world.

                                                                                  Parting words

                                                                                   

                                                                                  “Understand what inflation is and that it can shift from one sector to another sector.”

                                                                                  Marc Faber

                                                                                   

                                                                                  [spp-transcript]

                                                                                   

                                                                                  Connect with Marc Faber

                                                                                  • LinkedIn
                                                                                  • Twitter
                                                                                  • Website
                                                                                  • Book
                                                                                  
                                                                                  

                                                                                  Andrew’s books

                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                  • My Worst Investment Ever
                                                                                  • 9 Valuation Mistakes and How to Avoid Them
                                                                                  • Transform Your Business with Dr.Deming’s 14 Points
                                                                                  
                                                                                  

                                                                                  Andrew’s online programs

                                                                                  • Valuation Master Class
                                                                                  • The Become a Better Investor Community
                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                  • Finance Made Ridiculously Simple
                                                                                  • FVMR Investing: Quantamental Investing Across the World
                                                                                  • Become a Great Presenter and Increase Your Influence
                                                                                  • Transform Your Business with Dr. Deming’s 14 Points
                                                                                  • Achieve Your Goals
                                                                                  
                                                                                  

                                                                                  Connect with Andrew Stotz:

                                                                                  • astotz.com
                                                                                  • LinkedIn
                                                                                  • Facebook
                                                                                  • Instagram
                                                                                  • Threads
                                                                                  • Twitter
                                                                                  • YouTube
                                                                                  • My Worst Investment Ever Podcast
                                                                                  
                                                                                  ]]>eeb9ba9f-ca6a-4b52-9dae-13f365f4e2adTue, 27 Feb 2024 06:00:00 +070056:21falsefullCoach JV - Diversify Inside and Outside the Asset ClassBIO: Coach JV believes that what you believe in your heart and what you think in your mind will eventually become your words and reality.

                                                                                  STORY: Coach JV was introduced to cryptocurrency and decided to invest without an exit plan. In just a year, his investment had fallen by 85%.

                                                                                  LEARNING: Diversify inside and outside the asset class. Pull out your money and play on the house money. When you make massive gains, take some profit.

                                                                                   

                                                                                  “Always take 24 hours to make a decision. When somebody comes to you very excited about something, stop for a moment, listen, use discernment, and also seek wise counsel.”

                                                                                  Coach JV

                                                                                   

                                                                                  Guest profile

                                                                                  What you believe in your heart and what you think in your mind will eventually become your words and your reality. If you can see it in your mind, eventually you can hold it right here in your hand; what you repeatedly do gets ingrained in your subconscious mind, and what gets ingrained in your subconscious mind becomes your unconscious activity.

                                                                                  Worst investment ever

                                                                                  Coach JV left corporate America super excited about entrepreneurship. However, he didn’t understand the ins and outs of entrepreneurship and scaling. So, at the very beginning, Coach JV lost all his money.

                                                                                  Then, this great promise of cryptocurrency came into Coach JV’s life. But he had this deep-rooted indoctrination around those types of things. Nonetheless, when Coach JV was introduced to a coin called XRP, he got curious and started researching it. He saw the excitement of all the money being made in cryptocurrency. He also decided to invest heavily.

                                                                                  Coach JV made a lot of money from his investment and couldn’t even keep up with all the different coins being pumped at him. Coach JV even became influential in the space.

                                                                                  Unfortunately, he got into this speculative asset with no game plan. Then, suddenly, and it seemed like overnight, he woke up and was down 85%. Coach JV went from a millionaire to a thousandaire between 2021 and 2022.

                                                                                  Lessons learned

                                                                                  • Diversify inside and outside the asset class.
                                                                                  • Pull out your money and play on the house money.
                                                                                  
                                                                                  

                                                                                  Andrew’s takeaways

                                                                                  • When you make massive gains, take some profit.
                                                                                  
                                                                                  

                                                                                  Actionable advice

                                                                                  Always take 24 hours to make a decision. When somebody comes to you very excited about something, stop for a moment, listen, use discernment, and also seek wise counsel.

                                                                                  No.1 goal for the next 12 months

                                                                                  Coach JV’s number one goal for the next 12 months is to stay non-emotional about what’s happening in America, remain focused on his fundamentals, and be as keen as possible not to get caught up in the greed gene.

                                                                                  Parting words

                                                                                   

                                                                                  “Remember what you believe in your heart and think in your mind will eventually become your words and your reality. If you can see it in your mind, eventually, you can hold it in your hands. What you repeatedly do gets ingrained in your subconscious mind. What gets ingrained in your subconscious mind becomes your unconscious activities.”

                                                                                  Coach JV

                                                                                   

                                                                                  [spp-transcript]

                                                                                   

                                                                                  Connect with Coach JV

                                                                                  • Twitter
                                                                                  • Facebook
                                                                                  • Instagram
                                                                                  • YouTube
                                                                                  • Website
                                                                                  
                                                                                  

                                                                                  Andrew’s books

                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                  • My Worst Investment Ever
                                                                                  • 9 Valuation Mistakes and How to Avoid Them
                                                                                  • Transform Your Business with Dr.Deming’s 14 Points
                                                                                  
                                                                                  

                                                                                  Andrew’s online programs

                                                                                  • Valuation Master Class
                                                                                  • The Become a Better Investor Community
                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                  • Finance Made Ridiculously Simple
                                                                                  • FVMR Investing: Quantamental Investing Across the World
                                                                                  • Become a Great Presenter and Increase Your Influence
                                                                                  • Transform Your Business with Dr. Deming’s 14 Points
                                                                                  • Achieve Your Goals
                                                                                  
                                                                                  

                                                                                  Connect with Andrew Stotz:

                                                                                  • astotz.com
                                                                                  • LinkedIn
                                                                                  • Facebook
                                                                                  • Instagram
                                                                                  • Threads
                                                                                  • Twitter
                                                                                  • YouTube
                                                                                  • My Worst Investment Ever Podcast
                                                                                  
                                                                                  ]]>BIO: Coach JV believes that what you believe in your heart and what you think in your mind will eventually become your words and reality.

                                                                                  STORY: Coach JV was introduced to cryptocurrency and decided to invest without an exit plan. In just a year, his investment had fallen by 85%.

                                                                                  LEARNING: Diversify inside and outside the asset class. Pull out your money and play on the house money. When you make massive gains, take some profit.

                                                                                   

                                                                                  “Always take 24 hours to make a decision. When somebody comes to you very excited about something, stop for a moment, listen, use discernment, and also seek wise counsel.”

                                                                                  Coach JV

                                                                                   

                                                                                  Guest profile

                                                                                  What you believe in your heart and what you think in your mind will eventually become your words and your reality. If you can see it in your mind, eventually you can hold it right here in your hand; what you repeatedly do gets ingrained in your subconscious mind, and what gets ingrained in your subconscious mind becomes your unconscious activity.

                                                                                  Worst investment ever

                                                                                  Coach JV left corporate America super excited about entrepreneurship. However, he didn’t understand the ins and outs of entrepreneurship and scaling. So, at the very beginning, Coach JV lost all his money.

                                                                                  Then, this great promise of cryptocurrency came into Coach JV’s life. But he had this deep-rooted indoctrination around those types of things. Nonetheless, when Coach JV was introduced to a coin called XRP, he got curious and started researching it. He saw the excitement of all the money being made in cryptocurrency. He also decided to invest heavily.

                                                                                  Coach JV made a lot of money from his investment and couldn’t even keep up with all the different coins being pumped at him. Coach JV even became influential in the space.

                                                                                  Unfortunately, he got into this speculative asset with no game plan. Then, suddenly, and it seemed like overnight, he woke up and was down 85%. Coach JV went from a millionaire to a thousandaire between 2021 and 2022.

                                                                                  Lessons learned

                                                                                  • Diversify inside and outside the asset class.
                                                                                  • Pull out your money and play on the house money.
                                                                                  
                                                                                  

                                                                                  Andrew’s takeaways

                                                                                  • When you make massive gains, take some profit.
                                                                                  
                                                                                  

                                                                                  Actionable advice

                                                                                  Always take 24 hours to make a decision. When somebody comes to you very excited about something, stop for a moment, listen, use discernment, and also seek wise counsel.

                                                                                  No.1 goal for the next 12 months

                                                                                  Coach JV’s number one goal for the next 12 months is to stay non-emotional about what’s happening in America, remain focused on his fundamentals, and be as keen as possible not to get caught up in the greed gene.

                                                                                  Parting words

                                                                                   

                                                                                  “Remember what you believe in your heart and think in your mind will eventually become your words and your reality. If you can see it in your mind, eventually, you can hold it in your hands. What you repeatedly do gets ingrained in your subconscious mind. What gets ingrained in your subconscious mind becomes your unconscious activities.”

                                                                                  Coach JV

                                                                                   

                                                                                  [spp-transcript]

                                                                                   

                                                                                  Connect with Coach JV

                                                                                  • Twitter
                                                                                  • Facebook
                                                                                  • Instagram
                                                                                  • YouTube
                                                                                  • Website
                                                                                  
                                                                                  

                                                                                  Andrew’s books

                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                  • My Worst Investment Ever
                                                                                  • 9 Valuation Mistakes and How to Avoid Them
                                                                                  • Transform Your Business with Dr.Deming’s 14 Points
                                                                                  
                                                                                  

                                                                                  Andrew’s online programs

                                                                                  • Valuation Master Class
                                                                                  • The Become a Better Investor Community
                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                  • Finance Made Ridiculously Simple
                                                                                  • FVMR Investing: Quantamental Investing Across the World
                                                                                  • Become a Great Presenter and Increase Your Influence
                                                                                  • Transform Your Business with Dr. Deming’s 14 Points
                                                                                  • Achieve Your Goals
                                                                                  
                                                                                  

                                                                                  Connect with Andrew Stotz:

                                                                                  • astotz.com
                                                                                  • LinkedIn
                                                                                  • Facebook
                                                                                  • Instagram
                                                                                  • Threads
                                                                                  • Twitter
                                                                                  • YouTube
                                                                                  • My Worst Investment Ever Podcast
                                                                                  
                                                                                  ]]>98dfacea-19b7-455b-8ddf-3b306ecbb966Tue, 20 Feb 2024 06:00:00 +070041:43falsefullISMS 38: Larry Swedroe – The Self-healing Mechanism of Risk AssetsIn this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Today, they discuss Larry’s recent piece, The Self-healing Mechanism of Risk Assets.

                                                                                  LEARNING: Don’t engage in resulting because there will be periods when an investment will underperform and others when it outperforms. Resist recency bias. Avoid performance chasing.

                                                                                   

                                                                                  “You don’t want to engage in resulting because there will be periods when an investment will underperform and others when it outperforms.”

                                                                                  Larry Swedroe

                                                                                   

                                                                                  In this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Larry is the head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                                  Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. Today, they discuss Larry’s recent piece, The Self-healing Mechanism of Risk Assets.

                                                                                  Did you miss out on previous mistakes? Check them out:

                                                                                  • ISMS 8: Larry Swedroe – Are You Overconfident in Your Skills?
                                                                                  • ISMS 17: Larry Swedroe – Do You Project Recent Trends Indefinitely Into the Future?
                                                                                  • ISMS 20: Larry Swedroe – Do You Extrapolate From Small Samples and Trust Your Intuition?
                                                                                  • ISMS 23: Larry Swedroe – Do You Allow Yourself to Be Influenced by Your Ego and Herd Mentality?
                                                                                  • ISMS 24: Larry Swedroe – Confusing Skill and Luck Can Stop You From Investing Wisely
                                                                                  • ISMS 25: Larry Swedroe – Admit Your Mistakes and Don’t Listen to Fake Experts
                                                                                  • ISMS 26: Larry Swedroe – Are You Subject to the Endowment Effect or the Hot Streak Fallacy?
                                                                                  • ISMS 27: Larry Swedroe – Familiar Doesn’t Make It Safe and You’re Not Playing With the House’s Money
                                                                                  • ISMS 29: Larry Swedroe – The Shiny Apple is Poisonous and Information is Not Knowledge
                                                                                  • ISMS 30: Larry Swedroe – Do You Believe Your Fortune Is in the Stars or Rely on Misleading Information?
                                                                                  • ISMS 34: Larry Swedroe – Consider All Hidden Costs Before You Invest
                                                                                  • ISMS 35: Larry Swedroe – Great Companies Are Not Always High-Return Investments
                                                                                  • ISMS 36: Larry Swedroe – Two Heads Are Not Better Than One When Investing
                                                                                  • ISMS 37: Larry Swedroe – Pay Attention to a Fund’s Proper Benchmarks and Taxes
                                                                                  
                                                                                  

                                                                                  Common biases in investing

                                                                                  One of the biggest problems Larry has found working with advisors and investors is certain biases that lead to mistakes. One is recency bias, which is the tendency to extrapolate the recent performance of assets into the future as if it’s inevitable.

                                                                                  Resisting recency bias is critical to earning the premiums available from all risk assets, including reinsurance. Wise investing, as Warren Buffett noted, is simple but not easy. That’s because investors must overcome all the behavioral biases, with recency among the most powerful. It’s tempting to sell out of an investment that has suffered losses because it’s easy to think losses will keep happening.

                                                                                  Another bias is performance chasing. This is buying after periods of strong performance when valuations are higher and expected returns are lower and selling after periods of poor performance when valuations are lower and expected returns are higher. What disciplined investors do is the opposite—rebalance to maintain their well-thought-out allocation to risky assets

                                                                                  Larry identifies engaging in resulting as another big issue. This is making the mistake of judging the quality of a decision by the outcome—which is unknown—versus judging it by the quality of the decision-making process.

                                                                                  The self-healing mechanism of risk assets

                                                                                  Problems usually arise when stocks or any asset class perform very poorly, and investors flee the costs of these mistakes that they make. However, Larry points out that they fail to understand that a self-healing mechanism is generally in place.

                                                                                  An excellent example of the self-healing mechanism at work is that value stocks underperformed by wide margins during the late 1990s technology/dot-com boom. For example, from 1995 to 1999, the S&P 500 Growth Index returned 33.6% per annum, outperforming the Russell 2000 Value Index by 20.5 percentage points per annum. That outperformance led to valuation spreads widening to historic levels. Over the following eight-year period, 2000-07, the Russell 2000 Value Index returned 12.6% per annum, outperforming the S&P 500 Growth Index’s return of -1.7% by 14.3 percentage points per annum. Over the full period, the Russell 2000 Value Index outperformed the S&P 500 Growth Index by 2.2% percentage points per annum (12.8% versus 10.6%).

                                                                                  The self-healing mechanism works not only with stocks and value versus growth but also with bonds, credit, insurance, and virtually any risk asset. Thanks to the self-healing mechanism, Larry cautions investors against engaging in resulting because there will be periods when an investment will underperform and others when it outperforms. Instead, he advises that they understand why certain investment vehicles are in their portfolios in the first place.

                                                                                  About Larry Swedroe

                                                                                  Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                                  Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                                  Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                                  Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                                   

                                                                                  [spp-transcript]

                                                                                   

                                                                                  Connect with Larry Swedroe

                                                                                  • In this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Today, they discuss Larry’s recent piece, The Self-healing Mechanism of Risk Assets.

                                                                                    LEARNING: Don’t engage in resulting because there will be periods when an investment will underperform and others when it outperforms. Resist recency bias. Avoid performance chasing.

                                                                                     

                                                                                    “You don’t want to engage in resulting because there will be periods when an investment will underperform and others when it outperforms.”

                                                                                    Larry Swedroe

                                                                                     

                                                                                    In this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Larry is the head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                                    Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. Today, they discuss Larry’s recent piece, The Self-healing Mechanism of Risk Assets.

                                                                                    Did you miss out on previous mistakes? Check them out:

                                                                                    • ISMS 8: Larry Swedroe – Are You Overconfident in Your Skills?
                                                                                    • ISMS 17: Larry Swedroe – Do You Project Recent Trends Indefinitely Into the Future?
                                                                                    • ISMS 20: Larry Swedroe – Do You Extrapolate From Small Samples and Trust Your Intuition?
                                                                                    • ISMS 23: Larry Swedroe – Do You Allow Yourself to Be Influenced by Your Ego and Herd Mentality?
                                                                                    • ISMS 24: Larry Swedroe – Confusing Skill and Luck Can Stop You From Investing Wisely
                                                                                    • ISMS 25: Larry Swedroe – Admit Your Mistakes and Don’t Listen to Fake Experts
                                                                                    • ISMS 26: Larry Swedroe – Are You Subject to the Endowment Effect or the Hot Streak Fallacy?
                                                                                    • ISMS 27: Larry Swedroe – Familiar Doesn’t Make It Safe and You’re Not Playing With the House’s Money
                                                                                    • ISMS 29: Larry Swedroe – The Shiny Apple is Poisonous and Information is Not Knowledge
                                                                                    • ISMS 30: Larry Swedroe – Do You Believe Your Fortune Is in the Stars or Rely on Misleading Information?
                                                                                    • ISMS 34: Larry Swedroe – Consider All Hidden Costs Before You Invest
                                                                                    • ISMS 35: Larry Swedroe – Great Companies Are Not Always High-Return Investments
                                                                                    • ISMS 36: Larry Swedroe – Two Heads Are Not Better Than One When Investing
                                                                                    • ISMS 37: Larry Swedroe – Pay Attention to a Fund’s Proper Benchmarks and Taxes
                                                                                    
                                                                                    

                                                                                    Common biases in investing

                                                                                    One of the biggest problems Larry has found working with advisors and investors is certain biases that lead to mistakes. One is recency bias, which is the tendency to extrapolate the recent performance of assets into the future as if it’s inevitable.

                                                                                    Resisting recency bias is critical to earning the premiums available from all risk assets, including reinsurance. Wise investing, as Warren Buffett noted, is simple but not easy. That’s because investors must overcome all the behavioral biases, with recency among the most powerful. It’s tempting to sell out of an investment that has suffered losses because it’s easy to think losses will keep happening.

                                                                                    Another bias is performance chasing. This is buying after periods of strong performance when valuations are higher and expected returns are lower and selling after periods of poor performance when valuations are lower and expected returns are higher. What disciplined investors do is the opposite—rebalance to maintain their well-thought-out allocation to risky assets

                                                                                    Larry identifies engaging in resulting as another big issue. This is making the mistake of judging the quality of a decision by the outcome—which is unknown—versus judging it by the quality of the decision-making process.

                                                                                    The self-healing mechanism of risk assets

                                                                                    Problems usually arise when stocks or any asset class perform very poorly, and investors flee the costs of these mistakes that they make. However, Larry points out that they fail to understand that a self-healing mechanism is generally in place.

                                                                                    An excellent example of the self-healing mechanism at work is that value stocks underperformed by wide margins during the late 1990s technology/dot-com boom. For example, from 1995 to 1999, the S&P 500 Growth Index returned 33.6% per annum, outperforming the Russell 2000 Value Index by 20.5 percentage points per annum. That outperformance led to valuation spreads widening to historic levels. Over the following eight-year period, 2000-07, the Russell 2000 Value Index returned 12.6% per annum, outperforming the S&P 500 Growth Index’s return of -1.7% by 14.3 percentage points per annum. Over the full period, the Russell 2000 Value Index outperformed the S&P 500 Growth Index by 2.2% percentage points per annum (12.8% versus 10.6%).

                                                                                    The self-healing mechanism works not only with stocks and value versus growth but also with bonds, credit, insurance, and virtually any risk asset. Thanks to the self-healing mechanism, Larry cautions investors against engaging in resulting because there will be periods when an investment will underperform and others when it outperforms. Instead, he advises that they understand why certain investment vehicles are in their portfolios in the first place.

                                                                                    About Larry Swedroe

                                                                                    Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                                    Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                                    Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                                    Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                                     

                                                                                    [spp-transcript]

                                                                                     

                                                                                    Connect with Larry Swedroe

                                                                                    • LinkedIn
                                                                                    • Twitter
                                                                                    • Website
                                                                                    • Books
                                                                                    
                                                                                    

                                                                                    Andrew’s books

                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                    • My Worst Investment Ever
                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                    
                                                                                    

                                                                                    Andrew’s online programs

                                                                                    • Valuation Master Class
                                                                                    • The Become a Better Investor Community
                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                    • Finance Made Ridiculously Simple
                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                    • Achieve Your Goals
                                                                                    
                                                                                    

                                                                                    Connect with Andrew Stotz:

                                                                                    • astotz.com
                                                                                    • LinkedIn
                                                                                    • Facebook
                                                                                    • Instagram
                                                                                    • Twitter
                                                                                    • YouTube
                                                                                    • My Worst Investment Ever Podcast
                                                                                    
                                                                                    

                                                                                    Further reading mentioned

                                                                                    • Larry Swedroe and RC Balaban, Investment Mistakes Even Smart Investors Make and How to Avoid Them
                                                                                    • Philip E. Tetlock, Expert Political Judgment: How Good Is It? How Can We Know?
                                                                                    • Gary Belsky and Thomas Gilovich, Why Smart People Make Big Money Mistakes and How to Correct Them: Lessons from the Life-Changing Science of Behavioral Economics
                                                                                    • Larry Swedroe, Think, Act, and Invest Like Warren Buffett: The Winning Strategy to Help You Achieve Your Financial and Life Goals
                                                                                    • Andrew L Berkin, Your Complete Guide to Factor-Based Investing: The Way Smart Money Invests Today
                                                                                    • Larry Swedroe and Kevin Grogan, Reducing the Risk of Black Swans: Using the Science of Investing to Capture Returns with Less Volatility
                                                                                    
                                                                                    ]]>f3f6bf1f-470f-431b-b863-0502adb4ac3eThu, 15 Feb 2024 06:00:00 +070036:41falsefullSolomon Thimothy - Give Yourself Permission to FailBIO: Solomon Thimothy is an entrepreneur with over 17 years of experience in marketing and sales. As the co-founder and CEO of OneIMS, a leading inbound marketing and sales agency, and Clickx, he has helped businesses double their revenue using the 10X Framework.

                                                                                    STORY: When Solomon started his service business, he built software unique to his business. The problem was it cost thousands of dollars, and he was a broke out-of-collage kid. His model was terrible; nobody would invest in his business.

                                                                                    LEARNING: Every entrepreneur fails, so give yourself permission to fail.

                                                                                     

                                                                                    “Make sure that whatever you invest in is what you want to spend your next decade trying to figure out.”

                                                                                    Solomon Thimothy

                                                                                     

                                                                                    Guest profile

                                                                                    Solomon Thimothy is a highly accomplished entrepreneur with over 17 years of experience in marketing and sales. As the co-founder and CEO of OneIMS, a leading inbound marketing and sales agency, and Clickx, he has helped businesses double their revenue using the 10X Framework. Solomon is also an expert in lead generation and customer acquisition, and a USA Today and Wall Street Journal best-selling author.

                                                                                    In addition to his work, Solomon is also an angel investor and startup advisor. He has helped numerous startups grow and scale, leveraging his marketing, sales, and business strategy expertise.

                                                                                    Worst investment ever

                                                                                    Solomon started a service company building websites right off college. He hired other college kids with zero experience, and the process was terrible. Due to their inexperience, Solomon and his staff spent much more time on the work, which led to less money at the end of the day. Solomon decided to create some systems to try and reduce this time wastage.

                                                                                    Being a techie, he thought of building software to help onboard customers and enable them to see their reports from the lead gen ads. The software would allow Solomon to automate the process.

                                                                                    This meant Solomon would build his own software. All this cost tens of millions of dollars, and he was just a kid out of college with barely enough money to pay the bills and now had to hire developers and pay thousands of dollars—money he didn’t have. On paper, this model was terrible; nobody would invest in his business.

                                                                                    Lessons learned

                                                                                    • Every entrepreneur fails, so permit yourself to fail.
                                                                                    
                                                                                    

                                                                                    Andrew’s takeaways

                                                                                    • Never develop your own app or software; use what already exists and has been tried and tested.
                                                                                    
                                                                                    

                                                                                    Actionable advice

                                                                                    Make sure that whatever you invest in is what you want to spend your next decade trying to figure out.

                                                                                    Solomon’s recommendations

                                                                                    Solomon recommends reading 10x Is Easier than 2x: How World-Class Entrepreneurs Achieve More by Doing Less to understand and apply the 10x framework.

                                                                                    No.1 goal for the next 12 months

                                                                                    Solomon’s number one goal for the next 12 months is to impact the business and income of 10,000 entrepreneurs.

                                                                                    Parting words

                                                                                     

                                                                                    “Keep taking risks. I know you want to reduce them, but there are those that will win big.”

                                                                                    Solomon Thimothy

                                                                                     

                                                                                    [spp-transcript]

                                                                                     

                                                                                    Connect with Solomon Thimothy

                                                                                    • Linkedin
                                                                                    • Twitter
                                                                                    • Facebook
                                                                                    • Instagram
                                                                                    • YouTube
                                                                                    • Website
                                                                                    • Podcast
                                                                                    
                                                                                    

                                                                                    Andrew’s books

                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                    • My Worst Investment Ever
                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                    
                                                                                    

                                                                                    Andrew’s online programs

                                                                                    • Valuation Master Class
                                                                                    • The Become a Better Investor Community
                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                    • Finance Made Ridiculously Simple
                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                    • Achieve Your Goals
                                                                                    
                                                                                    

                                                                                    Connect with Andrew Stotz:

                                                                                    • astotz.com
                                                                                    • LinkedIn
                                                                                    • Facebook
                                                                                    • Instagram
                                                                                    • Threads
                                                                                    • Twitter
                                                                                    • YouTube
                                                                                    • My Worst Investment Ever Podcast
                                                                                    
                                                                                    ]]>BIO: Solomon Thimothy is an entrepreneur with over 17 years of experience in marketing and sales. As the co-founder and CEO of OneIMS, a leading inbound marketing and sales agency, and Clickx, he has helped businesses double their revenue using the 10X Framework.

                                                                                    STORY: When Solomon started his service business, he built software unique to his business. The problem was it cost thousands of dollars, and he was a broke out-of-collage kid. His model was terrible; nobody would invest in his business.

                                                                                    LEARNING: Every entrepreneur fails, so give yourself permission to fail.

                                                                                     

                                                                                    “Make sure that whatever you invest in is what you want to spend your next decade trying to figure out.”

                                                                                    Solomon Thimothy

                                                                                     

                                                                                    Guest profile

                                                                                    Solomon Thimothy is a highly accomplished entrepreneur with over 17 years of experience in marketing and sales. As the co-founder and CEO of OneIMS, a leading inbound marketing and sales agency, and Clickx, he has helped businesses double their revenue using the 10X Framework. Solomon is also an expert in lead generation and customer acquisition, and a USA Today and Wall Street Journal best-selling author.

                                                                                    In addition to his work, Solomon is also an angel investor and startup advisor. He has helped numerous startups grow and scale, leveraging his marketing, sales, and business strategy expertise.

                                                                                    Worst investment ever

                                                                                    Solomon started a service company building websites right off college. He hired other college kids with zero experience, and the process was terrible. Due to their inexperience, Solomon and his staff spent much more time on the work, which led to less money at the end of the day. Solomon decided to create some systems to try and reduce this time wastage.

                                                                                    Being a techie, he thought of building software to help onboard customers and enable them to see their reports from the lead gen ads. The software would allow Solomon to automate the process.

                                                                                    This meant Solomon would build his own software. All this cost tens of millions of dollars, and he was just a kid out of college with barely enough money to pay the bills and now had to hire developers and pay thousands of dollars—money he didn’t have. On paper, this model was terrible; nobody would invest in his business.

                                                                                    Lessons learned

                                                                                    • Every entrepreneur fails, so permit yourself to fail.
                                                                                    
                                                                                    

                                                                                    Andrew’s takeaways

                                                                                    • Never develop your own app or software; use what already exists and has been tried and tested.
                                                                                    
                                                                                    

                                                                                    Actionable advice

                                                                                    Make sure that whatever you invest in is what you want to spend your next decade trying to figure out.

                                                                                    Solomon’s recommendations

                                                                                    Solomon recommends reading 10x Is Easier than 2x: How World-Class Entrepreneurs Achieve More by Doing Less to understand and apply the 10x framework.

                                                                                    No.1 goal for the next 12 months

                                                                                    Solomon’s number one goal for the next 12 months is to impact the business and income of 10,000 entrepreneurs.

                                                                                    Parting words

                                                                                     

                                                                                    “Keep taking risks. I know you want to reduce them, but there are those that will win big.”

                                                                                    Solomon Thimothy

                                                                                     

                                                                                    [spp-transcript]

                                                                                     

                                                                                    Connect with Solomon Thimothy

                                                                                    • Linkedin
                                                                                    • Twitter
                                                                                    • Facebook
                                                                                    • Instagram
                                                                                    • YouTube
                                                                                    • Website
                                                                                    • Podcast
                                                                                    
                                                                                    

                                                                                    Andrew’s books

                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                    • My Worst Investment Ever
                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                    
                                                                                    

                                                                                    Andrew’s online programs

                                                                                    • Valuation Master Class
                                                                                    • The Become a Better Investor Community
                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                    • Finance Made Ridiculously Simple
                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                    • Achieve Your Goals
                                                                                    
                                                                                    

                                                                                    Connect with Andrew Stotz:

                                                                                    • astotz.com
                                                                                    • LinkedIn
                                                                                    • Facebook
                                                                                    • Instagram
                                                                                    • Threads
                                                                                    • Twitter
                                                                                    • YouTube
                                                                                    • My Worst Investment Ever Podcast
                                                                                    
                                                                                    ]]>9e9a34d9-092d-4c86-9363-8c9ccd5786d4Tue, 13 Feb 2024 06:00:00 +070039:28falsefullAnthony Greer - Be Patient and Willing to Get Rich SlowBIO: Tony began a career in equity sales in varying capacities, including running sales and trading at Bank Hapoalim for three years and a team of sales traders at Dahlman Rose for five years. In November 2016, Tony launched the Morning Navigator, a macro trading newsletter distributed to over 800 professionals worldwide.

                                                                                    STORY: Tony invested six figures into a small ophthalmic company his friend told him about. He didn’t know much about the company besides what his friend told him. He lost investment when the share price collapsed.

                                                                                    LEARNING: Understand the nuts and bolts of the business you want to invest in. Be patient and willing to get rich slowly. The stock markets are for growing wealth, not creating it. Time is the only surefire thing on your side.

                                                                                     

                                                                                    “Live to trade another day.”

                                                                                    Anthony Greer

                                                                                     

                                                                                    Guest profile

                                                                                    After graduating from Cornell University in 1990, Anthony Greer began his trading career in the foreign exchange market for Sumitomo Bank and Union Bank of Switzerland, where he began running large bank books. He joined the J. Aron division of Goldman Sachs in 1994, where he learned the rigor of risk management in trading gold and the Goldman Sachs Commodities Index. Tony left the commodity desk at Goldman Sachs to launch his equity trading operation in 2000, surfing the dot.com crash for two years. Tony began a career in equity sales in varying capacities, including running sales and trading at Bank Hapoalim for three years and a team of sales traders at Dahlman Rose for five years. In November 2016, Tony launched the Morning Navigator, a macro trading newsletter currently distributed to over 800 professionals worldwide.

                                                                                    Worst investment ever

                                                                                    When Tony was at Goldman Sachs in the ’90s, he managed to get into the Dotcom bubble. His love for music led him to discover Amazon. Tony would order records he was dying to have on Amazon, which would be delivered to his door in a few days. This business model fascinated Tony so much that he invested in tech stocks.

                                                                                    During that period, Tony decided to expand his portfolio. A friend of his put a name in front of him. The friend insisted that he knew a lot about the company and that it would be a nationwide chain where everybody went to check their eyes and buy glasses. He said that PE funds were investing in it. Tony amassed a massive position in this company, whose shares sold at 20 cents a share. Tony had six figures worth of this little ophthalmic company that he didn’t know much about. Suddenly, the bottom dropped out, and the PE companies sold their shares, causing the share price to collapse even further.

                                                                                    Lessons learned

                                                                                    • Always consider the total dollar value of money invested, no matter what percentage of your portfolio it is.
                                                                                    • First, understand the nuts and bolts of the business you want to invest in.
                                                                                    • Starting early is very valuable. Be patient and willing to get rich slowly.
                                                                                    
                                                                                    

                                                                                    Andrew’s takeaways

                                                                                    • Position sizing matters most, no matter how much you want to make your investment a big bet.
                                                                                    • The stock markets are for growing wealth, not creating it.
                                                                                    • Time is the only surefire thing on your side.
                                                                                    
                                                                                    

                                                                                    Actionable advice

                                                                                    Live to trade another day by trading carefully without greed.

                                                                                    Tony’s recommendations

                                                                                    Tony recommends subscribing to his Morning Navigator newsletter and reading No Worries: How to live a stress-free financial life. The book is about getting the three big ones right, i.e., education, home, and car. You’ll learn how to live a life without worrying about your finances.

                                                                                    No.1 goal for the next 12 months

                                                                                    Tony’s number one goal for the next 12 months is to immerse himself in his business.

                                                                                    Parting words

                                                                                     

                                                                                    “If you’re interested in getting some help looking for trades and taking risks, contact me; that’s what I do.”

                                                                                    Anthony Greer

                                                                                     

                                                                                    [spp-transcript]

                                                                                     

                                                                                    Connect with Anthony Greer

                                                                                    • Linkedin
                                                                                    • Twitter
                                                                                    • Website
                                                                                    • Podcast
                                                                                    
                                                                                    

                                                                                    Andrew’s books

                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                    • My Worst Investment Ever
                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                    
                                                                                    

                                                                                    Andrew’s online programs

                                                                                    • Valuation Master Class
                                                                                    • The Become a Better Investor Community
                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                    • Finance Made Ridiculously Simple
                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                    • Achieve Your Goals
                                                                                    
                                                                                    

                                                                                    Connect with Andrew Stotz:

                                                                                    • astotz.com
                                                                                    • LinkedIn
                                                                                    • Facebook
                                                                                    • Instagram
                                                                                    • Threads
                                                                                    • Twitter
                                                                                    • YouTube
                                                                                    • My Worst Investment Ever Podcast
                                                                                    
                                                                                    ]]>BIO: Tony began a career in equity sales in varying capacities, including running sales and trading at Bank Hapoalim for three years and a team of sales traders at Dahlman Rose for five years. In November 2016, Tony launched the Morning Navigator, a macro trading newsletter distributed to over 800 professionals worldwide.

                                                                                    STORY: Tony invested six figures into a small ophthalmic company his friend told him about. He didn’t know much about the company besides what his friend told him. He lost investment when the share price collapsed.

                                                                                    LEARNING: Understand the nuts and bolts of the business you want to invest in. Be patient and willing to get rich slowly. The stock markets are for growing wealth, not creating it. Time is the only surefire thing on your side.

                                                                                     

                                                                                    “Live to trade another day.”

                                                                                    Anthony Greer

                                                                                     

                                                                                    Guest profile

                                                                                    After graduating from Cornell University in 1990, Anthony Greer began his trading career in the foreign exchange market for Sumitomo Bank and Union Bank of Switzerland, where he began running large bank books. He joined the J. Aron division of Goldman Sachs in 1994, where he learned the rigor of risk management in trading gold and the Goldman Sachs Commodities Index. Tony left the commodity desk at Goldman Sachs to launch his equity trading operation in 2000, surfing the dot.com crash for two years. Tony began a career in equity sales in varying capacities, including running sales and trading at Bank Hapoalim for three years and a team of sales traders at Dahlman Rose for five years. In November 2016, Tony launched the Morning Navigator, a macro trading newsletter currently distributed to over 800 professionals worldwide.

                                                                                    Worst investment ever

                                                                                    When Tony was at Goldman Sachs in the ’90s, he managed to get into the Dotcom bubble. His love for music led him to discover Amazon. Tony would order records he was dying to have on Amazon, which would be delivered to his door in a few days. This business model fascinated Tony so much that he invested in tech stocks.

                                                                                    During that period, Tony decided to expand his portfolio. A friend of his put a name in front of him. The friend insisted that he knew a lot about the company and that it would be a nationwide chain where everybody went to check their eyes and buy glasses. He said that PE funds were investing in it. Tony amassed a massive position in this company, whose shares sold at 20 cents a share. Tony had six figures worth of this little ophthalmic company that he didn’t know much about. Suddenly, the bottom dropped out, and the PE companies sold their shares, causing the share price to collapse even further.

                                                                                    Lessons learned

                                                                                    • Always consider the total dollar value of money invested, no matter what percentage of your portfolio it is.
                                                                                    • First, understand the nuts and bolts of the business you want to invest in.
                                                                                    • Starting early is very valuable. Be patient and willing to get rich slowly.
                                                                                    
                                                                                    

                                                                                    Andrew’s takeaways

                                                                                    • Position sizing matters most, no matter how much you want to make your investment a big bet.
                                                                                    • The stock markets are for growing wealth, not creating it.
                                                                                    • Time is the only surefire thing on your side.
                                                                                    
                                                                                    

                                                                                    Actionable advice

                                                                                    Live to trade another day by trading carefully without greed.

                                                                                    Tony’s recommendations

                                                                                    Tony recommends subscribing to his Morning Navigator newsletter and reading No Worries: How to live a stress-free financial life. The book is about getting the three big ones right, i.e., education, home, and car. You’ll learn how to live a life without worrying about your finances.

                                                                                    No.1 goal for the next 12 months

                                                                                    Tony’s number one goal for the next 12 months is to immerse himself in his business.

                                                                                    Parting words

                                                                                     

                                                                                    “If you’re interested in getting some help looking for trades and taking risks, contact me; that’s what I do.”

                                                                                    Anthony Greer

                                                                                     

                                                                                    [spp-transcript]

                                                                                     

                                                                                    Connect with Anthony Greer

                                                                                    • Linkedin
                                                                                    • Twitter
                                                                                    • Website
                                                                                    • Podcast
                                                                                    
                                                                                    

                                                                                    Andrew’s books

                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                    • My Worst Investment Ever
                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                    
                                                                                    

                                                                                    Andrew’s online programs

                                                                                    • Valuation Master Class
                                                                                    • The Become a Better Investor Community
                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                    • Finance Made Ridiculously Simple
                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                    • Achieve Your Goals
                                                                                    
                                                                                    

                                                                                    Connect with Andrew Stotz:

                                                                                    • astotz.com
                                                                                    • LinkedIn
                                                                                    • Facebook
                                                                                    • Instagram
                                                                                    • Threads
                                                                                    • Twitter
                                                                                    • YouTube
                                                                                    • My Worst Investment Ever Podcast
                                                                                    
                                                                                    ]]>ba5cf30d-8351-44e4-a3bf-57903c5444e4Thu, 08 Feb 2024 06:00:00 +070036:28falsefullKevin Sutantyo - You Have to Back the Right FoundersBIO: Kevin Sutantyo is the Partner for South East Asia investments for Sovereign’s Capital, a venture capital fund focused on early-stage, tech-driven, scalable companies.

                                                                                    STORY: Kevin invested in a company, thinking that he had more influence over the outcome of the company than he actually did. So, he directed the company owners on what to do, making them over-dependent on Kevin’s opinion. As an investor, he wasn’t always in the office, so sometimes he wouldn’t be reachable. The company would get stuck without Kevin’s decision.

                                                                                    LEARNING: You have to back the right founders. As investors, you’re here to guide companies, not to be prescriptive. The founders ultimately have to make final decisions because it’s still their company.

                                                                                     

                                                                                    “As investors we’re here to guide companies, but not be prescriptive. We need to help them when they ask for our help.”

                                                                                    Kevin Sutantiyo

                                                                                     

                                                                                    Guest profile

                                                                                    Kevin Sutantyo is the Partner for South East Asia investments for Sovereign’s Capital, a venture capital fund focused on early-stage, tech-driven, scalable companies.

                                                                                    Kevin was an active Angel investor in both the US and SEA prior to his work at Sovereign’s Capital.

                                                                                    He was an operator/investor for four years at an environmental biotechnology company focused on waste management.

                                                                                    Kevin also has experience with the Indonesian public markets as a Commissioner at a local Indonesian securities brokerage, maintaining a fit and proper standing with the Indonesian regulator (Otoritas Jasa Keuangan).

                                                                                    Worst investment ever

                                                                                    Kevin’s worst mistake was investing in a company and thinking he had more influence over the company’s outcome than he actually did. For some reason, Kevin thought he was more experienced and knew better, so he directed the company owners on what to do. This made them over-dependent on Kevin’s opinion. As an investor, he wasn’t always in the office, so sometimes he wouldn’t be reachable. The company would get stuck without Kevin’s decision.

                                                                                    Lessons learned

                                                                                    • You have to back the right founders.
                                                                                    • As investors, you’re here to guide companies, not to be prescriptive. Help them only when they ask.
                                                                                    • The founders ultimately have to make final decisions because it’s still their company.
                                                                                    • Realize that your influence may have some limitations.
                                                                                    • Trust the founder.
                                                                                    • Endeavor to be in a helpful position instead of a combative one, even when you and the founder have a difference of opinion.
                                                                                    
                                                                                    

                                                                                    Andrew’s takeaways

                                                                                    • As an angel investor, your responsibility is to provide ideas and outside views.
                                                                                    
                                                                                    

                                                                                    Actionable advice

                                                                                    Don’t be a burden to the company. Take the approach that you’re investing in someone’s hopes, dreams, and mission and are here to support it. If you don’t believe in those hopes, dreams, and missions, don’t invest. Wait until you find another company that will align with precisely what you are looking for.

                                                                                    No.1 goal for the next 12 months

                                                                                    Kevin’s number one goal for the next 12 months is to continue with the fundraising trail. At the same time, he’ll continue looking for new, high-growth, and potential startups in Southeast Asia.

                                                                                    Parting words

                                                                                     

                                                                                    “Be excited about the investment space and innovation. Get in there, and keep building. Our region is exciting, and I do see a bright future ahead.”

                                                                                    Kevin Sutantiyo

                                                                                     

                                                                                    [spp-transcript]

                                                                                     

                                                                                    Connect with Kevin Sutantiyo

                                                                                    • Linkedin
                                                                                    • Website
                                                                                    
                                                                                    

                                                                                    Andrew’s books

                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                    • My Worst Investment Ever
                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                    
                                                                                    

                                                                                    Andrew’s online programs

                                                                                    • Valuation Master Class
                                                                                    • The Become a Better Investor Community
                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                    • Finance Made Ridiculously Simple
                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                    • Achieve Your Goals
                                                                                    
                                                                                    

                                                                                    Connect with Andrew Stotz:

                                                                                    • astotz.com
                                                                                    • LinkedIn
                                                                                    • Facebook
                                                                                    • Instagram
                                                                                    • Threads
                                                                                    • Twitter
                                                                                    • YouTube
                                                                                    • My Worst Investment Ever Podcast
                                                                                    
                                                                                    ]]>BIO: Kevin Sutantyo is the Partner for South East Asia investments for Sovereign’s Capital, a venture capital fund focused on early-stage, tech-driven, scalable companies.

                                                                                    STORY: Kevin invested in a company, thinking that he had more influence over the outcome of the company than he actually did. So, he directed the company owners on what to do, making them over-dependent on Kevin’s opinion. As an investor, he wasn’t always in the office, so sometimes he wouldn’t be reachable. The company would get stuck without Kevin’s decision.

                                                                                    LEARNING: You have to back the right founders. As investors, you’re here to guide companies, not to be prescriptive. The founders ultimately have to make final decisions because it’s still their company.

                                                                                     

                                                                                    “As investors we’re here to guide companies, but not be prescriptive. We need to help them when they ask for our help.”

                                                                                    Kevin Sutantiyo

                                                                                     

                                                                                    Guest profile

                                                                                    Kevin Sutantyo is the Partner for South East Asia investments for Sovereign’s Capital, a venture capital fund focused on early-stage, tech-driven, scalable companies.

                                                                                    Kevin was an active Angel investor in both the US and SEA prior to his work at Sovereign’s Capital.

                                                                                    He was an operator/investor for four years at an environmental biotechnology company focused on waste management.

                                                                                    Kevin also has experience with the Indonesian public markets as a Commissioner at a local Indonesian securities brokerage, maintaining a fit and proper standing with the Indonesian regulator (Otoritas Jasa Keuangan).

                                                                                    Worst investment ever

                                                                                    Kevin’s worst mistake was investing in a company and thinking he had more influence over the company’s outcome than he actually did. For some reason, Kevin thought he was more experienced and knew better, so he directed the company owners on what to do. This made them over-dependent on Kevin’s opinion. As an investor, he wasn’t always in the office, so sometimes he wouldn’t be reachable. The company would get stuck without Kevin’s decision.

                                                                                    Lessons learned

                                                                                    • You have to back the right founders.
                                                                                    • As investors, you’re here to guide companies, not to be prescriptive. Help them only when they ask.
                                                                                    • The founders ultimately have to make final decisions because it’s still their company.
                                                                                    • Realize that your influence may have some limitations.
                                                                                    • Trust the founder.
                                                                                    • Endeavor to be in a helpful position instead of a combative one, even when you and the founder have a difference of opinion.
                                                                                    
                                                                                    

                                                                                    Andrew’s takeaways

                                                                                    • As an angel investor, your responsibility is to provide ideas and outside views.
                                                                                    
                                                                                    

                                                                                    Actionable advice

                                                                                    Don’t be a burden to the company. Take the approach that you’re investing in someone’s hopes, dreams, and mission and are here to support it. If you don’t believe in those hopes, dreams, and missions, don’t invest. Wait until you find another company that will align with precisely what you are looking for.

                                                                                    No.1 goal for the next 12 months

                                                                                    Kevin’s number one goal for the next 12 months is to continue with the fundraising trail. At the same time, he’ll continue looking for new, high-growth, and potential startups in Southeast Asia.

                                                                                    Parting words

                                                                                     

                                                                                    “Be excited about the investment space and innovation. Get in there, and keep building. Our region is exciting, and I do see a bright future ahead.”

                                                                                    Kevin Sutantiyo

                                                                                     

                                                                                    [spp-transcript]

                                                                                     

                                                                                    Connect with Kevin Sutantiyo

                                                                                    • Linkedin
                                                                                    • Website
                                                                                    
                                                                                    

                                                                                    Andrew’s books

                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                    • My Worst Investment Ever
                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                    
                                                                                    

                                                                                    Andrew’s online programs

                                                                                    • Valuation Master Class
                                                                                    • The Become a Better Investor Community
                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                    • Finance Made Ridiculously Simple
                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                    • Achieve Your Goals
                                                                                    
                                                                                    

                                                                                    Connect with Andrew Stotz:

                                                                                    • astotz.com
                                                                                    • LinkedIn
                                                                                    • Facebook
                                                                                    • Instagram
                                                                                    • Threads
                                                                                    • Twitter
                                                                                    • YouTube
                                                                                    • My Worst Investment Ever Podcast
                                                                                    
                                                                                    ]]>6a406077-2a4e-40ce-afcc-e7eba02445ccTue, 06 Feb 2024 06:00:00 +070026:13falsefullDan McClure - Understand Who You Are and What You’re AboutBIO: Dan McClure is an innovation choreographer. That’s someone whose job is to run into burning buildings, looking for opportunities to reinvent how the world works.

                                                                                    STORY: Dan took up a senior management job because his friends and family insisted he should have a ‘real’ job. However, Dan hated the job and was terrible at it.

                                                                                    LEARNING: Understand who you are and what you’re about. Be committed to following your passion and talents. Otherwise, you’ll be dragged into things that make you miserable.

                                                                                     

                                                                                    “Have the courage to say; I’m not good at that, and therefore, I’m not going to build my life around it. Instead, I’m going to embrace these other things that I am good at.”

                                                                                    Dan McClure

                                                                                     

                                                                                    Guest profile

                                                                                    Dan McClure is an innovation choreographer. That’s someone whose job is to run into burning buildings, looking for opportunities to reinvent the way the world works. He’s a thought leader in the emerging practice of ecosystem innovation and the co-author of the Fast Company Press book “Do Bigger Things – A Practical Guide to Powerful Innovation in a Changing World.” Across his 40-year career, he’s worked with firms facing the threat of obsolescence, helped business pioneers thrive in fast-changing markets, and supported activists tackling tough challenges like climate change. He’s a passionate optimist who’s excited about the future.

                                                                                    Worst investment ever

                                                                                    When Dan was in college, he was looking for something to do. He was thinking of the Peace Corps. Dan applied and was three weeks away from traveling. While doing the medical exam, the doctor told him he had an umbilical hernia, and they didn’t let any hernias into the Peace Corps. And with that, Dan was out of the Peace Corps.

                                                                                    Dan found a job at a local utility company as an engineer. It was a good job, but he wasn’t very good at it. Dan was chugging along. Then he realized if he wrote a computer program, it could do his job, and Dan wouldn’t have to do everything he was doing. So Dan started writing the computer program. Then, the federal government deregulated the entire energy industry and threw everything into turmoil. Luckily, Dan had a computer program that could save the day. He got an innovation team and started fixing and changing things.

                                                                                    Everybody around Dan kept telling him to get a real job. His innovation stuff wasn’t so cool back then. After about six or seven years, things began to calm down. There was a senior manager position in the newly created marketing department in Dan’s company. He decided to take the job. Finally, he had a real job and could settle down. With that job, Dan could move up in the company and be an executive-level person. This was a great opportunity, but Dan hated the job. And even worse than that, he was terrible at it. Dan had invested his future in this success that he had earned, and it was what everybody else said he should want and do, but it was a catastrophe.

                                                                                    Lessons learned

                                                                                    • Understand who you are and what you’re about.
                                                                                    • Be committed to following your passion and talents. Otherwise, you’ll be dragged into things that make you miserable.
                                                                                    
                                                                                    

                                                                                    Andrew’s takeaways

                                                                                    • Find your place in the world.
                                                                                    
                                                                                    

                                                                                    Actionable advice

                                                                                    Invest time and effort in figuring out what you really are and are not.

                                                                                    Dan’s recommendations

                                                                                    Dan recommends reading Do Bigger Things. It’s fun to read and has a lot of stories that illustrate complex concepts.

                                                                                    No.1 goal for the next 12 months

                                                                                    Dan’s number one goal for the next 12 months is to create a tribe of choreographers.

                                                                                    Parting words

                                                                                     

                                                                                    “Go do bigger things, muck around in the world, and change stuff. It’s a lot of fun.”

                                                                                    Dan McClure

                                                                                     

                                                                                    [spp-transcript]

                                                                                     

                                                                                    Connect with Dan McClure

                                                                                    • Linkedin
                                                                                    • Twitter
                                                                                    • Website
                                                                                    • Book
                                                                                    
                                                                                    

                                                                                    Andrew’s books

                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                    • My Worst Investment Ever
                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                    
                                                                                    

                                                                                    Andrew’s online programs

                                                                                    • Valuation Master Class
                                                                                    • The Become a Better Investor Community
                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                    • Finance Made Ridiculously Simple
                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                    • Achieve Your Goals
                                                                                    
                                                                                    

                                                                                    Connect with Andrew Stotz:

                                                                                    • astotz.com
                                                                                    • LinkedIn
                                                                                    • Facebook
                                                                                    • Instagram
                                                                                    • Threads
                                                                                    • Twitter
                                                                                    • YouTube
                                                                                    • My Worst Investment Ever Podcast
                                                                                    
                                                                                    ]]>BIO: Dan McClure is an innovation choreographer. That’s someone whose job is to run into burning buildings, looking for opportunities to reinvent how the world works.

                                                                                    STORY: Dan took up a senior management job because his friends and family insisted he should have a ‘real’ job. However, Dan hated the job and was terrible at it.

                                                                                    LEARNING: Understand who you are and what you’re about. Be committed to following your passion and talents. Otherwise, you’ll be dragged into things that make you miserable.

                                                                                     

                                                                                    “Have the courage to say; I’m not good at that, and therefore, I’m not going to build my life around it. Instead, I’m going to embrace these other things that I am good at.”

                                                                                    Dan McClure

                                                                                     

                                                                                    Guest profile

                                                                                    Dan McClure is an innovation choreographer. That’s someone whose job is to run into burning buildings, looking for opportunities to reinvent the way the world works. He’s a thought leader in the emerging practice of ecosystem innovation and the co-author of the Fast Company Press book “Do Bigger Things – A Practical Guide to Powerful Innovation in a Changing World.” Across his 40-year career, he’s worked with firms facing the threat of obsolescence, helped business pioneers thrive in fast-changing markets, and supported activists tackling tough challenges like climate change. He’s a passionate optimist who’s excited about the future.

                                                                                    Worst investment ever

                                                                                    When Dan was in college, he was looking for something to do. He was thinking of the Peace Corps. Dan applied and was three weeks away from traveling. While doing the medical exam, the doctor told him he had an umbilical hernia, and they didn’t let any hernias into the Peace Corps. And with that, Dan was out of the Peace Corps.

                                                                                    Dan found a job at a local utility company as an engineer. It was a good job, but he wasn’t very good at it. Dan was chugging along. Then he realized if he wrote a computer program, it could do his job, and Dan wouldn’t have to do everything he was doing. So Dan started writing the computer program. Then, the federal government deregulated the entire energy industry and threw everything into turmoil. Luckily, Dan had a computer program that could save the day. He got an innovation team and started fixing and changing things.

                                                                                    Everybody around Dan kept telling him to get a real job. His innovation stuff wasn’t so cool back then. After about six or seven years, things began to calm down. There was a senior manager position in the newly created marketing department in Dan’s company. He decided to take the job. Finally, he had a real job and could settle down. With that job, Dan could move up in the company and be an executive-level person. This was a great opportunity, but Dan hated the job. And even worse than that, he was terrible at it. Dan had invested his future in this success that he had earned, and it was what everybody else said he should want and do, but it was a catastrophe.

                                                                                    Lessons learned

                                                                                    • Understand who you are and what you’re about.
                                                                                    • Be committed to following your passion and talents. Otherwise, you’ll be dragged into things that make you miserable.
                                                                                    
                                                                                    

                                                                                    Andrew’s takeaways

                                                                                    • Find your place in the world.
                                                                                    
                                                                                    

                                                                                    Actionable advice

                                                                                    Invest time and effort in figuring out what you really are and are not.

                                                                                    Dan’s recommendations

                                                                                    Dan recommends reading Do Bigger Things. It’s fun to read and has a lot of stories that illustrate complex concepts.

                                                                                    No.1 goal for the next 12 months

                                                                                    Dan’s number one goal for the next 12 months is to create a tribe of choreographers.

                                                                                    Parting words

                                                                                     

                                                                                    “Go do bigger things, muck around in the world, and change stuff. It’s a lot of fun.”

                                                                                    Dan McClure

                                                                                     

                                                                                    [spp-transcript]

                                                                                     

                                                                                    Connect with Dan McClure

                                                                                    • Linkedin
                                                                                    • Twitter
                                                                                    • Website
                                                                                    • Book
                                                                                    
                                                                                    

                                                                                    Andrew’s books

                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                    • My Worst Investment Ever
                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                    
                                                                                    

                                                                                    Andrew’s online programs

                                                                                    • Valuation Master Class
                                                                                    • The Become a Better Investor Community
                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                    • Finance Made Ridiculously Simple
                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                    • Achieve Your Goals
                                                                                    
                                                                                    

                                                                                    Connect with Andrew Stotz:

                                                                                    • astotz.com
                                                                                    • LinkedIn
                                                                                    • Facebook
                                                                                    • Instagram
                                                                                    • Threads
                                                                                    • Twitter
                                                                                    • YouTube
                                                                                    • My Worst Investment Ever Podcast
                                                                                    
                                                                                    ]]>3cb0164c-3ca7-4459-84f4-cb190ffe6c45Tue, 30 Jan 2024 06:00:00 +070042:56falsefullBryan Kramer - Be Human and Build RelationshipsBIO: Bryan Kramer is a renowned business strategist, global keynote speaker, executive trainer and coach, investor, two-time bestselling author, and Forbes contributor.

                                                                                    STORY: Bryan decided to expand his business, but the growth snowballed out of control to the point where he traveled 200 days a year and missed out on family time. Being on the road too much also saw him develop type two diabetes. Only after his 11-year-old son pointed out the horrible life he was living did Bryan decide to quit it all.

                                                                                    LEARNING: Relationships carry us through the highs, the mid-levels, and the lows. First, look at what you need today and then how you can serve others.

                                                                                     

                                                                                    “Relationships, I believe, is the thing that carries us through the highs, the mid-levels, and lows. I will never stop being a fight for relationships and being human, especially right now.”

                                                                                    Bryan Kramer

                                                                                     

                                                                                    Guest profile

                                                                                    Bryan Kramer is a renowned business strategist, global keynote speaker, executive trainer and coach, investor, two-time bestselling author, and Forbes contributor.

                                                                                    As President and co-owner of PureMatter, a Silicon Valley global marketing agency since 2001, and CEO of H2H Companies, he sparked the Human-to-Human “H2H” global movement that sets out to humanize business through simpler communication, empathy, and celebrating our imperfections.

                                                                                    His TED Talk featured a TED “first” – allowing mobile devices during the event to illustrate his belief that even a small inspirational share holds the power to change the world for the better.

                                                                                    Bryan has spoken all over the world, over 200 times at global companies including Mastercard, L‘oreal Paris, NASA, GoDaddy, Harvard University, Charles Schwab, SXSW, International Culinary Institute, Verizon, Dell, NFL, and Hawaii Lodging & Tourism, to name a few.

                                                                                    Worst investment ever

                                                                                    Bryan decided to expand his business to more than 10 people and then expanded into a 6,000-square-foot space and later to a 10,000-square-foot space. He continued to increase his employees and hired around the United States. Bryan was looking at fame and power from speaking, keynoting, creating a bigger business, more money, and more clients. It was just a never-ending process, and it got to the point where Bryan was speaking on the road. He’d written two best-selling books, given a TED talk, and was speaking on the road. Bryan was traveling for 200 days a year, eating food around the world because it was so good. But he blew up and became morbidly obese. All of a sudden, he got type two diabetes. His business growth had snowballed into something I had no control over anymore.

                                                                                    The worst part was missing out on family time. Bryan had two young kids at the time. One day, he went home, and his 11-year-old son complained about not seeing him anymore, complained about his drinking, and called him fat. This hit Bryan right in the heart. A week later, when he returned from another trip, he told his wife he wanted to reverse everything. So, he walked out of the business and consolidated everything between them over the next six months.

                                                                                    Lessons learned

                                                                                    • Relationships carry us through the highs, the mid-levels, and the lows.
                                                                                    • Look around for people you can be in a relationship with that will help you create more of what you need right now.
                                                                                    • We have to take care of ourselves first and then care for everyone else.
                                                                                    • First, consider what you need today, then how you can serve others.
                                                                                    
                                                                                    

                                                                                    Andrew’s takeaways

                                                                                    • Figure out what you need to fix and how to start fixing it today.
                                                                                    
                                                                                    

                                                                                    Actionable advice

                                                                                    Ask yourself what will this make possible when things don’t work out or when things do work out. Be okay and be present with what you have. Look at the next challenge as an opportunity.

                                                                                    Bryan’s recommendations

                                                                                    Bryan recommends subscribing to his newsletter. He writes a letter every two weeks discussing leadership, self-development, and growth. Bryan also recommends reading The Untethered Soul: The Journey Beyond Yourself. The book speaks volumes about how to stay connected and unconnected at the same time with your true self. It also teaches how to remain unattached to the things you don’t need to be attached to that aren’t serving you.

                                                                                    No.1 goal for the next 12 months

                                                                                    Bryan’s number one goal for the next 12 months is to finish his third book about trust. The book will tackle what, how, why, when, and where we trust and how to rebuild it.

                                                                                    Parting words

                                                                                     

                                                                                    “Remember that being human is now your competitive advantage. That’s what’s going to help you stand out. Andrew, thank you so much. I really appreciate you having me on the show, and I’m honored to have the alumni status.”

                                                                                    Bryan Kramer

                                                                                     

                                                                                    [spp-transcript]

                                                                                     

                                                                                    Connect with Bryan Kramer

                                                                                    • Linkedin
                                                                                    • Twitter
                                                                                    • Facebook
                                                                                    • Instagram
                                                                                    • YouTube
                                                                                    • Website
                                                                                    • Podcast
                                                                                    • Books
                                                                                    
                                                                                    

                                                                                    Andrew’s books

                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                    • My Worst Investment Ever
                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                    
                                                                                    

                                                                                    Andrew’s online programs

                                                                                    • Valuation Master Class
                                                                                    • The Become a Better Investor Community
                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                    • Finance Made Ridiculously Simple
                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                    • Achieve Your Goals
                                                                                    
                                                                                    

                                                                                    Connect with Andrew Stotz:

                                                                                    • astotz.com
                                                                                    • LinkedIn
                                                                                    • Facebook
                                                                                    • Instagram
                                                                                    • Threads
                                                                                    • Twitter
                                                                                    • YouTube
                                                                                    • My Worst Investment Ever Podcast
                                                                                    
                                                                                    ]]>BIO: Bryan Kramer is a renowned business strategist, global keynote speaker, executive trainer and coach, investor, two-time bestselling author, and Forbes contributor.

                                                                                    STORY: Bryan decided to expand his business, but the growth snowballed out of control to the point where he traveled 200 days a year and missed out on family time. Being on the road too much also saw him develop type two diabetes. Only after his 11-year-old son pointed out the horrible life he was living did Bryan decide to quit it all.

                                                                                    LEARNING: Relationships carry us through the highs, the mid-levels, and the lows. First, look at what you need today and then how you can serve others.

                                                                                     

                                                                                    “Relationships, I believe, is the thing that carries us through the highs, the mid-levels, and lows. I will never stop being a fight for relationships and being human, especially right now.”

                                                                                    Bryan Kramer

                                                                                     

                                                                                    Guest profile

                                                                                    Bryan Kramer is a renowned business strategist, global keynote speaker, executive trainer and coach, investor, two-time bestselling author, and Forbes contributor.

                                                                                    As President and co-owner of PureMatter, a Silicon Valley global marketing agency since 2001, and CEO of H2H Companies, he sparked the Human-to-Human “H2H” global movement that sets out to humanize business through simpler communication, empathy, and celebrating our imperfections.

                                                                                    His TED Talk featured a TED “first” – allowing mobile devices during the event to illustrate his belief that even a small inspirational share holds the power to change the world for the better.

                                                                                    Bryan has spoken all over the world, over 200 times at global companies including Mastercard, L‘oreal Paris, NASA, GoDaddy, Harvard University, Charles Schwab, SXSW, International Culinary Institute, Verizon, Dell, NFL, and Hawaii Lodging & Tourism, to name a few.

                                                                                    Worst investment ever

                                                                                    Bryan decided to expand his business to more than 10 people and then expanded into a 6,000-square-foot space and later to a 10,000-square-foot space. He continued to increase his employees and hired around the United States. Bryan was looking at fame and power from speaking, keynoting, creating a bigger business, more money, and more clients. It was just a never-ending process, and it got to the point where Bryan was speaking on the road. He’d written two best-selling books, given a TED talk, and was speaking on the road. Bryan was traveling for 200 days a year, eating food around the world because it was so good. But he blew up and became morbidly obese. All of a sudden, he got type two diabetes. His business growth had snowballed into something I had no control over anymore.

                                                                                    The worst part was missing out on family time. Bryan had two young kids at the time. One day, he went home, and his 11-year-old son complained about not seeing him anymore, complained about his drinking, and called him fat. This hit Bryan right in the heart. A week later, when he returned from another trip, he told his wife he wanted to reverse everything. So, he walked out of the business and consolidated everything between them over the next six months.

                                                                                    Lessons learned

                                                                                    • Relationships carry us through the highs, the mid-levels, and the lows.
                                                                                    • Look around for people you can be in a relationship with that will help you create more of what you need right now.
                                                                                    • We have to take care of ourselves first and then care for everyone else.
                                                                                    • First, consider what you need today, then how you can serve others.
                                                                                    
                                                                                    

                                                                                    Andrew’s takeaways

                                                                                    • Figure out what you need to fix and how to start fixing it today.
                                                                                    
                                                                                    

                                                                                    Actionable advice

                                                                                    Ask yourself what will this make possible when things don’t work out or when things do work out. Be okay and be present with what you have. Look at the next challenge as an opportunity.

                                                                                    Bryan’s recommendations

                                                                                    Bryan recommends subscribing to his newsletter. He writes a letter every two weeks discussing leadership, self-development, and growth. Bryan also recommends reading The Untethered Soul: The Journey Beyond Yourself. The book speaks volumes about how to stay connected and unconnected at the same time with your true self. It also teaches how to remain unattached to the things you don’t need to be attached to that aren’t serving you.

                                                                                    No.1 goal for the next 12 months

                                                                                    Bryan’s number one goal for the next 12 months is to finish his third book about trust. The book will tackle what, how, why, when, and where we trust and how to rebuild it.

                                                                                    Parting words

                                                                                     

                                                                                    “Remember that being human is now your competitive advantage. That’s what’s going to help you stand out. Andrew, thank you so much. I really appreciate you having me on the show, and I’m honored to have the alumni status.”

                                                                                    Bryan Kramer

                                                                                     

                                                                                    [spp-transcript]

                                                                                     

                                                                                    Connect with Bryan Kramer

                                                                                    • Linkedin
                                                                                    • Twitter
                                                                                    • Facebook
                                                                                    • Instagram
                                                                                    • YouTube
                                                                                    • Website
                                                                                    • Podcast
                                                                                    • Books
                                                                                    
                                                                                    

                                                                                    Andrew’s books

                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                    • My Worst Investment Ever
                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                    
                                                                                    

                                                                                    Andrew’s online programs

                                                                                    • Valuation Master Class
                                                                                    • The Become a Better Investor Community
                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                    • Finance Made Ridiculously Simple
                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                    • Achieve Your Goals
                                                                                    
                                                                                    

                                                                                    Connect with Andrew Stotz:

                                                                                    • astotz.com
                                                                                    • LinkedIn
                                                                                    • Facebook
                                                                                    • Instagram
                                                                                    • Threads
                                                                                    • Twitter
                                                                                    • YouTube
                                                                                    • My Worst Investment Ever Podcast
                                                                                    
                                                                                    ]]>28282edb-716d-494b-a160-c83915e88c97Tue, 23 Jan 2024 06:00:00 +070032:22falsefullAndrew Stotz - 8 Benefits of Increasing the Profits of Your BusinessIsn’t Capitalism Great!? Here are eight key benefits of increasing the profits of your business. And I challenge you to set the goal for 2024 to increase the profits of your business.

                                                                                    Why is increasing profit so important? Because without profit any business will eventually die. Your obligation as a founder, owner, leader, or director is to ensure that profit remains strong.

                                                                                    1. Reinvestment and Growth: Higher profits enable reinvestment in research and development, operations expansion, infrastructure improvements, and inventory, ensuring growth and long-term sustainability.
                                                                                    2. Attracting Investment: Profitable businesses demonstrate a viable business model and robust financial health, making them more attractive to investors and lenders, thus increasing financing options.
                                                                                    3. Competitive Advantage: Businesses can use increased profits to lower prices, enhance product quality, or boost marketing efforts, which helps them gain a competitive advantage.
                                                                                    4. Market Expansion: With higher profits, businesses can invest in new markets or acquire competitors, expanding their market share and solidifying their industry position.
                                                                                    5. Employee Satisfaction: Profitability allows businesses to offer employees better salaries, benefits, and growth opportunities, improving morale and job satisfaction. This helps attract and retain top talent.
                                                                                    6. Risk Reduction: Higher profits allow you to set aside reserves, which can help you better survive unexpected downturns, maintain stability, and even thrive when competitors struggle.
                                                                                    7. Social Impact: A profitable business can contribute to communities through charitable efforts, community service, or sustainable practices, positively impacting society beyond its operations.
                                                                                    8. Personal Rewards: Increased profits mean higher dividends for owners and shareholders, leading to improved lifestyles, enhanced retirement security, and greater personal investment opportunities.
                                                                                    
                                                                                    

                                                                                     

                                                                                    Andrew’s books

                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                    • My Worst Investment Ever
                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                    
                                                                                    

                                                                                    Andrew’s online programs

                                                                                    • Valuation Master Class
                                                                                    • The Become a Better Investor Community
                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                    • Finance Made Ridiculously Simple
                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                    • Achieve Your Goals
                                                                                    
                                                                                    

                                                                                    Connect with Andrew Stotz:

                                                                                    • astotz.com
                                                                                    • LinkedIn
                                                                                    • Facebook
                                                                                    • Instagram
                                                                                    • Threads
                                                                                    • Twitter
                                                                                    • YouTube
                                                                                    • My Worst Investment Ever Podcast
                                                                                    
                                                                                    

                                                                                    
                                                                                    

                                                                                    ]]>Isn’t Capitalism Great!? Here are eight key benefits of increasing the profits of your business. And I challenge you to set the goal for 2024 to increase the profits of your business.

                                                                                    Why is increasing profit so important? Because without profit any business will eventually die. Your obligation as a founder, owner, leader, or director is to ensure that profit remains strong.

                                                                                    1. Reinvestment and Growth: Higher profits enable reinvestment in research and development, operations expansion, infrastructure improvements, and inventory, ensuring growth and long-term sustainability.
                                                                                    2. Attracting Investment: Profitable businesses demonstrate a viable business model and robust financial health, making them more attractive to investors and lenders, thus increasing financing options.
                                                                                    3. Competitive Advantage: Businesses can use increased profits to lower prices, enhance product quality, or boost marketing efforts, which helps them gain a competitive advantage.
                                                                                    4. Market Expansion: With higher profits, businesses can invest in new markets or acquire competitors, expanding their market share and solidifying their industry position.
                                                                                    5. Employee Satisfaction: Profitability allows businesses to offer employees better salaries, benefits, and growth opportunities, improving morale and job satisfaction. This helps attract and retain top talent.
                                                                                    6. Risk Reduction: Higher profits allow you to set aside reserves, which can help you better survive unexpected downturns, maintain stability, and even thrive when competitors struggle.
                                                                                    7. Social Impact: A profitable business can contribute to communities through charitable efforts, community service, or sustainable practices, positively impacting society beyond its operations.
                                                                                    8. Personal Rewards: Increased profits mean higher dividends for owners and shareholders, leading to improved lifestyles, enhanced retirement security, and greater personal investment opportunities.
                                                                                    
                                                                                    

                                                                                     

                                                                                    Andrew’s books

                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                    • My Worst Investment Ever
                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                    
                                                                                    

                                                                                    Andrew’s online programs

                                                                                    • Valuation Master Class
                                                                                    • The Become a Better Investor Community
                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                    • Finance Made Ridiculously Simple
                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                    • Achieve Your Goals
                                                                                    
                                                                                    

                                                                                    Connect with Andrew Stotz:

                                                                                    • astotz.com
                                                                                    • LinkedIn
                                                                                    • Facebook
                                                                                    • Instagram
                                                                                    • Threads
                                                                                    • Twitter
                                                                                    • YouTube
                                                                                    • My Worst Investment Ever Podcast
                                                                                    
                                                                                    

                                                                                    
                                                                                    

                                                                                    ]]>49427cfd-57e4-4d34-bb6c-a05af5caf143Thu, 18 Jan 2024 06:00:00 +070002:30falsefullNathaniel Harding - One Risk at a TimeBIO: A born and bred Oklahoman, Nathaniel Harding is an innovator and market maker who has founded, scaled, and sold companies. He is a successful investor in energy, biotech, and ag tech.

                                                                                    STORY: Nathaniel’s company decided to deploy new technology to explore oil and gas fields. The venture was cash-intensive and an absolute commercial zero.

                                                                                    LEARNING: Categorize risks. Limit your investments to one risk. Do one risk at a time and do it sequentially.

                                                                                     

                                                                                    “There is such a thing as too many firsts. When you stack that house of cards up high enough, it’s going to fall.”

                                                                                     Nathaniel Harding

                                                                                     

                                                                                    Guest profile

                                                                                    A born and bred Oklahoman, Nathaniel Harding is an innovator and market maker who has founded, scaled, and sold companies. He is a successful investor in energy, biotech, and ag tech. Nathaniel was named a Young Global Leader by the World Economic Forum and a Most Admired CEO in Oklahoma by the Journal Record.

                                                                                    Worst investment ever

                                                                                    About 10 years ago, Nathaniel’s company evaluated new oil and gas fields that they believed were underdeveloped or underdeveloped. The company developed competence in using analytical methods using high science to assess potential areas. Then, it deployed the infrastructure and equipment personnel to prove and develop it. The company would do that and increase production throughout a new area and then sell it to a bigger, more established oil and gas company.

                                                                                    After much success with that model, the company decided to do it again. They believed they had the Midas touch. They were now working with some very well-established and accomplished geologists and geoscientists. This time, they took the model outside of their home state of Oklahoma to Michigan. In this new location, they went the extra mile. They introduced a new technology that no other company had used before. This was cash-intensive, and they had to find an investor. They needed upfront capital to lease the acreage and go through the many regulatory steps to have the right to operate in a new environment. Unfortunately, the project was an absolute commercial zero.

                                                                                    Lessons learned

                                                                                    • Categorize risks.
                                                                                    • Limit your investments to one risk.
                                                                                    • Do one risk at a time and do it sequentially.
                                                                                    
                                                                                    

                                                                                    Andrew’s takeaways

                                                                                    • Isolate your risks.
                                                                                    
                                                                                    

                                                                                    Actionable advice

                                                                                    If embarking on something with many firsts or new experiences, partner with someone who knows that territory. Also, make your first 10 customers wildly happy, which will help with execution and scale risk.

                                                                                    Nathaniel’s recommendations

                                                                                    Nathaniel recommends traveling often to get yourself out of the daily grind so you can think more aspirationally and creatively.

                                                                                    No.1 goal for the next 12 months

                                                                                    Nathaniel’s number one goal for the next 12 months is to be a top decile fund.

                                                                                    Parting words

                                                                                     

                                                                                    “Never stop learning, never stop growing. You learn more from failure.”

                                                                                    Nathaniel Harding

                                                                                     

                                                                                    Connect with Nathaniel Harding

                                                                                    • Linkedin
                                                                                    • Twitter
                                                                                    • Instagram
                                                                                    • Website
                                                                                    • Podcast
                                                                                    
                                                                                    

                                                                                     

                                                                                    [spp-transcript]

                                                                                     

                                                                                    Connect with Nathaniel Harding

                                                                                    • Linkedin
                                                                                    • Twitter
                                                                                    • Instagram
                                                                                    • Website
                                                                                    • Podcast
                                                                                    
                                                                                    

                                                                                    Andrew’s books

                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                    • My Worst Investment Ever
                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                    
                                                                                    

                                                                                    Andrew’s online programs

                                                                                    • Valuation Master Class
                                                                                    • The Become a Better Investor Community
                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                    • Finance Made Ridiculously Simple
                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                    • Achieve Your Goals
                                                                                    
                                                                                    

                                                                                    Connect with Andrew Stotz:

                                                                                    • astotz.com
                                                                                    • LinkedIn
                                                                                    • Facebook
                                                                                    • Instagram
                                                                                    • Threads
                                                                                    • Twitter
                                                                                    • YouTube
                                                                                    • My Worst Investment Ever Podcast
                                                                                    
                                                                                    ]]>BIO: A born and bred Oklahoman, Nathaniel Harding is an innovator and market maker who has founded, scaled, and sold companies. He is a successful investor in energy, biotech, and ag tech.

                                                                                    STORY: Nathaniel’s company decided to deploy new technology to explore oil and gas fields. The venture was cash-intensive and an absolute commercial zero.

                                                                                    LEARNING: Categorize risks. Limit your investments to one risk. Do one risk at a time and do it sequentially.

                                                                                     

                                                                                    “There is such a thing as too many firsts. When you stack that house of cards up high enough, it’s going to fall.”

                                                                                     Nathaniel Harding

                                                                                     

                                                                                    Guest profile

                                                                                    A born and bred Oklahoman, Nathaniel Harding is an innovator and market maker who has founded, scaled, and sold companies. He is a successful investor in energy, biotech, and ag tech. Nathaniel was named a Young Global Leader by the World Economic Forum and a Most Admired CEO in Oklahoma by the Journal Record.

                                                                                    Worst investment ever

                                                                                    About 10 years ago, Nathaniel’s company evaluated new oil and gas fields that they believed were underdeveloped or underdeveloped. The company developed competence in using analytical methods using high science to assess potential areas. Then, it deployed the infrastructure and equipment personnel to prove and develop it. The company would do that and increase production throughout a new area and then sell it to a bigger, more established oil and gas company.

                                                                                    After much success with that model, the company decided to do it again. They believed they had the Midas touch. They were now working with some very well-established and accomplished geologists and geoscientists. This time, they took the model outside of their home state of Oklahoma to Michigan. In this new location, they went the extra mile. They introduced a new technology that no other company had used before. This was cash-intensive, and they had to find an investor. They needed upfront capital to lease the acreage and go through the many regulatory steps to have the right to operate in a new environment. Unfortunately, the project was an absolute commercial zero.

                                                                                    Lessons learned

                                                                                    • Categorize risks.
                                                                                    • Limit your investments to one risk.
                                                                                    • Do one risk at a time and do it sequentially.
                                                                                    
                                                                                    

                                                                                    Andrew’s takeaways

                                                                                    • Isolate your risks.
                                                                                    
                                                                                    

                                                                                    Actionable advice

                                                                                    If embarking on something with many firsts or new experiences, partner with someone who knows that territory. Also, make your first 10 customers wildly happy, which will help with execution and scale risk.

                                                                                    Nathaniel’s recommendations

                                                                                    Nathaniel recommends traveling often to get yourself out of the daily grind so you can think more aspirationally and creatively.

                                                                                    No.1 goal for the next 12 months

                                                                                    Nathaniel’s number one goal for the next 12 months is to be a top decile fund.

                                                                                    Parting words

                                                                                     

                                                                                    “Never stop learning, never stop growing. You learn more from failure.”

                                                                                    Nathaniel Harding

                                                                                     

                                                                                    Connect with Nathaniel Harding

                                                                                    • Linkedin
                                                                                    • Twitter
                                                                                    • Instagram
                                                                                    • Website
                                                                                    • Podcast
                                                                                    
                                                                                    

                                                                                     

                                                                                    [spp-transcript]

                                                                                     

                                                                                    Connect with Nathaniel Harding

                                                                                    • Linkedin
                                                                                    • Twitter
                                                                                    • Instagram
                                                                                    • Website
                                                                                    • Podcast
                                                                                    
                                                                                    

                                                                                    Andrew’s books

                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                    • My Worst Investment Ever
                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                    
                                                                                    

                                                                                    Andrew’s online programs

                                                                                    • Valuation Master Class
                                                                                    • The Become a Better Investor Community
                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                    • Finance Made Ridiculously Simple
                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                    • Achieve Your Goals
                                                                                    
                                                                                    

                                                                                    Connect with Andrew Stotz:

                                                                                    • astotz.com
                                                                                    • LinkedIn
                                                                                    • Facebook
                                                                                    • Instagram
                                                                                    • Threads
                                                                                    • Twitter
                                                                                    • YouTube
                                                                                    • My Worst Investment Ever Podcast
                                                                                    
                                                                                    ]]>bf83078c-f4bf-46be-afc0-7c74c42c6727Tue, 16 Jan 2024 06:00:00 +070028:35falsefullWill Roundtree - Get a Customer FirstBIO: Will Roundtree offers the world a unique lens into wealth-building strategies and examines opportunities for his communities to expound on their knowledge and have effective practices to apply it.

                                                                                    STORY: Will invested in a small tax franchise after he bought into the owner’s lavish lifestyle. He didn’t do his due diligence, only to discover that the owner had been stealing from his clients. This saw him lose over $40,000.

                                                                                    LEARNING: Do your due diligence. Study the actual industry you want to invest in and verify its legitimacy. There’s no hack or shortcut to earning trust.

                                                                                     

                                                                                    “People want to look like they’re running a business. So they go and get all these business expenses. I’d say the number one thing you should do is get a customer first.”

                                                                                    Will Roundtree

                                                                                     

                                                                                    Guest profile

                                                                                    Will Roundtree offers the world a unique lens into wealth-building strategies and examines opportunities for his communities to expound on their knowledge and have effective practices to apply it.

                                                                                    From homeless to millionaire, Will has established himself as a staple in the real estate investment sector. His expertise has garnered recognition among his peers and community members as the founder and top-grossing principal at WE Management Services. Will has helped over 3,500 small to medium-sized businesses access over 300 million dollars in business funding over the 36 months.

                                                                                    In 2005, he left his hometown of Milwaukee, WI, with a borrowed 500 dollars and headed towards Las Vegas. Once there, Roundtree found the ruthless realities of living without a financial plan and imperfect credit. His applications were denied for housing, and this left him homeless and living out of his car.

                                                                                    Roundtree was inspired to diligently educate himself on personal finance and credit. He would walk into libraries and read books about consumer credit laws, standard operating procedures, regulations, and economics. This led to him becoming a FICO Certified Consultant and eventually to the creation of WE Management Services, a highly-rated financial services company. In this role, Roundtree has helped numerous families successfully restore credit, become homeowners, obtain financial freedom, and become flourishing business owners. More than a decade later, Roundtree tours the country as a notable financial advisor, author, motivational speaker, mentor, community organizer, real estate investor, and wealth builder. Just recently, he completed a nationwide tour headlining his innovative Cocktails and Credit seminars. He is also the creator and host of the Full Time CEO Podcast: The $h!t They Don’t Tell You!

                                                                                    Worst investment ever

                                                                                    Will invested in a small tax franchise when they were up and coming. The owner of the franchise pitched Will by showing him how much money he had made the year before. Will didn’t ask to see any financials or verify if the company was legit. He was impressed by the profit and loss statement and pictures of the guy’s automobiles and the trips he took. So he sold Will on the lifestyle, not necessarily the business.

                                                                                    After liquidating his 401-K, Will also took out some personal loans to invest in the tax franchise. His total investment into the franchise was about $40,000 upfront, plus additional yearly fees. After the purchase was completed, Will had to lease an office. He negotiated for a tenant improvement allowance of about $25,000. For the landlord to renovate the building, Will had to go from a three to a six-year lease. Now, he had a 3,000-square-foot office for six years. Next, he went out and hired over 35 tax preparers.

                                                                                    When the tax season started, Will believed he would have over 500 clients coming in, but that wasn’t the case. At the time, he had partnered with a bank to make tax payouts, and close to the end of the tax season, the bank just shut him off. He got a letter saying the bank was auditing all of his financials. Turns out the parent tax company had been stealing clients’ money. The owner would stuff a bunch of fake expenses into a client’s tax refund, help them get a large refund, and then charge the client $1,500 in software costs. This money would be deposited into the company’s bank account, and that’s why the bank was now auditing Will’s accounts.

                                                                                    Will had to take the franchise owner to court, leading to a long, expensive legal battle that lasted years.

                                                                                    Lessons learned

                                                                                    • When you do something solely for money, you overlook all the other outpoints it takes to make money.
                                                                                    • Do your due diligence.
                                                                                    • Study the actual industry you want to invest in and verify its legitimacy.
                                                                                    
                                                                                    

                                                                                    Andrew’s takeaways

                                                                                    • There’s no hack or shortcut to earning trust.
                                                                                    • Be super careful when you go into any business with no experience and no client base on which you can build a revenue stream.
                                                                                    
                                                                                    

                                                                                    Actionable advice

                                                                                    Get experience in the space you want to start a business to see if you’ll like it. Go work for someone in that industry. Before jumping in, this will help you determine if you like that business model and the industry.

                                                                                    Will’s recommendations

                                                                                    Will has over 300 videos on YouTube that you can watch. You can also follow him across all social media platforms: LinkedIn, Twitter, Facebook, and Instagram. Will is also a two-time author of Credit is King, one of the fastest and most-sold books in the credit industry. And Full Time CEO, which teaches the unglamorous side of entrepreneurship.

                                                                                    No.1 goal for the next 12 months

                                                                                    Will’s number one goal for the next 12 months is to license his information. He also wants to help over 1,000 people get their first investment property and increase their net worth in their assets.

                                                                                    Parting words

                                                                                     

                                                                                    “It’s been a pleasure, Andrew. Thank you for this platform. Hopefully, one day, I’ll come back not necessarily with a worse story, but just an update on the success we’re helping others with.”

                                                                                    Will Roundtree

                                                                                     

                                                                                    [spp-transcript]

                                                                                     

                                                                                    Connect with Will Roundtree

                                                                                    • Linkedin
                                                                                    • Twitter
                                                                                    • Facebook
                                                                                    • Instagram
                                                                                    • Website
                                                                                    • Podcast
                                                                                    
                                                                                    

                                                                                    Andrew’s books

                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                    • My Worst Investment Ever
                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                    
                                                                                    

                                                                                    Andrew’s online programs

                                                                                    • Valuation Master Class
                                                                                    • The Become a Better Investor Community
                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                    • Finance Made Ridiculously Simple
                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                    • BIO: Will Roundtree offers the world a unique lens into wealth-building strategies and examines opportunities for his communities to expound on their knowledge and have effective practices to apply it.

                                                                                      STORY: Will invested in a small tax franchise after he bought into the owner’s lavish lifestyle. He didn’t do his due diligence, only to discover that the owner had been stealing from his clients. This saw him lose over $40,000.

                                                                                      LEARNING: Do your due diligence. Study the actual industry you want to invest in and verify its legitimacy. There’s no hack or shortcut to earning trust.

                                                                                       

                                                                                      “People want to look like they’re running a business. So they go and get all these business expenses. I’d say the number one thing you should do is get a customer first.”

                                                                                      Will Roundtree

                                                                                       

                                                                                      Guest profile

                                                                                      Will Roundtree offers the world a unique lens into wealth-building strategies and examines opportunities for his communities to expound on their knowledge and have effective practices to apply it.

                                                                                      From homeless to millionaire, Will has established himself as a staple in the real estate investment sector. His expertise has garnered recognition among his peers and community members as the founder and top-grossing principal at WE Management Services. Will has helped over 3,500 small to medium-sized businesses access over 300 million dollars in business funding over the 36 months.

                                                                                      In 2005, he left his hometown of Milwaukee, WI, with a borrowed 500 dollars and headed towards Las Vegas. Once there, Roundtree found the ruthless realities of living without a financial plan and imperfect credit. His applications were denied for housing, and this left him homeless and living out of his car.

                                                                                      Roundtree was inspired to diligently educate himself on personal finance and credit. He would walk into libraries and read books about consumer credit laws, standard operating procedures, regulations, and economics. This led to him becoming a FICO Certified Consultant and eventually to the creation of WE Management Services, a highly-rated financial services company. In this role, Roundtree has helped numerous families successfully restore credit, become homeowners, obtain financial freedom, and become flourishing business owners. More than a decade later, Roundtree tours the country as a notable financial advisor, author, motivational speaker, mentor, community organizer, real estate investor, and wealth builder. Just recently, he completed a nationwide tour headlining his innovative Cocktails and Credit seminars. He is also the creator and host of the Full Time CEO Podcast: The $h!t They Don’t Tell You!

                                                                                      Worst investment ever

                                                                                      Will invested in a small tax franchise when they were up and coming. The owner of the franchise pitched Will by showing him how much money he had made the year before. Will didn’t ask to see any financials or verify if the company was legit. He was impressed by the profit and loss statement and pictures of the guy’s automobiles and the trips he took. So he sold Will on the lifestyle, not necessarily the business.

                                                                                      After liquidating his 401-K, Will also took out some personal loans to invest in the tax franchise. His total investment into the franchise was about $40,000 upfront, plus additional yearly fees. After the purchase was completed, Will had to lease an office. He negotiated for a tenant improvement allowance of about $25,000. For the landlord to renovate the building, Will had to go from a three to a six-year lease. Now, he had a 3,000-square-foot office for six years. Next, he went out and hired over 35 tax preparers.

                                                                                      When the tax season started, Will believed he would have over 500 clients coming in, but that wasn’t the case. At the time, he had partnered with a bank to make tax payouts, and close to the end of the tax season, the bank just shut him off. He got a letter saying the bank was auditing all of his financials. Turns out the parent tax company had been stealing clients’ money. The owner would stuff a bunch of fake expenses into a client’s tax refund, help them get a large refund, and then charge the client $1,500 in software costs. This money would be deposited into the company’s bank account, and that’s why the bank was now auditing Will’s accounts.

                                                                                      Will had to take the franchise owner to court, leading to a long, expensive legal battle that lasted years.

                                                                                      Lessons learned

                                                                                      • When you do something solely for money, you overlook all the other outpoints it takes to make money.
                                                                                      • Do your due diligence.
                                                                                      • Study the actual industry you want to invest in and verify its legitimacy.
                                                                                      
                                                                                      

                                                                                      Andrew’s takeaways

                                                                                      • There’s no hack or shortcut to earning trust.
                                                                                      • Be super careful when you go into any business with no experience and no client base on which you can build a revenue stream.
                                                                                      
                                                                                      

                                                                                      Actionable advice

                                                                                      Get experience in the space you want to start a business to see if you’ll like it. Go work for someone in that industry. Before jumping in, this will help you determine if you like that business model and the industry.

                                                                                      Will’s recommendations

                                                                                      Will has over 300 videos on YouTube that you can watch. You can also follow him across all social media platforms: LinkedIn, Twitter, Facebook, and Instagram. Will is also a two-time author of Credit is King, one of the fastest and most-sold books in the credit industry. And Full Time CEO, which teaches the unglamorous side of entrepreneurship.

                                                                                      No.1 goal for the next 12 months

                                                                                      Will’s number one goal for the next 12 months is to license his information. He also wants to help over 1,000 people get their first investment property and increase their net worth in their assets.

                                                                                      Parting words

                                                                                       

                                                                                      “It’s been a pleasure, Andrew. Thank you for this platform. Hopefully, one day, I’ll come back not necessarily with a worse story, but just an update on the success we’re helping others with.”

                                                                                      Will Roundtree

                                                                                       

                                                                                      [spp-transcript]

                                                                                       

                                                                                      Connect with Will Roundtree

                                                                                      • Linkedin
                                                                                      • Twitter
                                                                                      • Facebook
                                                                                      • Instagram
                                                                                      • Website
                                                                                      • Podcast
                                                                                      
                                                                                      

                                                                                      Andrew’s books

                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                      • My Worst Investment Ever
                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                      
                                                                                      

                                                                                      Andrew’s online programs

                                                                                      • Valuation Master Class
                                                                                      • The Become a Better Investor Community
                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                      • Finance Made Ridiculously Simple
                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                      • Achieve Your Goals
                                                                                      
                                                                                      

                                                                                      Connect with Andrew Stotz:

                                                                                      • astotz.com
                                                                                      • LinkedIn
                                                                                      • Facebook
                                                                                      • Instagram
                                                                                      • Threads
                                                                                      • Twitter
                                                                                      • YouTube
                                                                                      • My Worst Investment Ever Podcast
                                                                                      
                                                                                      ]]>db2af7b7-fd92-4f53-acc0-fba3b65c7ab9Thu, 11 Jan 2024 06:00:00 +070044:05falsefullKyle Mowery - Invest in Your Circle of CompetenceBIO: Kyle Mowery, founder and portfolio manager at GrizzlyRock Capital, has an 18-year career beginning at PAAMCO, where he honed his analytical skills. He later delved into high-yield corporate securities at T.H. Lee Senior Credit Strategies and expanded his expertise at BMO Capital Markets.

                                                                                      STORY: Kyle invested in a business that produced sandalwood trees. He believed they were about to sell at significantly higher prices to buyers across the globe. Unfortunately, some of the sales fell through, management resigned and didn’t report when they sold their shares, and then the whole thing imploded.

                                                                                      LEARNING: Invest in your circle of competence. Make sure the bet size is correct.

                                                                                       

                                                                                      “In inflection investing, see the inflection. You’ll pay a higher price, but you’ll have a greater certainty.”

                                                                                      Kyle Mowery

                                                                                       

                                                                                      Guest profile

                                                                                      Kyle Mowery, founder and portfolio manager at GrizzlyRock Capital, has an 18-year career beginning at PAAMCO, where he honed his analytical skills. He later delved into high-yield corporate securities at T.H. Lee Senior Credit Strategies and expanded his expertise at BMO Capital Markets. In 2012, he established GrizzlyRock, adopting a fundamental, value-oriented research approach in small-cap companies. Kyle’s method involves rigorous research, systematically identifying mispriced securities with high risk/reward potential. With unwavering discipline, he navigates market complexities, focusing on high-conviction investments amidst information overload. His adeptness in spotting substantial mispricing opportunities sets him apart in the crowded investment landscape.

                                                                                      Worst investment ever

                                                                                      Kyle wanted to grow his business in 2016, so he hired an additional analyst with a background in small-cap, Asian developed markets, and Asian equities. Kyle had also been following a business that produced sandalwood trees at the time. He researched the business and ultimately purchased shares, believing the company was on the cusp of significant free cash flow. The company was levered financially, and Kyle was well aware of that. Kyle invested based on the imminent free cash flow. His company would harvest this wonderful group of trees. Kyle put his team on the ground in Australia. They saw the trees, they were all very real.

                                                                                      Kyle was also impressed that a founding family owned between 20 and 25% of the business. He did his full diligence and believed they were about to sell at significantly higher prices to buyers across the globe.

                                                                                      Unfortunately, some of the sales fell through, management resigned and didn’t report when they sold their shares, and then the whole thing imploded. Kyle luckily sold before it hit zero, but it was a very nasty loss.

                                                                                      Lessons learned

                                                                                      • Invest in your circle of competence.
                                                                                      • Make sure the bet size is correct.
                                                                                      
                                                                                      

                                                                                      Andrew’s takeaways

                                                                                      • Making great investments can be very emotional, especially if you’re starting up or a small to mid-cap company.
                                                                                      
                                                                                      

                                                                                      Actionable advice

                                                                                      Practice intellectual honesty. The minute things don’t align with what you had underwritten, reassess. It’s okay that your original thesis was invalidated; just be intellectually honest.

                                                                                      Kyle’s recommendations

                                                                                      Kyle recommends reading Margin of Safety to understand risk versus return.

                                                                                      No.1 goal for the next 12 months

                                                                                      Kyle’s number one goal for the next 12 months is to build a portfolio that can manage political uncertainty and perform or not drawdown very far across a broad spectrum of economic outcomes.

                                                                                      Parting words

                                                                                       

                                                                                      “Investing is a wonderful passion for many of us, and it’s a wonderful lifelong journey. You get some wrong and some right. The key is to just keep on size and keep it compounding.”

                                                                                      Kyle Mowery

                                                                                       

                                                                                      [spp-transcript]

                                                                                       

                                                                                      Connect with Kyle Mowery

                                                                                      • Linkedin
                                                                                      • Website
                                                                                      • Podcast
                                                                                      
                                                                                      

                                                                                      Andrew’s books

                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                      • My Worst Investment Ever
                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                      
                                                                                      

                                                                                      Andrew’s online programs

                                                                                      • Valuation Master Class
                                                                                      • The Become a Better Investor Community
                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                      • Finance Made Ridiculously Simple
                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                      • Achieve Your Goals
                                                                                      
                                                                                      

                                                                                      Connect with Andrew Stotz:

                                                                                      • astotz.com
                                                                                      • LinkedIn
                                                                                      • Facebook
                                                                                      • Instagram
                                                                                      • Threads
                                                                                      • Twitter
                                                                                      • YouTube
                                                                                      • My Worst Investment Ever Podcast
                                                                                      
                                                                                      ]]>BIO: Kyle Mowery, founder and portfolio manager at GrizzlyRock Capital, has an 18-year career beginning at PAAMCO, where he honed his analytical skills. He later delved into high-yield corporate securities at T.H. Lee Senior Credit Strategies and expanded his expertise at BMO Capital Markets.

                                                                                      STORY: Kyle invested in a business that produced sandalwood trees. He believed they were about to sell at significantly higher prices to buyers across the globe. Unfortunately, some of the sales fell through, management resigned and didn’t report when they sold their shares, and then the whole thing imploded.

                                                                                      LEARNING: Invest in your circle of competence. Make sure the bet size is correct.

                                                                                       

                                                                                      “In inflection investing, see the inflection. You’ll pay a higher price, but you’ll have a greater certainty.”

                                                                                      Kyle Mowery

                                                                                       

                                                                                      Guest profile

                                                                                      Kyle Mowery, founder and portfolio manager at GrizzlyRock Capital, has an 18-year career beginning at PAAMCO, where he honed his analytical skills. He later delved into high-yield corporate securities at T.H. Lee Senior Credit Strategies and expanded his expertise at BMO Capital Markets. In 2012, he established GrizzlyRock, adopting a fundamental, value-oriented research approach in small-cap companies. Kyle’s method involves rigorous research, systematically identifying mispriced securities with high risk/reward potential. With unwavering discipline, he navigates market complexities, focusing on high-conviction investments amidst information overload. His adeptness in spotting substantial mispricing opportunities sets him apart in the crowded investment landscape.

                                                                                      Worst investment ever

                                                                                      Kyle wanted to grow his business in 2016, so he hired an additional analyst with a background in small-cap, Asian developed markets, and Asian equities. Kyle had also been following a business that produced sandalwood trees at the time. He researched the business and ultimately purchased shares, believing the company was on the cusp of significant free cash flow. The company was levered financially, and Kyle was well aware of that. Kyle invested based on the imminent free cash flow. His company would harvest this wonderful group of trees. Kyle put his team on the ground in Australia. They saw the trees, they were all very real.

                                                                                      Kyle was also impressed that a founding family owned between 20 and 25% of the business. He did his full diligence and believed they were about to sell at significantly higher prices to buyers across the globe.

                                                                                      Unfortunately, some of the sales fell through, management resigned and didn’t report when they sold their shares, and then the whole thing imploded. Kyle luckily sold before it hit zero, but it was a very nasty loss.

                                                                                      Lessons learned

                                                                                      • Invest in your circle of competence.
                                                                                      • Make sure the bet size is correct.
                                                                                      
                                                                                      

                                                                                      Andrew’s takeaways

                                                                                      • Making great investments can be very emotional, especially if you’re starting up or a small to mid-cap company.
                                                                                      
                                                                                      

                                                                                      Actionable advice

                                                                                      Practice intellectual honesty. The minute things don’t align with what you had underwritten, reassess. It’s okay that your original thesis was invalidated; just be intellectually honest.

                                                                                      Kyle’s recommendations

                                                                                      Kyle recommends reading Margin of Safety to understand risk versus return.

                                                                                      No.1 goal for the next 12 months

                                                                                      Kyle’s number one goal for the next 12 months is to build a portfolio that can manage political uncertainty and perform or not drawdown very far across a broad spectrum of economic outcomes.

                                                                                      Parting words

                                                                                       

                                                                                      “Investing is a wonderful passion for many of us, and it’s a wonderful lifelong journey. You get some wrong and some right. The key is to just keep on size and keep it compounding.”

                                                                                      Kyle Mowery

                                                                                       

                                                                                      [spp-transcript]

                                                                                       

                                                                                      Connect with Kyle Mowery

                                                                                      • Linkedin
                                                                                      • Website
                                                                                      • Podcast
                                                                                      
                                                                                      

                                                                                      Andrew’s books

                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                      • My Worst Investment Ever
                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                      
                                                                                      

                                                                                      Andrew’s online programs

                                                                                      • Valuation Master Class
                                                                                      • The Become a Better Investor Community
                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                      • Finance Made Ridiculously Simple
                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                      • Achieve Your Goals
                                                                                      
                                                                                      

                                                                                      Connect with Andrew Stotz:

                                                                                      • astotz.com
                                                                                      • LinkedIn
                                                                                      • Facebook
                                                                                      • Instagram
                                                                                      • Threads
                                                                                      • Twitter
                                                                                      • YouTube
                                                                                      • My Worst Investment Ever Podcast
                                                                                      
                                                                                      ]]>27061e24-95b8-4415-b66a-fc8516070337Tue, 09 Jan 2024 06:00:00 +070032:56falsefullGabe Marusca – Pay Extreme Attention to Your BodyBIO: Gabe Marusca, known as The Nomad Solopreneur, is a location-independent marketing strategist who established Digital Finest as a solo founder.

                                                                                      STORY: Gabe spent 20 hours working daily for over a year trying to make as much money as soon as he could. This caused his body to shut down, and he developed a chronic disease.

                                                                                      LEARNING: Pay extreme attention to your body. Having a long-term vision and patience is more sustainable than trying to gain fortune overnight. Stop putting too much time into the things that don’t matter.

                                                                                       

                                                                                      “When your calendar is full and you don’t have time for yourself, you become frustrated and feel unfulfilled. Then everyone will suffer, starting with you.”

                                                                                      Gabe Marusca

                                                                                       

                                                                                      Guest profile

                                                                                      Gabe Marusca, known as The Nomad Solopreneur, is a location-independent marketing strategist who established Digital Finest as a solo founder. When he’s not helping solopreneurs get more leads from their websites, you can find him swimming in the ocean, hiking through tropical forests, or interviewing remote solopreneurs around their business model on The Nomad Solopreneur Show. In his spare time, he writes a weekly newsletter with the same name that follows his mission to help 10,000 aspiring solopreneurs build location-free one-person businesses.

                                                                                      Gabe offers an exclusive Free Landing Page Review for My Worst Investment Ever listeners.

                                                                                      Worst investment ever

                                                                                      For almost a year, Gabe slept only four hours a day in a bid to make enough money to make ends meet. He’d often find himself working in poor conditions. At one point, he was working with one of his legs in a bucket of ice because he’d had a minor football accident and couldn’t take a day off to recover.

                                                                                      At the time, Gabe had a side hustle and a full-time job. He’d wake up every day at 3 am, work on his side hustle until 6 or 7 am, then commute to his full-time job and stay there for eight hours. Gabe would then go back home, study for one hour, and start working again on his business. He was eating at his work desk, not exercising, and had no social life. This caused his body to act out, but Gabe ignored it and kept on hustling. Gabe believed he was healthy and had the energy to keep going. All that overworking made him feel worse, and he developed a chronic illness.

                                                                                      Lessons learned

                                                                                      • Pay extreme attention to your body.
                                                                                      • Having a long-term vision and patience is more sustainable than trying to gain fortune overnight.
                                                                                      • Stop putting too much time into the things that don’t matter.
                                                                                      
                                                                                      

                                                                                      Andrew’s takeaways

                                                                                      • Sleep is critical, so don’t try to take from sleep to be productive.
                                                                                      • Eat good food.
                                                                                      • Exercise daily.
                                                                                      
                                                                                      

                                                                                      Actionable advice

                                                                                      When planning your calendar for the next week or the next day, put that activity that fills you with energy and joy first. Block your most active hours with essential things, and all the others will start to add on.

                                                                                      Gabe’s recommendation

                                                                                      Habe recommends reading the book When the Body Says No. It will change the way you act and how you take care of yourself.

                                                                                      No.1 goal for the next 12 months

                                                                                      Gabe’s number one goal for the next 12 months is to reach 10,000 aspiring solopreneurs through the Nomad Solopreneurs show and newsletter and help them build successful one-person businesses without feeling overwhelmed and unfulfilled.

                                                                                      Parting words

                                                                                       

                                                                                      “Tell me how you spend your time, and I’ll tell you how successful you are.”

                                                                                      Gabe Marusca

                                                                                       

                                                                                      [spp-transcript]

                                                                                       

                                                                                      Connect with Gabe Marusca

                                                                                      • LinkedIn
                                                                                      • Twitter
                                                                                      • Instagram
                                                                                      • Website
                                                                                      • Podcast
                                                                                      
                                                                                      

                                                                                      Andrew’s books

                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                      • My Worst Investment Ever
                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                      
                                                                                      

                                                                                      Andrew’s online programs

                                                                                      • Valuation Master Class
                                                                                      • The Become a Better Investor Community
                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                      • Finance Made Ridiculously Simple
                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                      • Achieve Your Goals
                                                                                      
                                                                                      

                                                                                      Connect with Andrew Stotz:

                                                                                      • astotz.com
                                                                                      • LinkedIn
                                                                                      • Facebook
                                                                                      • Instagram
                                                                                      • Threads
                                                                                      • Twitter
                                                                                      • YouTube
                                                                                      • My Worst Investment Ever Podcast
                                                                                      
                                                                                      ]]>BIO: Gabe Marusca, known as The Nomad Solopreneur, is a location-independent marketing strategist who established Digital Finest as a solo founder.

                                                                                      STORY: Gabe spent 20 hours working daily for over a year trying to make as much money as soon as he could. This caused his body to shut down, and he developed a chronic disease.

                                                                                      LEARNING: Pay extreme attention to your body. Having a long-term vision and patience is more sustainable than trying to gain fortune overnight. Stop putting too much time into the things that don’t matter.

                                                                                       

                                                                                      “When your calendar is full and you don’t have time for yourself, you become frustrated and feel unfulfilled. Then everyone will suffer, starting with you.”

                                                                                      Gabe Marusca

                                                                                       

                                                                                      Guest profile

                                                                                      Gabe Marusca, known as The Nomad Solopreneur, is a location-independent marketing strategist who established Digital Finest as a solo founder. When he’s not helping solopreneurs get more leads from their websites, you can find him swimming in the ocean, hiking through tropical forests, or interviewing remote solopreneurs around their business model on The Nomad Solopreneur Show. In his spare time, he writes a weekly newsletter with the same name that follows his mission to help 10,000 aspiring solopreneurs build location-free one-person businesses.

                                                                                      Gabe offers an exclusive Free Landing Page Review for My Worst Investment Ever listeners.

                                                                                      Worst investment ever

                                                                                      For almost a year, Gabe slept only four hours a day in a bid to make enough money to make ends meet. He’d often find himself working in poor conditions. At one point, he was working with one of his legs in a bucket of ice because he’d had a minor football accident and couldn’t take a day off to recover.

                                                                                      At the time, Gabe had a side hustle and a full-time job. He’d wake up every day at 3 am, work on his side hustle until 6 or 7 am, then commute to his full-time job and stay there for eight hours. Gabe would then go back home, study for one hour, and start working again on his business. He was eating at his work desk, not exercising, and had no social life. This caused his body to act out, but Gabe ignored it and kept on hustling. Gabe believed he was healthy and had the energy to keep going. All that overworking made him feel worse, and he developed a chronic illness.

                                                                                      Lessons learned

                                                                                      • Pay extreme attention to your body.
                                                                                      • Having a long-term vision and patience is more sustainable than trying to gain fortune overnight.
                                                                                      • Stop putting too much time into the things that don’t matter.
                                                                                      
                                                                                      

                                                                                      Andrew’s takeaways

                                                                                      • Sleep is critical, so don’t try to take from sleep to be productive.
                                                                                      • Eat good food.
                                                                                      • Exercise daily.
                                                                                      
                                                                                      

                                                                                      Actionable advice

                                                                                      When planning your calendar for the next week or the next day, put that activity that fills you with energy and joy first. Block your most active hours with essential things, and all the others will start to add on.

                                                                                      Gabe’s recommendation

                                                                                      Habe recommends reading the book When the Body Says No. It will change the way you act and how you take care of yourself.

                                                                                      No.1 goal for the next 12 months

                                                                                      Gabe’s number one goal for the next 12 months is to reach 10,000 aspiring solopreneurs through the Nomad Solopreneurs show and newsletter and help them build successful one-person businesses without feeling overwhelmed and unfulfilled.

                                                                                      Parting words

                                                                                       

                                                                                      “Tell me how you spend your time, and I’ll tell you how successful you are.”

                                                                                      Gabe Marusca

                                                                                       

                                                                                      [spp-transcript]

                                                                                       

                                                                                      Connect with Gabe Marusca

                                                                                      • LinkedIn
                                                                                      • Twitter
                                                                                      • Instagram
                                                                                      • Website
                                                                                      • Podcast
                                                                                      
                                                                                      

                                                                                      Andrew’s books

                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                      • My Worst Investment Ever
                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                      
                                                                                      

                                                                                      Andrew’s online programs

                                                                                      • Valuation Master Class
                                                                                      • The Become a Better Investor Community
                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                      • Finance Made Ridiculously Simple
                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                      • Achieve Your Goals
                                                                                      
                                                                                      

                                                                                      Connect with Andrew Stotz:

                                                                                      • astotz.com
                                                                                      • LinkedIn
                                                                                      • Facebook
                                                                                      • Instagram
                                                                                      • Threads
                                                                                      • Twitter
                                                                                      • YouTube
                                                                                      • My Worst Investment Ever Podcast
                                                                                      
                                                                                      ]]>eab74570-b412-448d-8cce-06979a160006Thu, 04 Jan 2024 06:00:00 +070047:45falsefullGiuseppe Grammatico - Pick the Medium That Works for You and Stick With ItBIO: Giuseppe Grammatico is a franchising advisor who has owned several Master Franchise licenses and has enjoyed a successful franchising career, guiding over 200 individuals through business ownership, many for the first time.

                                                                                      STORY: Giuseppe hired a full-service marketing company that managed everything from his website to emails and social media posts. Giuseppe gave the company complete control of his business, and his voice got lost. He also got virtually zero return from hiring the company.

                                                                                      LEARNING: Pick the medium that works for you and stick with it. Publicity doesn’t mean revenue.

                                                                                       

                                                                                      “Just do your thing, have a plan going forward, and it’ll pay dividends down the road.”

                                                                                      Giuseppe Grammatico

                                                                                       

                                                                                      Guest profile

                                                                                      Giuseppe Grammatico is a franchising advisor who has owned a number of Master Franchise licenses and has enjoyed a successful franchising career, guiding over 200 individuals through business ownership, many for the first time. In addition to two decades in franchising, he also has 20 years of sales, marketing, and management experience. Book a free call with Giuseppe here.

                                                                                      Worst investment ever

                                                                                      Giuseppe was looking to take some things off his plate, so he hired a full-service marketing company that did everything from website management to emails and social media posts. Giuseppe’s voice got lost in this process. He had given someone else control of his brand and what he was doing. It all got diluted. Giuseppe felt like he’d been thrown in a box with just about every other company in the marketing company’s portfolio. He also got virtually zero return from hiring the company. In fact, it ended up causing more confusion for his business. It took Giuseppe a long time to regain control of his brand and voice.

                                                                                      Lessons learned

                                                                                      • Pick the medium that works for you and stick with it. Then, create all your content around that medium. If it’s just videos, then so be it, or if you’re a writer, write books and blogs.
                                                                                      • Do your thing, have a plan going forward, and it’ll pay dividends.
                                                                                      
                                                                                      

                                                                                      Andrew’s takeaways

                                                                                      • Publicity doesn’t mean revenue.
                                                                                      
                                                                                      

                                                                                      Actionable advice

                                                                                      Write your 12 Frequently Asked Questions, record your answers for each question in a video, and release it on all platforms. Repurpose the video into a blog post, snippets, LinkedIn carousel, and more.

                                                                                      Giuseppe’s recommendations

                                                                                      Giuseppe recommends reading Traction: Get a Grip on Your Business to learn how to keep everything balanced. Even if you don’t own a business, the book will teach you about the intricacies of managing your KPIs daily.

                                                                                      No.1 goal for the next 12 months

                                                                                      Giuseppe’s number one goal for the next 12 months is to work less and help more people than he did in 2023. He’s outsourced his marketing by having someone produce, edit, and share the content that he’s creating.

                                                                                      Parting words

                                                                                       

                                                                                      “Go for it. Life’s too short to be miserable. Take a chance on yourself, but do your due diligence and talk to people that own a business.”

                                                                                      Giuseppe Grammatico

                                                                                       

                                                                                      [spp-transcript]

                                                                                       

                                                                                      Connect with Giuseppe Grammatico

                                                                                      • Linkedin
                                                                                      • Twitter
                                                                                      • Facebook
                                                                                      • Instagram
                                                                                      • Website
                                                                                      • Book
                                                                                      • Podcast
                                                                                      
                                                                                      

                                                                                      Andrew’s books

                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                      • My Worst Investment Ever
                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                      
                                                                                      

                                                                                      Andrew’s online programs

                                                                                      • Valuation Master Class
                                                                                      • The Become a Better Investor Community
                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                      • Finance Made Ridiculously Simple
                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                      • Achieve Your Goals
                                                                                      
                                                                                      

                                                                                      Connect with Andrew Stotz:

                                                                                      • astotz.com
                                                                                      • LinkedIn
                                                                                      • Facebook
                                                                                      • Instagram
                                                                                      • Threads
                                                                                      • Twitter
                                                                                      • YouTube
                                                                                      • My Worst Investment Ever Podcast
                                                                                      
                                                                                      ]]>BIO: Giuseppe Grammatico is a franchising advisor who has owned several Master Franchise licenses and has enjoyed a successful franchising career, guiding over 200 individuals through business ownership, many for the first time.

                                                                                      STORY: Giuseppe hired a full-service marketing company that managed everything from his website to emails and social media posts. Giuseppe gave the company complete control of his business, and his voice got lost. He also got virtually zero return from hiring the company.

                                                                                      LEARNING: Pick the medium that works for you and stick with it. Publicity doesn’t mean revenue.

                                                                                       

                                                                                      “Just do your thing, have a plan going forward, and it’ll pay dividends down the road.”

                                                                                      Giuseppe Grammatico

                                                                                       

                                                                                      Guest profile

                                                                                      Giuseppe Grammatico is a franchising advisor who has owned a number of Master Franchise licenses and has enjoyed a successful franchising career, guiding over 200 individuals through business ownership, many for the first time. In addition to two decades in franchising, he also has 20 years of sales, marketing, and management experience. Book a free call with Giuseppe here.

                                                                                      Worst investment ever

                                                                                      Giuseppe was looking to take some things off his plate, so he hired a full-service marketing company that did everything from website management to emails and social media posts. Giuseppe’s voice got lost in this process. He had given someone else control of his brand and what he was doing. It all got diluted. Giuseppe felt like he’d been thrown in a box with just about every other company in the marketing company’s portfolio. He also got virtually zero return from hiring the company. In fact, it ended up causing more confusion for his business. It took Giuseppe a long time to regain control of his brand and voice.

                                                                                      Lessons learned

                                                                                      • Pick the medium that works for you and stick with it. Then, create all your content around that medium. If it’s just videos, then so be it, or if you’re a writer, write books and blogs.
                                                                                      • Do your thing, have a plan going forward, and it’ll pay dividends.
                                                                                      
                                                                                      

                                                                                      Andrew’s takeaways

                                                                                      • Publicity doesn’t mean revenue.
                                                                                      
                                                                                      

                                                                                      Actionable advice

                                                                                      Write your 12 Frequently Asked Questions, record your answers for each question in a video, and release it on all platforms. Repurpose the video into a blog post, snippets, LinkedIn carousel, and more.

                                                                                      Giuseppe’s recommendations

                                                                                      Giuseppe recommends reading Traction: Get a Grip on Your Business to learn how to keep everything balanced. Even if you don’t own a business, the book will teach you about the intricacies of managing your KPIs daily.

                                                                                      No.1 goal for the next 12 months

                                                                                      Giuseppe’s number one goal for the next 12 months is to work less and help more people than he did in 2023. He’s outsourced his marketing by having someone produce, edit, and share the content that he’s creating.

                                                                                      Parting words

                                                                                       

                                                                                      “Go for it. Life’s too short to be miserable. Take a chance on yourself, but do your due diligence and talk to people that own a business.”

                                                                                      Giuseppe Grammatico

                                                                                       

                                                                                      [spp-transcript]

                                                                                       

                                                                                      Connect with Giuseppe Grammatico

                                                                                      • Linkedin
                                                                                      • Twitter
                                                                                      • Facebook
                                                                                      • Instagram
                                                                                      • Website
                                                                                      • Book
                                                                                      • Podcast
                                                                                      
                                                                                      

                                                                                      Andrew’s books

                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                      • My Worst Investment Ever
                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                      
                                                                                      

                                                                                      Andrew’s online programs

                                                                                      • Valuation Master Class
                                                                                      • The Become a Better Investor Community
                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                      • Finance Made Ridiculously Simple
                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                      • Achieve Your Goals
                                                                                      
                                                                                      

                                                                                      Connect with Andrew Stotz:

                                                                                      • astotz.com
                                                                                      • LinkedIn
                                                                                      • Facebook
                                                                                      • Instagram
                                                                                      • Threads
                                                                                      • Twitter
                                                                                      • YouTube
                                                                                      • My Worst Investment Ever Podcast
                                                                                      
                                                                                      ]]>041ca2d7-69ce-478a-abde-5610d6024fe8Tue, 02 Jan 2024 06:00:00 +070022:57falsefullAndrew Stotz - 27 Top Podcast Interviews of 2023 to Reduce Risk and Increase ReturnIn 2023, I released about 160 My Worst Investment Ever podcast episodes, and this is a list of some of my and my listeners' favorites. I have also created a free “Top 27 from 2023” playlist where you can listen to and view this curated list for free. Just go to My Worst Investment Ever dot com and click the button that says, “Top 27 from 2023.” Since starting this podcast, I have published 760 episodes and look forward to continuing this journey in 2024! I welcome you on my journey “to help 1,000,000 people reduce risk in their lives.”

                                                                                      27. Ep738: Neil Johnson – Take the Profit When You Can

                                                                                      BIO: Neil Johnson is a renowned finance expert with over 30 years of experience in investment banking, merchant banking, and research analysis in Canadian and UK capital markets. He is the Executive Director and CEO of Duke Royalty, a $300 million alternative finance investment company listed on the London Stock Exchange.

                                                                                      STORY: Neil invested in an internet company building website templates when the internet started. The company filed to go public, but the financiers kept delaying the process and never went public. Six months later, the company went to zero. Neil lost his entire investment.

                                                                                      LEARNING: Take the profit when you can. Take some money out and play with the rest. Do your due diligence.

                                                                                       

                                                                                      “Try not to be overly greedy. There’s something about leaving a little on the table for someone else.”

                                                                                       

                                                                                      26. Ep658: Jeroen Blokland – Know the Actual Business Outlook Before Investing

                                                                                      BIO: Jeroen Blokland is a multi-asset investor with a long-term track record. He worked at Dutch investment bank, Robeco for almost 20 and now runs his independent investment research company, True Insights. Find him on Twitter.

                                                                                      STORY: Jeroen’s first investment was in a Dutch company selling PCs. He barely did any research or due diligence. The company reported a loss of $27 million in the same year Jeroen invested. It later went bankrupt, leaving him with a massive loss.

                                                                                      LEARNING: Know the actual outlook of a company before investing. Diversify your portfolio.

                                                                                       

                                                                                      “90% of the investing population doesn’t know the actual outlook of a company.”

                                                                                       

                                                                                      25. Ep674: Jesse Felder – Don’t Rationalize a Lousy Trade

                                                                                      BIO: Jesse Felder started his career at Bear Stearns and co-founded a multi-billion-dollar hedge fund firm. He left Wall Street to focus on The Felder Report and hosts the Superinvestors podcast. Find him on Twitter.

                                                                                      STORY: Jesse found a “cigar butt” stock that was cheap and performed extraordinarily well in just a few months after he took a sizable position. A friend convinced him to hold the stock long-term instead of short-term as planned. Government legislation affected the business, and Jesse lost about 50% of his investment.

                                                                                      LEARNING: Don’t rationalize a bad trade; get out. Be very careful when you’re in a situation where the government is supporting an industry.

                                                                                       

                                                                                      “When you’re in a situation that’s not working out as you would hope, rather than dig the hole deeper, move on and find something different.”

                                                                                       

                                                                                      24. Ep668: Jason Hsu – The Market Can Be Crazy for Longer than You Have the Conviction

                                                                                      BIO: Jason Hsu is the founder, chairman, and CIO of Rayliant Global Advisors, a global investment management group with over US$15+ billion in assets under management as of June 30, 2022. Find him on Twitter.

                                                                                      STORY: Jason bet against the GameStop short squeeze and learned that John Maynard Keynes’ saying that “markets can remain irrational longer than you can remain solvent” still holds true.

                                                                                      LEARNING: The market can be crazy for longer than you have the conviction to stay invested. Apply position constraints and diversify.

                                                                                       

                                                                                      “In the short run, the market can really stay crazy for longer than you have the money to stay on. And if you forget that, the market will remind you in as painful of a way as possible.”

                                                                                       

                                                                                      23. Ep646: Praveen Kumar Rajbhar – Don’t Fall in Love with Your Own Ideas

                                                                                      BIO: Praveen Kumar Rajbhar is an entrepreneur, founder, and CEO SkillingYou, an employability Skills Focused EdTech startup in rural India. Find him on Twitter.

                                                                                      STORY: When Praveen started his first startup, he spent money to hire many people, buy a lot of gadgets, and rent a huge office space. The business collapsed in less than two years.

                                                                                      LEARNING: Get the right mentor to guide you on how to make your startup a success. You don’t need a big team to be successful. Get on-time and accurate financial statements every month.

                                                                                       

                                                                                      “Having the right mentor will help you create a great company.”

                                                                                       

                                                                                      22. Ep731: Robin Wigglesworth – You Can’t Outsmart the Markets

                                                                                      BIO: Robin Wigglesworth is the editor of Alphaville, the FT’s financial blog. From Oslo, Norway, he leads a team of writers who dig into anything deeply nerdy or delightful that they spot. Find him on Twitter.

                                                                                      STORY: Robin invested in an ETF in Norway, a consumer durables company, and a fertilizer company after the 2008 financial crisis. These companies did incredibly well. Unfortunately, Robin reacted to short-term headlines when the European crisis started erupting and sold out.

                                                                                      LEARNING: You can’t outsmart the markets. Always let your winners ride.

                                                                                       

                                                                                      “Always let your winners ride.”

                                                                                       

                                                                                      21. Ep695: Jack Farley – Don’t Play in Markets You Don’t Know

                                                                                      BIO: Jack Farley is the host of the Forward Guidance podcast. He is interested in all things liquidity, macro, and central banking. Find him on Twitter.

                                                                                      STORY: Jack bought a lot of put options on the markets and individual stocks, notably Tesla, in February 2020 when the market was bearish. When the market crashed in March 2020, Jack made so much money (on paper). But, soon, the market started going up, and his position dropped to zero.

                                                                                      LEARNING: Don’t view the market as a place to create wealth; view it as a place to grow it. Don’t confuse being lucky with being an intelligent investor.

                                                                                       

                                                                                      “When you get a windfall, realize those gains, and at the very least, trim the position down.”

                                                                                       

                                                                                      20. In 2023, I released about 160 My Worst Investment Ever podcast episodes, and this is a list of some of my and my listeners' favorites. I have also created a free “Top 27 from 2023” playlist where you can listen to and view this curated list for free. Just go to My Worst Investment Ever dot com and click the button that says, “Top 27 from 2023.” Since starting this podcast, I have published 760 episodes and look forward to continuing this journey in 2024! I welcome you on my journey “to help 1,000,000 people reduce risk in their lives.”

                                                                                      27. Ep738: Neil Johnson – Take the Profit When You Can

                                                                                      BIO: Neil Johnson is a renowned finance expert with over 30 years of experience in investment banking, merchant banking, and research analysis in Canadian and UK capital markets. He is the Executive Director and CEO of Duke Royalty, a $300 million alternative finance investment company listed on the London Stock Exchange.

                                                                                      STORY: Neil invested in an internet company building website templates when the internet started. The company filed to go public, but the financiers kept delaying the process and never went public. Six months later, the company went to zero. Neil lost his entire investment.

                                                                                      LEARNING: Take the profit when you can. Take some money out and play with the rest. Do your due diligence.

                                                                                       

                                                                                      “Try not to be overly greedy. There’s something about leaving a little on the table for someone else.”

                                                                                       

                                                                                      26. Ep658: Jeroen Blokland – Know the Actual Business Outlook Before Investing

                                                                                      BIO: Jeroen Blokland is a multi-asset investor with a long-term track record. He worked at Dutch investment bank, Robeco for almost 20 and now runs his independent investment research company, True Insights. Find him on Twitter.

                                                                                      STORY: Jeroen’s first investment was in a Dutch company selling PCs. He barely did any research or due diligence. The company reported a loss of $27 million in the same year Jeroen invested. It later went bankrupt, leaving him with a massive loss.

                                                                                      LEARNING: Know the actual outlook of a company before investing. Diversify your portfolio.

                                                                                       

                                                                                      “90% of the investing population doesn’t know the actual outlook of a company.”

                                                                                       

                                                                                      25. Ep674: Jesse Felder – Don’t Rationalize a Lousy Trade

                                                                                      BIO: Jesse Felder started his career at Bear Stearns and co-founded a multi-billion-dollar hedge fund firm. He left Wall Street to focus on The Felder Report and hosts the Superinvestors podcast. Find him on Twitter.

                                                                                      STORY: Jesse found a “cigar butt” stock that was cheap and performed extraordinarily well in just a few months after he took a sizable position. A friend convinced him to hold the stock long-term instead of short-term as planned. Government legislation affected the business, and Jesse lost about 50% of his investment.

                                                                                      LEARNING: Don’t rationalize a bad trade; get out. Be very careful when you’re in a situation where the government is supporting an industry.

                                                                                       

                                                                                      “When you’re in a situation that’s not working out as you would hope, rather than dig the hole deeper, move on and find something different.”

                                                                                       

                                                                                      24. Ep668: Jason Hsu – The Market Can Be Crazy for Longer than You Have the Conviction

                                                                                      BIO: Jason Hsu is the founder, chairman, and CIO of Rayliant Global Advisors, a global investment management group with over US$15+ billion in assets under management as of June 30, 2022. Find him on Twitter.

                                                                                      STORY: Jason bet against the GameStop short squeeze and learned that John Maynard Keynes’ saying that “markets can remain irrational longer than you can remain solvent” still holds true.

                                                                                      LEARNING: The market can be crazy for longer than you have the conviction to stay invested. Apply position constraints and diversify.

                                                                                       

                                                                                      “In the short run, the market can really stay crazy for longer than you have the money to stay on. And if you forget that, the market will remind you in as painful of a way as possible.”

                                                                                       

                                                                                      23. Ep646: Praveen Kumar Rajbhar – Don’t Fall in Love with Your Own Ideas

                                                                                      BIO: Praveen Kumar Rajbhar is an entrepreneur, founder, and CEO SkillingYou, an employability Skills Focused EdTech startup in rural India. Find him on Twitter.

                                                                                      STORY: When Praveen started his first startup, he spent money to hire many people, buy a lot of gadgets, and rent a huge office space. The business collapsed in less than two years.

                                                                                      LEARNING: Get the right mentor to guide you on how to make your startup a success. You don’t need a big team to be successful. Get on-time and accurate financial statements every month.

                                                                                       

                                                                                      “Having the right mentor will help you create a great company.”

                                                                                       

                                                                                      22. Ep731: Robin Wigglesworth – You Can’t Outsmart the Markets

                                                                                      BIO: Robin Wigglesworth is the editor of Alphaville, the FT’s financial blog. From Oslo, Norway, he leads a team of writers who dig into anything deeply nerdy or delightful that they spot. Find him on Twitter.

                                                                                      STORY: Robin invested in an ETF in Norway, a consumer durables company, and a fertilizer company after the 2008 financial crisis. These companies did incredibly well. Unfortunately, Robin reacted to short-term headlines when the European crisis started erupting and sold out.

                                                                                      LEARNING: You can’t outsmart the markets. Always let your winners ride.

                                                                                       

                                                                                      “Always let your winners ride.”

                                                                                       

                                                                                      21. Ep695: Jack Farley – Don’t Play in Markets You Don’t Know

                                                                                      BIO: Jack Farley is the host of the Forward Guidance podcast. He is interested in all things liquidity, macro, and central banking. Find him on Twitter.

                                                                                      STORY: Jack bought a lot of put options on the markets and individual stocks, notably Tesla, in February 2020 when the market was bearish. When the market crashed in March 2020, Jack made so much money (on paper). But, soon, the market started going up, and his position dropped to zero.

                                                                                      LEARNING: Don’t view the market as a place to create wealth; view it as a place to grow it. Don’t confuse being lucky with being an intelligent investor.

                                                                                       

                                                                                      “When you get a windfall, realize those gains, and at the very least, trim the position down.”

                                                                                       

                                                                                      20. Ep739: William Cohan – Get the Numbers Right Before You Invest

                                                                                      BIO: For nearly two decades William D. Cohan was a Wall Street investment banker and is now a New York Times bestselling author of seven non-fiction narratives, including Power Failure. Find him on Twitter.

                                                                                      STORY: In 1990, William asked a trader to buy him 10 shares in Berkshire Hathaway, thinking a share was selling at $1,200, only to be told it was $12,000. He decided to keep two shares and sold the other eight. Had William invested $120,000 for the 10 shares in Berkshire Hathaway in 1990, they would be worth $7.4 million today.

                                                                                      LEARNING: Get the numbers right before you invest.

                                                                                       

                                                                                      “I decided to write this book for people who wanted to know about how Wall Street works but were afraid to ask how things work.”

                                                                                       

                                                                                      19. Ep655: Pim van Vliet – Just Because It’s Cheap Doesn’t Mean You Have to Buy It

                                                                                      BIO: Pim van Vliet is Head of Conservative Equities and Chief Quant Strategist at Dutch investment bank, Robeco. He is responsible for a wide range of global, regional, and sustainable low-volatility strategies. Find him on Twitter.

                                                                                      STORY: Pim wanted to make more money investing, so he decided to go all in on a cheap stock. He believed the price would eventually go up as it had done a few years back. Unfortunately, the company went bankrupt, and Pim lost 75% of his investment.

                                                                                      LEARNING: Don’t be overconfident and over-optimistic when investing. Just because it’s cheap doesn’t mean you have to buy it.

                                                                                       

                                                                                      “I thought taking risks gives you a return. That’s not always the case. Taking more risk could give you a lower return.”

                                                                                       

                                                                                      18. Ep708: Phil Bak – Be Slow to Jump Onto Bandwagons

                                                                                      BIO: Phil Bak is the CEO of Armada ETFs, a REIT-specialty asset manager that delivers customized solutions to REIT investors through ETFs, SMAs, and proprietary AI and machine learning REIT valuation models. Find him on Twitter.

                                                                                      STORY: Phil got into baseball cards when he was 14. Rookie Greg Jeffries became the hype one year and was poised to be the next big thing. Phil bought the hype, sold all his cards, and invested in Jeffries’ cards. He believed cards would be worth $40 to $50 a piece in just a few years. It never happened because Jeffries’ career didn’t pan out, and the entire baseball card bubble collapsed.

                                                                                      LEARNING: Be slow to jump onto bandwagons. Expect the unexpected, be prepared, and have a backup plan. Be diversified in as many different ways as possible.

                                                                                       

                                                                                      “As long as you can recognize your mistake, learn and grow from it, then you understand that investing is a risky business. That will make you a smarter investor.”

                                                                                       

                                                                                      17. Ep719: David Kass – Don’t Invest in a Company Unless the CEO Owns a Large Stake

                                                                                      BIO: Dr. David Kass received his Ph.D. in Business Economics from Harvard University and has published articles in corporate finance, industrial organization, and health economics. He teaches financial management at the University of Maryland and has been blogging about Warren Buffett for more than a decade.

                                                                                      STORY: In his early 20s, David invested $2,000 in a company paying out high dividends. Only after he invested did he realize that none of the senior executives in the company owned its shares. Soon enough, the stock went down to zero due to accounting fraud.

                                                                                      LEARNING: Only invest in a company if senior executives, especially the CEO, own a significant stake. The value of the CEO’s stock in his own company to his annual salary should be at least 3:1.

                                                                                       

                                                                                      “Look carefully at proxy statements and make sure the CEO and other senior managers have skin in the game, that their interests are likely aligned with yours and have a large stake through their stock holdings.”

                                                                                       

                                                                                      16. Ep667: Shreekkanth Viswanathan – Qualitative Strengths of a Company Matter Too

                                                                                      BIO: Shreekkanth (“Shree”) Viswanathan is the founder and portfolio manager of SVN Capital, a Chicago-based, concentrated, long-only, global equity-focused fund. Find him on Twitter.

                                                                                      STORY: Shree’s biggest mistake was an error of omission. That is, after studying a particular business, he decided not to invest in it for various reasons. The stock turned out to be a multi-bagger a couple of years later.

                                                                                      LEARNING: The qualitative strengths of a company are not always readily apparent in the financials. Get out and work in business; it will make you a better analyst and investor. Shree introduced me to a study of 64,000 companies from 1990 to 2020, which showed that 57% of these stocks underperformed one-month U.S. Treasury bills in compound returns. Also, the top-performing 2.4% of firms, or 1,500, accounted for all US$76trn net global stock market wealth creation over the same period. Here’s a link to the study.

                                                                                       

                                                                                      “If you don’t know who you are, the market is an expensive place to find out.”

                                                                                       

                                                                                      15. Ep746: James M. Dahle – Don’t Buy More Insurance Than You Need

                                                                                      BIO: James M. Dahle, MD, is a practicing emergency physician who took an interest in personal finance and founded The White Coat Investor in 2011 to help fellow docs get a fair shake on Wall Street. Find him on Twitter.

                                                                                      STORY: James got sold a whole life insurance policy in medical school. He invested in it, thinking it would be a good option, only to realize seven years later that it was not. When he pulled out of the policy, he lost 33% of the premiums he had paid.

                                                                                      LEARNING: You must understand anything you buy. Don’t buy more insurance than you need. Focus on one catastrophe-related insurance product that’s reasonable.

                                                                                       

                                                                                      “Insurance is expensive, so don’t buy more than you need.”

                                                                                       

                                                                                      14. Ep756: Peter Goldstein – Check Your Emotions at the Door

                                                                                      BIO: Peter Goldstein is a seasoned entrepreneur, capital markets expert, and investor with over 35 years of diverse international business experience. He is CEO of Exchange Listing LLC. Find him on Twitter.

                                                                                      STORY: He and four others put a significant amount of money into opening a facility selling cannabis in Long Beach, California. This was a time when cannabis was in great demand and was in the process of being legalized for recreational purposes. At the time, there were no clear regulations, making compliance with the ever-changing rules costly to the point where the business was not making any profits.

                                                                                      LEARNING: Check...]]>a91c70e6-f791-4a30-8766-8e828ec5f99eThu, 28 Dec 2023 06:00:00 +070021:50falsefullJohan Norberg - We Have to Fight for CapitalismBIO: Johan Norberg is an author, lecturer, and historian of ideas from Stockholm, Sweden. His books on economics, politics, and history have been translated into more than 30 languages.

                                                                                      STORY: Johan talks about capitalism and why it’s important.

                                                                                      LEARNING: We should never lose sight of the benefits of capitalism. Capitalism is about peace, trust, and voluntary exchange, not war.

                                                                                       

                                                                                      “No matter what your long-term objective is, it’s better to be wealthy using resources in an effective manner and being more productive.”

                                                                                      Johan Norberg

                                                                                       

                                                                                      Guest profile

                                                                                      Johan Norberg is an author, lecturer, and historian of ideas from Stockholm, Sweden. His books on economics, politics, and history have been translated into more than 30 languages.

                                                                                      In today’s episode, Johan discusses capitalism and its importance. Johan recently published his latest book, The Capitalist Manifesto. Like the title, the book is brilliant! Elon Musk said: “This book is an excellent explanation of why capitalism is not just successful, but morally right, especially chapter 4.”

                                                                                      Have we lost sight of the benefits of capitalism?

                                                                                      Without free markets and free trade, we’d probably be nowhere because it was only with the advent of higher productivity, open global markets, and free enterprise. Remember that when you give people more freedom to seek out opportunities to innovate, develop new business models, and exchange their best with the best of others, you have the machinery to reduce poverty and hunger worldwide.

                                                                                      We must never forget this process because once people reach a certain threshold, they take wealth, opportunities, and technologies for granted and forget where they came from. This happens to many countries worldwide, electing the populace who use wealth without realizing that it’s not a pile of cash that happens to lie around.

                                                                                      If we were to stop producing and innovating and start consuming and redistributing the wealth already on the planet, all of it would be gone in around four years. So wealth has to be created every day by hard work.

                                                                                      Can government and capitalism co-exist?

                                                                                      For your business to make a profit, you must make all the other groups happy. You have to satisfy your customers by giving them something they value more than the money they hand you. You must also pay your workers, suppliers, and those who lent you money. Then, and only then, if you made all these groups happy, and there’s something left for you, which will be heavily taxed, can you make a profit. The bigger your profit, the more good you’ve done to society.

                                                                                      However, some profit is made not by competing over having the best goods and services but by having good connections with politicians and governments. They get subsidies and tariff protection from governments picking taxpayers’ pockets and handing them to businesses. That’s the opposite of a free market and capitalism—cronyism. It’s a horrible thing that can only end by stopping politicians from entering the game of business, picking winners, and deciding who gets what.

                                                                                      Unfortunately, the future has no lobbyists, business organizations, or trade unions to defend them, only the incumbents and the old alternatives who constantly tailor all the regulations and policies to their needs and demands. Johan says the natural history of business regulation is always that you have, at first, a combination of people who want to do good. They see problems and want to improve upon things, so they want to regulate and ensure that it’s in the interest of society.

                                                                                      But these well-meaning do-gooders often ally with people genuinely interested in their business models and the trade unions. So, in combination, they come forth with new regulations, constantly tailor-made to support incumbents in what they are doing. Then, the do-gooders move on to the next field to the next sector because they’ve succeeded. But those with a particular economic interest in those regulations stay behind because this is their sector. They constantly adapt it more to their own situation and to keep the competitors out. And that’s incredibly dangerous.

                                                                                      Johan’s take is that businesses have one objective: to make the world a better place by being successful. By doing so, businesses ensure that our resources, machinery, and labor are being used as efficiently as possible. He doesn’t believe that successful businesses have to give something back to society as some apology for being successful in making a profit because the fact that they made a profit proves that they’ve done something for the community.

                                                                                      Capitalism is about peace, trust, and voluntary exchange

                                                                                      Johan says that capitalism is for peace. The only people who benefit from war are politicians and companies that make weapons of war. Capitalism is the first economic system where you only get rich by enriching others, where everybody’s free to walk away from any deal.

                                                                                      Capitalism is the first instance where if you want the resources of others, then you’d better give them something that they value even more. That’s a peaceful exchange, by definition.

                                                                                      Johan adds that the first rule of good business is not to kill your customers and suppliers. People want to trade peacefully, and they have their best ideas, suppliers, and markets in other places. Only the dictators and the rulers wish to wage war.

                                                                                      Johan insists that the natural way to make society a better place, in the long run, is to ensure that our resources are used decently and not wasted or used as people’s pet projects. So, no matter what your long-term objective is, it’s better to be wealthy by effectively using resources and being more productive.

                                                                                      Parting words

                                                                                       

                                                                                      “I think capitalism deserves a manifesto and some praise because it’s tough work. It’s difficult to create wealth and opportunities for people. So, if you actually create value for other people, know that you’re a hero. That’s what I’m trying to do.”

                                                                                      Johan Norberg

                                                                                       

                                                                                      [spp-transcript]

                                                                                       

                                                                                      Connect with Johan Norberg

                                                                                      • Linkedin
                                                                                      • Twitter
                                                                                      • Instagram
                                                                                      • Facebook
                                                                                      • Website
                                                                                      • Book
                                                                                      
                                                                                      

                                                                                      Andrew’s books

                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                      • My Worst Investment Ever
                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                      
                                                                                      

                                                                                      Andrew’s online programs

                                                                                      • Valuation Master Class
                                                                                      • The Become a Better Investor Community
                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                      • Finance Made Ridiculously Simple
                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                      • Achieve Your Goals
                                                                                      
                                                                                      

                                                                                      Connect with Andrew Stotz:

                                                                                      • astotz.com
                                                                                      • LinkedIn
                                                                                      • BIO: Johan Norberg is an author, lecturer, and historian of ideas from Stockholm, Sweden. His books on economics, politics, and history have been translated into more than 30 languages.

                                                                                        STORY: Johan talks about capitalism and why it’s important.

                                                                                        LEARNING: We should never lose sight of the benefits of capitalism. Capitalism is about peace, trust, and voluntary exchange, not war.

                                                                                         

                                                                                        “No matter what your long-term objective is, it’s better to be wealthy using resources in an effective manner and being more productive.”

                                                                                        Johan Norberg

                                                                                         

                                                                                        Guest profile

                                                                                        Johan Norberg is an author, lecturer, and historian of ideas from Stockholm, Sweden. His books on economics, politics, and history have been translated into more than 30 languages.

                                                                                        In today’s episode, Johan discusses capitalism and its importance. Johan recently published his latest book, The Capitalist Manifesto. Like the title, the book is brilliant! Elon Musk said: “This book is an excellent explanation of why capitalism is not just successful, but morally right, especially chapter 4.”

                                                                                        Have we lost sight of the benefits of capitalism?

                                                                                        Without free markets and free trade, we’d probably be nowhere because it was only with the advent of higher productivity, open global markets, and free enterprise. Remember that when you give people more freedom to seek out opportunities to innovate, develop new business models, and exchange their best with the best of others, you have the machinery to reduce poverty and hunger worldwide.

                                                                                        We must never forget this process because once people reach a certain threshold, they take wealth, opportunities, and technologies for granted and forget where they came from. This happens to many countries worldwide, electing the populace who use wealth without realizing that it’s not a pile of cash that happens to lie around.

                                                                                        If we were to stop producing and innovating and start consuming and redistributing the wealth already on the planet, all of it would be gone in around four years. So wealth has to be created every day by hard work.

                                                                                        Can government and capitalism co-exist?

                                                                                        For your business to make a profit, you must make all the other groups happy. You have to satisfy your customers by giving them something they value more than the money they hand you. You must also pay your workers, suppliers, and those who lent you money. Then, and only then, if you made all these groups happy, and there’s something left for you, which will be heavily taxed, can you make a profit. The bigger your profit, the more good you’ve done to society.

                                                                                        However, some profit is made not by competing over having the best goods and services but by having good connections with politicians and governments. They get subsidies and tariff protection from governments picking taxpayers’ pockets and handing them to businesses. That’s the opposite of a free market and capitalism—cronyism. It’s a horrible thing that can only end by stopping politicians from entering the game of business, picking winners, and deciding who gets what.

                                                                                        Unfortunately, the future has no lobbyists, business organizations, or trade unions to defend them, only the incumbents and the old alternatives who constantly tailor all the regulations and policies to their needs and demands. Johan says the natural history of business regulation is always that you have, at first, a combination of people who want to do good. They see problems and want to improve upon things, so they want to regulate and ensure that it’s in the interest of society.

                                                                                        But these well-meaning do-gooders often ally with people genuinely interested in their business models and the trade unions. So, in combination, they come forth with new regulations, constantly tailor-made to support incumbents in what they are doing. Then, the do-gooders move on to the next field to the next sector because they’ve succeeded. But those with a particular economic interest in those regulations stay behind because this is their sector. They constantly adapt it more to their own situation and to keep the competitors out. And that’s incredibly dangerous.

                                                                                        Johan’s take is that businesses have one objective: to make the world a better place by being successful. By doing so, businesses ensure that our resources, machinery, and labor are being used as efficiently as possible. He doesn’t believe that successful businesses have to give something back to society as some apology for being successful in making a profit because the fact that they made a profit proves that they’ve done something for the community.

                                                                                        Capitalism is about peace, trust, and voluntary exchange

                                                                                        Johan says that capitalism is for peace. The only people who benefit from war are politicians and companies that make weapons of war. Capitalism is the first economic system where you only get rich by enriching others, where everybody’s free to walk away from any deal.

                                                                                        Capitalism is the first instance where if you want the resources of others, then you’d better give them something that they value even more. That’s a peaceful exchange, by definition.

                                                                                        Johan adds that the first rule of good business is not to kill your customers and suppliers. People want to trade peacefully, and they have their best ideas, suppliers, and markets in other places. Only the dictators and the rulers wish to wage war.

                                                                                        Johan insists that the natural way to make society a better place, in the long run, is to ensure that our resources are used decently and not wasted or used as people’s pet projects. So, no matter what your long-term objective is, it’s better to be wealthy by effectively using resources and being more productive.

                                                                                        Parting words

                                                                                         

                                                                                        “I think capitalism deserves a manifesto and some praise because it’s tough work. It’s difficult to create wealth and opportunities for people. So, if you actually create value for other people, know that you’re a hero. That’s what I’m trying to do.”

                                                                                        Johan Norberg

                                                                                         

                                                                                        [spp-transcript]

                                                                                         

                                                                                        Connect with Johan Norberg

                                                                                        • Linkedin
                                                                                        • Twitter
                                                                                        • Instagram
                                                                                        • Facebook
                                                                                        • Website
                                                                                        • Book
                                                                                        
                                                                                        

                                                                                        Andrew’s books

                                                                                        • How to Start Building Your Wealth Investing in the Stock Market
                                                                                        • My Worst Investment Ever
                                                                                        • 9 Valuation Mistakes and How to Avoid Them
                                                                                        • Transform Your Business with Dr.Deming’s 14 Points
                                                                                        
                                                                                        

                                                                                        Andrew’s online programs

                                                                                        • Valuation Master Class
                                                                                        • The Become a Better Investor Community
                                                                                        • How to Start Building Your Wealth Investing in the Stock Market
                                                                                        • Finance Made Ridiculously Simple
                                                                                        • FVMR Investing: Quantamental Investing Across the World
                                                                                        • Become a Great Presenter and Increase Your Influence
                                                                                        • Transform Your Business with Dr. Deming’s 14 Points
                                                                                        • Achieve Your Goals
                                                                                        
                                                                                        

                                                                                        Connect with Andrew Stotz:

                                                                                        • astotz.com
                                                                                        • LinkedIn
                                                                                        • Facebook
                                                                                        • Instagram
                                                                                        • Threads
                                                                                        • Twitter
                                                                                        • YouTube
                                                                                        • My Worst Investment Ever Podcast
                                                                                        
                                                                                        ]]>a0ba0d89-92c1-42fc-8b90-6a1440f5ec8dTue, 26 Dec 2023 06:00:00 +070048:00falsefullSteve Faktor – How to Build Your Investment FutureBIO: Steve Faktor is a former Fortune-100 executive—turned entrepreneur, futurist author of Econovation, and podcaster. As Managing Director of IdeaFaktory Innovation, he helps tech, financial services, and consumer goods clients see and build the future.

                                                                                        STORY: Steve joins the My Worst Investment Ever podcast again, this time sharing advice on how investors can see and build their investment futures.

                                                                                        LEARNING: Try to understand the future by differentiating between noise and legitimate signals. Don’t let others impose on your story. Act in principle.

                                                                                         

                                                                                        “I would like to see more people acting in a principled way because even if you win, but you do it without principle, you will have lost because those same unprincipled methods will come back to haunt you.”

                                                                                        Steve Faktor

                                                                                         

                                                                                        Guest profile

                                                                                        Steve Faktor is a former Fortune-100 executive—turned entrepreneur, futurist author of Econovation, and podcaster. As Managing Director of IdeaFaktory Innovation, he helps tech, financial services, and consumer goods clients see and build the future.

                                                                                        Steve is a LinkedIn Influencer with over 750,000 followers and has been featured in Forbes, Harvard Business Review, and The Wall Street Journal, among others. He’s a popular keynote speaker at major events and numerous corporations.

                                                                                        The McFuture Podcast features Steve’s provocative predictions and prescriptions, as well as guests like Larry King, comedian Jim Jefferies, Governor Jesse Ventura, Nobel Economist Joseph Stiglitz, former ACLU President Nadine Strossen, Megachurch Pastor AR Bernard, and many more.

                                                                                        Previously, Steve launched multiple $150m+ loyalty, payments, and e-commerce products & services as head of the American Express Chairman’s Innovation Fund, SVP at Citi Ventures, VP of Strategy & Innovation at MasterCard, and management consultant at Andersen.

                                                                                        Steve joins the My Worst Investment Ever podcast again, sharing advice on how investors can see and build their investment futures. Listen to his previous episode: Take the Risk and Pursue Your Dreams.

                                                                                        Understanding the future as a long-term investor

                                                                                        If you want to invest in three to ten-year opportunities, Steve says you need to know what the future will look like or at least have an idea of what that might be. However, as we try to understand the future, Steve says most of what we are reacting to is noise. You therefore, need to learn how to filter out what is signal and what is noise. Once you’ve identified which opportunities are legitimate signals and not noise, ask yourself where they could go. You’ll never know for sure. But again, that’s where you assign probabilities and say, this is likely to happen or more likely than something else. Now that you have an idea of where these things might go and what this future might look like, ask yourself how you’ll act in that future.

                                                                                        Steve adds that there’s another equal danger to listening to noise, which is deafness. So there’s the hearing of everything that may not be relevant or important, and then there’s complete deafness. Steve says the vast majority of people are deaf. And so they’re not even hearing and understanding the signals or the noises. Such people are complete pawns in whatever the people who are active and responding to either signal or noise will determine.

                                                                                        This kind of deafness is because some people there are institutionalized and believe that whatever system has worked for them is what is working. They don’t have an incentive to look any deeper. So they just putter along.

                                                                                        Dealing with propaganda

                                                                                        While propaganda is a negative characterization, and for good reason, Steve thinks personal narratives are important. The story that you tell yourself of how the world works and what matters to you is the story that will motivate you to do something. Now the question is, is it a good something or a bad something? Will it propel you forward to be a better person to help others to do things that are moral and unjust? Or will it push you to do harmful and destructive things, profiteering, or whatever else that may not be moral?

                                                                                        So the question is, what is the story? What are the stories that we want to have versus the stories others want us to have? So, regarding propaganda, Steve believes that what matters is the imposition of other people’s stories into our lives and our response to them. Will you make their imposition part of your story, or do you have the ability to decide what your story should be? Steve says that’s tricky because we’re not equipped to deal with this level of propaganda individually.

                                                                                        The victim-oppressor ideology

                                                                                        Steve also talks about a terrifying ideological thing currently happening, especially in the education system. There are groups in education institutions about the victim-oppressor ideology. According to Steve, this ideology works by weaponizing empathy. It’s a brutal ideology, but its brutality is cloaked in justice and kindness. So, it’s the appearance of compassion and empathy. So people care about the victim but are prepared to stand behind or have the state impose the most incredible force to achieve the equity and kindness they think is just.

                                                                                        Steve believes the only way to stop this ideology is to emphasize morality. We need a re-moralization because the former systems of morality have failed as they’ve outlived their useful life. Steve insists that empathy can be weaponized when it’s not paired with morality. But people are far more concerned with the appearance of goodness than the actuality and reality of virtue. And that is where the problem is. Combining the lack of morality, weaponized empathy, appearances, and the motivations on social media to present yourself a certain way becomes a deadly combination. And so what we desperately need is re-moralization.

                                                                                        The thing that concerns Steve the most, he adds, is principles. Principles, just like morality, are unfortunately a luxury good. When you don’t have things, you aren’t too worried about being that moral. You’ll steal to get food for your child, for example. However, most people in the US have enough—not what they feel they should have—but are at a point where they can afford morality and principle. But they’re not buying either. Steve would like to see more people acting in a principled way because even if you win but it was without principle, you will have lost. Those same unprincipled methods will come back to haunt you.

                                                                                        Parting words

                                                                                         

                                                                                        “What do you believe in? What do you think a moral person is? What do you think a principled person is? What do you think is right and wrong, and does it apply equally to the people you hate as to those that you love? That’s what I want people to think about because I think that’s the crisis of our time.”

                                                                                        Steve Faktor

                                                                                         

                                                                                        Connect with Steve Faktor

                                                                                        • LinkedIn
                                                                                        • Twitter
                                                                                        • YouTube
                                                                                        • Website
                                                                                        • Podcast
                                                                                        
                                                                                        

                                                                                        Andrew’s books

                                                                                        • How to Start Building Your Wealth Investing in the Stock Market
                                                                                        • My Worst Investment Ever
                                                                                        • 9 Valuation Mistakes and How to Avoid Them
                                                                                        • Transform Your Business with Dr.Deming’s 14 Points
                                                                                        
                                                                                        

                                                                                        Andrew’s online programs

                                                                                        • Valuation Master Class
                                                                                        • The Become a Better Investor Community
                                                                                        • How to Start Building Your Wealth Investing in the Stock Market
                                                                                        • Finance Made Ridiculously Simple
                                                                                        • FVMR Investing: Quantamental Investing Across the World
                                                                                        • BIO: Steve Faktor is a former Fortune-100 executive—turned entrepreneur, futurist author of Econovation, and podcaster. As Managing Director of IdeaFaktory Innovation, he helps tech, financial services, and consumer goods clients see and build the future.

                                                                                          STORY: Steve joins the My Worst Investment Ever podcast again, this time sharing advice on how investors can see and build their investment futures.

                                                                                          LEARNING: Try to understand the future by differentiating between noise and legitimate signals. Don’t let others impose on your story. Act in principle.

                                                                                           

                                                                                          “I would like to see more people acting in a principled way because even if you win, but you do it without principle, you will have lost because those same unprincipled methods will come back to haunt you.”

                                                                                          Steve Faktor

                                                                                           

                                                                                          Guest profile

                                                                                          Steve Faktor is a former Fortune-100 executive—turned entrepreneur, futurist author of Econovation, and podcaster. As Managing Director of IdeaFaktory Innovation, he helps tech, financial services, and consumer goods clients see and build the future.

                                                                                          Steve is a LinkedIn Influencer with over 750,000 followers and has been featured in Forbes, Harvard Business Review, and The Wall Street Journal, among others. He’s a popular keynote speaker at major events and numerous corporations.

                                                                                          The McFuture Podcast features Steve’s provocative predictions and prescriptions, as well as guests like Larry King, comedian Jim Jefferies, Governor Jesse Ventura, Nobel Economist Joseph Stiglitz, former ACLU President Nadine Strossen, Megachurch Pastor AR Bernard, and many more.

                                                                                          Previously, Steve launched multiple $150m+ loyalty, payments, and e-commerce products & services as head of the American Express Chairman’s Innovation Fund, SVP at Citi Ventures, VP of Strategy & Innovation at MasterCard, and management consultant at Andersen.

                                                                                          Steve joins the My Worst Investment Ever podcast again, sharing advice on how investors can see and build their investment futures. Listen to his previous episode: Take the Risk and Pursue Your Dreams.

                                                                                          Understanding the future as a long-term investor

                                                                                          If you want to invest in three to ten-year opportunities, Steve says you need to know what the future will look like or at least have an idea of what that might be. However, as we try to understand the future, Steve says most of what we are reacting to is noise. You therefore, need to learn how to filter out what is signal and what is noise. Once you’ve identified which opportunities are legitimate signals and not noise, ask yourself where they could go. You’ll never know for sure. But again, that’s where you assign probabilities and say, this is likely to happen or more likely than something else. Now that you have an idea of where these things might go and what this future might look like, ask yourself how you’ll act in that future.

                                                                                          Steve adds that there’s another equal danger to listening to noise, which is deafness. So there’s the hearing of everything that may not be relevant or important, and then there’s complete deafness. Steve says the vast majority of people are deaf. And so they’re not even hearing and understanding the signals or the noises. Such people are complete pawns in whatever the people who are active and responding to either signal or noise will determine.

                                                                                          This kind of deafness is because some people there are institutionalized and believe that whatever system has worked for them is what is working. They don’t have an incentive to look any deeper. So they just putter along.

                                                                                          Dealing with propaganda

                                                                                          While propaganda is a negative characterization, and for good reason, Steve thinks personal narratives are important. The story that you tell yourself of how the world works and what matters to you is the story that will motivate you to do something. Now the question is, is it a good something or a bad something? Will it propel you forward to be a better person to help others to do things that are moral and unjust? Or will it push you to do harmful and destructive things, profiteering, or whatever else that may not be moral?

                                                                                          So the question is, what is the story? What are the stories that we want to have versus the stories others want us to have? So, regarding propaganda, Steve believes that what matters is the imposition of other people’s stories into our lives and our response to them. Will you make their imposition part of your story, or do you have the ability to decide what your story should be? Steve says that’s tricky because we’re not equipped to deal with this level of propaganda individually.

                                                                                          The victim-oppressor ideology

                                                                                          Steve also talks about a terrifying ideological thing currently happening, especially in the education system. There are groups in education institutions about the victim-oppressor ideology. According to Steve, this ideology works by weaponizing empathy. It’s a brutal ideology, but its brutality is cloaked in justice and kindness. So, it’s the appearance of compassion and empathy. So people care about the victim but are prepared to stand behind or have the state impose the most incredible force to achieve the equity and kindness they think is just.

                                                                                          Steve believes the only way to stop this ideology is to emphasize morality. We need a re-moralization because the former systems of morality have failed as they’ve outlived their useful life. Steve insists that empathy can be weaponized when it’s not paired with morality. But people are far more concerned with the appearance of goodness than the actuality and reality of virtue. And that is where the problem is. Combining the lack of morality, weaponized empathy, appearances, and the motivations on social media to present yourself a certain way becomes a deadly combination. And so what we desperately need is re-moralization.

                                                                                          The thing that concerns Steve the most, he adds, is principles. Principles, just like morality, are unfortunately a luxury good. When you don’t have things, you aren’t too worried about being that moral. You’ll steal to get food for your child, for example. However, most people in the US have enough—not what they feel they should have—but are at a point where they can afford morality and principle. But they’re not buying either. Steve would like to see more people acting in a principled way because even if you win but it was without principle, you will have lost. Those same unprincipled methods will come back to haunt you.

                                                                                          Parting words

                                                                                           

                                                                                          “What do you believe in? What do you think a moral person is? What do you think a principled person is? What do you think is right and wrong, and does it apply equally to the people you hate as to those that you love? That’s what I want people to think about because I think that’s the crisis of our time.”

                                                                                          Steve Faktor

                                                                                           

                                                                                          Connect with Steve Faktor

                                                                                          • LinkedIn
                                                                                          • Twitter
                                                                                          • YouTube
                                                                                          • Website
                                                                                          • Podcast
                                                                                          
                                                                                          

                                                                                          Andrew’s books

                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                          • My Worst Investment Ever
                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                          
                                                                                          

                                                                                          Andrew’s online programs

                                                                                          • Valuation Master Class
                                                                                          • The Become a Better Investor Community
                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                          • Finance Made Ridiculously Simple
                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                          • Achieve Your Goals
                                                                                          
                                                                                          

                                                                                          Connect with Andrew Stotz:

                                                                                          • astotz.com
                                                                                          • LinkedIn
                                                                                          • Facebook
                                                                                          • Instagram
                                                                                          • Threads
                                                                                          • Twitter
                                                                                          • YouTube
                                                                                          • My Worst Investment Ever Podcast
                                                                                          
                                                                                          

                                                                                          Further reading mentioned

                                                                                          • John Perkins, Confessions of an Economic Hit Man.
                                                                                          
                                                                                          ]]>fa87332e-41d5-496e-a026-fdb171fa58bbThu, 21 Dec 2023 06:00:00 +070001:30:38falsefullEric Simonson - Not All Real Estate Investments Are Made EqualBIO: Eric Simonson is the Founder and CEO of Abundo, a financial planning firm that teaches and empowers people to take action and own their financial lives.

                                                                                          STORY: In 2020, during the early days of COVID-19, Eric and his wife sold their home and bought a condo because they wanted to live downtown. They later sold the condo in 2023 and lost about 10% on that home purchase.

                                                                                          LEARNING: Not all real estate investments are made equal. Focus on location and build quality. Don’t expect to flip new builds into a profit immediately. Don’t bet on a recovery of a big macro event.

                                                                                           

                                                                                          “Make sure you’re confident you’re gonna live in your new home long enough to recoup some of those initial buying costs.”

                                                                                          Eric Simonson

                                                                                           

                                                                                          Guest profile

                                                                                          Eric Simonson is the Founder and CEO of Abundo, a financial planning firm that teaches and empowers people to take action and own their financial lives. After working as a traditional advisor for over a decade, Eric saw a need to help people who couldn’t work with a traditional financial advisor since most require having a certain amount of money to invest with them first. He left his corporate job and launched a different model, one where he was only paid for giving honest advice that benefited his clients, not him. He built Abundo around a Flat Fee and Advice-Only Financial Planning model, eliminating all conflicts of interest without overcharging for professional advice and using proven low-cost investments. His firm now guides over 450 clients in all areas of their financial lives.

                                                                                          Worst investment ever

                                                                                          In 2020, during the early days of COVID-19, Eric and his wife sold their home and bought a condo because they wanted to live downtown. They sold the condo in 2023 and lost about 10% on that home purchase.

                                                                                          Lessons learned

                                                                                          • The condo market behaves differently than the single-family home market.
                                                                                          • Downtown markets behave differently than suburban markets.
                                                                                          • Not all real estate investments are made equal. Focus on location and build quality.
                                                                                          • Don’t expect to flip new builds into a profit immediately.
                                                                                          • Don’t bet on a recovery of a big macro event. It’s hard to guess what’s going to happen.
                                                                                          
                                                                                          

                                                                                          Andrew’s takeaways

                                                                                          • It’s challenging to sell secondhand condos.
                                                                                          
                                                                                          

                                                                                          Actionable advice

                                                                                          Ensure you’re confident you’ll live in your new home long enough to recoup some of those initial buying costs. Don’t spend more on a condo purchase than you’re comfortable spending. Understand the rules around the rentability—what happens if you want to get out of it? Can you rent it out?

                                                                                          Eric’s recommendations

                                                                                          Eric recommends checking out his company’s blog for fresh content and valuable resources.

                                                                                          No.1 goal for the next 12 months

                                                                                          Eric’s number one goal for the next 12 months is to create the best culture and team he can make. If he does that, the team will work hard and serve clients well.

                                                                                          Parting words

                                                                                           

                                                                                          “Thank you for having me, Andrew. I appreciate it.”

                                                                                          Eric Simonson

                                                                                           

                                                                                          [spp-transcript]

                                                                                           

                                                                                          Connect with Eric Simonson

                                                                                          • Linkedin
                                                                                          • Twitter
                                                                                          • Instagram
                                                                                          • Website
                                                                                          
                                                                                          

                                                                                          Andrew’s books

                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                          • My Worst Investment Ever
                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                          
                                                                                          

                                                                                          Andrew’s online programs

                                                                                          • Valuation Master Class
                                                                                          • The Become a Better Investor Community
                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                          • Finance Made Ridiculously Simple
                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                          • Achieve Your Goals
                                                                                          
                                                                                          

                                                                                          Connect with Andrew Stotz:

                                                                                          • astotz.com
                                                                                          • LinkedIn
                                                                                          • Facebook
                                                                                          • Instagram
                                                                                          • Threads
                                                                                          • Twitter
                                                                                          • YouTube
                                                                                          • My Worst Investment Ever Podcast
                                                                                          
                                                                                          ]]>BIO: Eric Simonson is the Founder and CEO of Abundo, a financial planning firm that teaches and empowers people to take action and own their financial lives.

                                                                                          STORY: In 2020, during the early days of COVID-19, Eric and his wife sold their home and bought a condo because they wanted to live downtown. They later sold the condo in 2023 and lost about 10% on that home purchase.

                                                                                          LEARNING: Not all real estate investments are made equal. Focus on location and build quality. Don’t expect to flip new builds into a profit immediately. Don’t bet on a recovery of a big macro event.

                                                                                           

                                                                                          “Make sure you’re confident you’re gonna live in your new home long enough to recoup some of those initial buying costs.”

                                                                                          Eric Simonson

                                                                                           

                                                                                          Guest profile

                                                                                          Eric Simonson is the Founder and CEO of Abundo, a financial planning firm that teaches and empowers people to take action and own their financial lives. After working as a traditional advisor for over a decade, Eric saw a need to help people who couldn’t work with a traditional financial advisor since most require having a certain amount of money to invest with them first. He left his corporate job and launched a different model, one where he was only paid for giving honest advice that benefited his clients, not him. He built Abundo around a Flat Fee and Advice-Only Financial Planning model, eliminating all conflicts of interest without overcharging for professional advice and using proven low-cost investments. His firm now guides over 450 clients in all areas of their financial lives.

                                                                                          Worst investment ever

                                                                                          In 2020, during the early days of COVID-19, Eric and his wife sold their home and bought a condo because they wanted to live downtown. They sold the condo in 2023 and lost about 10% on that home purchase.

                                                                                          Lessons learned

                                                                                          • The condo market behaves differently than the single-family home market.
                                                                                          • Downtown markets behave differently than suburban markets.
                                                                                          • Not all real estate investments are made equal. Focus on location and build quality.
                                                                                          • Don’t expect to flip new builds into a profit immediately.
                                                                                          • Don’t bet on a recovery of a big macro event. It’s hard to guess what’s going to happen.
                                                                                          
                                                                                          

                                                                                          Andrew’s takeaways

                                                                                          • It’s challenging to sell secondhand condos.
                                                                                          
                                                                                          

                                                                                          Actionable advice

                                                                                          Ensure you’re confident you’ll live in your new home long enough to recoup some of those initial buying costs. Don’t spend more on a condo purchase than you’re comfortable spending. Understand the rules around the rentability—what happens if you want to get out of it? Can you rent it out?

                                                                                          Eric’s recommendations

                                                                                          Eric recommends checking out his company’s blog for fresh content and valuable resources.

                                                                                          No.1 goal for the next 12 months

                                                                                          Eric’s number one goal for the next 12 months is to create the best culture and team he can make. If he does that, the team will work hard and serve clients well.

                                                                                          Parting words

                                                                                           

                                                                                          “Thank you for having me, Andrew. I appreciate it.”

                                                                                          Eric Simonson

                                                                                           

                                                                                          [spp-transcript]

                                                                                           

                                                                                          Connect with Eric Simonson

                                                                                          • Linkedin
                                                                                          • Twitter
                                                                                          • Instagram
                                                                                          • Website
                                                                                          
                                                                                          

                                                                                          Andrew’s books

                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                          • My Worst Investment Ever
                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                          
                                                                                          

                                                                                          Andrew’s online programs

                                                                                          • Valuation Master Class
                                                                                          • The Become a Better Investor Community
                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                          • Finance Made Ridiculously Simple
                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                          • Achieve Your Goals
                                                                                          
                                                                                          

                                                                                          Connect with Andrew Stotz:

                                                                                          • astotz.com
                                                                                          • LinkedIn
                                                                                          • Facebook
                                                                                          • Instagram
                                                                                          • Threads
                                                                                          • Twitter
                                                                                          • YouTube
                                                                                          • My Worst Investment Ever Podcast
                                                                                          
                                                                                          ]]>0f8511bb-df74-485a-8fa4-c3e0536efa26Tue, 19 Dec 2023 06:00:00 +070027:46falsefullKimberly Flynn - Don’t Put All Your Savings Into a Single IdeaBIO: Kimberly Flynn, CFA, is a founder and Managing Director of XA Investments, responsible for all product and business development activities.

                                                                                          STORY: Kimberly put all her $2,000 savings into a single telecom-dedicated mutual fund at the peak of telecom valuations and saw it go down to 30 cents on the dollar.

                                                                                          LEARNING: Don’t put all your savings into a single idea. Be diversified, especially when dealing with active manager selection. Know yourself and your risk tolerance.

                                                                                           

                                                                                          “You’ve got to feel comfortable making investment decisions, and if you’re not, get advice from somebody who can give you the right guidance.”

                                                                                          Kimberly Flynn

                                                                                           

                                                                                          Guest profile

                                                                                          Kimberly Flynn, CFA, is a founder and Managing Director of XA Investments, where she is responsible for all product and business development activities. XA Investments has a proprietary closed-end platform and a consulting practice to assist clients with developing US and UK-registered closed-end funds. Previously, Kim was Senior Vice President and Head of Product Development for Nuveen Investments’ Global Structured Products Group.

                                                                                          Kim received her MBA degree from Harvard University and her BBA in Finance and Business Economics, summa cum laude, from the University of Notre Dame in 1999. Kim earned the Chartered Financial Analyst (CFA) designation and is a member of the CFA Institute and CFA Society of Chicago.

                                                                                          Kim was recently selected to serve on the Notre Dame Wall Street leadership committee. She also serves as secretary of the Chicago Symphony Orchestra Women’s board executive committee and on the advisory board of Youth Guidance’s Becoming A Man program. She is an active member of the Harvard Club of New York City and the University Club of Chicago, where she serves on the Finance Committee.

                                                                                          Worst investment ever

                                                                                          Kimberly made a $2,000 investment into an Invesco telecom-dedicated mutual fund at the peak of telecom valuations. This was in 1999, and very quickly rode it down to 30 cents on the dollar. Kimberly was assured that the telecom sector would be hot based on the research she was doing at the time at Morgan Stanley. This was Kimberly’s first investment after graduating college.

                                                                                          Lessons learned

                                                                                          • Be diversified, especially when dealing with active manager selection.
                                                                                          • Know yourself and your risk tolerance.
                                                                                          • You’ve got to feel comfortable making investment decisions, and if you’re not, get advice from somebody who can give you the proper guidance.
                                                                                          
                                                                                          

                                                                                          Andrew’s takeaways

                                                                                          • Set a long-term plan and methodically contribute to it.
                                                                                          • Find your investment style and follow it.
                                                                                          
                                                                                          

                                                                                          Actionable advice

                                                                                          Take 80% of the amount you plan to invest and put it into a diversified portfolio. Then, take 20% of it and buy a telecom or crypto fund because experimentation is sometimes helpful. If you lose 20% of your investment, you can recover.

                                                                                          Kimberly’s recommendations

                                                                                          If you’re working in the financial space, Kimberly recommends checking out resources on her website, XA Investments, to learn more about alternatives. She also recommends reading The Economist or The Financial Times to gain a global perspective.

                                                                                          No.1 goal for the next 12 months

                                                                                          Kimberly’s number one goal for the next 12 months is to launch new products and take on new prospective consulting clients so she can grow her business.

                                                                                          Parting words

                                                                                           

                                                                                          “Stay positive. Even if you make a mistake, you can always start again and take on a new challenge or a new investment opportunity.”

                                                                                          Kimberly Flynn

                                                                                           

                                                                                          [spp-transcript]

                                                                                           

                                                                                          Connect with Kimberly Flynn

                                                                                          • Linkedin
                                                                                          • Twitter
                                                                                          • Website
                                                                                          
                                                                                          

                                                                                          Andrew’s books

                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                          • My Worst Investment Ever
                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                          
                                                                                          

                                                                                          Andrew’s online programs

                                                                                          • Valuation Master Class
                                                                                          • The Become a Better Investor Community
                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                          • Finance Made Ridiculously Simple
                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                          • Achieve Your Goals
                                                                                          
                                                                                          

                                                                                          Connect with Andrew Stotz:

                                                                                          • astotz.com
                                                                                          • LinkedIn
                                                                                          • Facebook
                                                                                          • Instagram
                                                                                          • Threads
                                                                                          • Twitter
                                                                                          • YouTube
                                                                                          • My Worst Investment Ever Podcast
                                                                                          
                                                                                          ]]>BIO: Kimberly Flynn, CFA, is a founder and Managing Director of XA Investments, responsible for all product and business development activities.

                                                                                          STORY: Kimberly put all her $2,000 savings into a single telecom-dedicated mutual fund at the peak of telecom valuations and saw it go down to 30 cents on the dollar.

                                                                                          LEARNING: Don’t put all your savings into a single idea. Be diversified, especially when dealing with active manager selection. Know yourself and your risk tolerance.

                                                                                           

                                                                                          “You’ve got to feel comfortable making investment decisions, and if you’re not, get advice from somebody who can give you the right guidance.”

                                                                                          Kimberly Flynn

                                                                                           

                                                                                          Guest profile

                                                                                          Kimberly Flynn, CFA, is a founder and Managing Director of XA Investments, where she is responsible for all product and business development activities. XA Investments has a proprietary closed-end platform and a consulting practice to assist clients with developing US and UK-registered closed-end funds. Previously, Kim was Senior Vice President and Head of Product Development for Nuveen Investments’ Global Structured Products Group.

                                                                                          Kim received her MBA degree from Harvard University and her BBA in Finance and Business Economics, summa cum laude, from the University of Notre Dame in 1999. Kim earned the Chartered Financial Analyst (CFA) designation and is a member of the CFA Institute and CFA Society of Chicago.

                                                                                          Kim was recently selected to serve on the Notre Dame Wall Street leadership committee. She also serves as secretary of the Chicago Symphony Orchestra Women’s board executive committee and on the advisory board of Youth Guidance’s Becoming A Man program. She is an active member of the Harvard Club of New York City and the University Club of Chicago, where she serves on the Finance Committee.

                                                                                          Worst investment ever

                                                                                          Kimberly made a $2,000 investment into an Invesco telecom-dedicated mutual fund at the peak of telecom valuations. This was in 1999, and very quickly rode it down to 30 cents on the dollar. Kimberly was assured that the telecom sector would be hot based on the research she was doing at the time at Morgan Stanley. This was Kimberly’s first investment after graduating college.

                                                                                          Lessons learned

                                                                                          • Be diversified, especially when dealing with active manager selection.
                                                                                          • Know yourself and your risk tolerance.
                                                                                          • You’ve got to feel comfortable making investment decisions, and if you’re not, get advice from somebody who can give you the proper guidance.
                                                                                          
                                                                                          

                                                                                          Andrew’s takeaways

                                                                                          • Set a long-term plan and methodically contribute to it.
                                                                                          • Find your investment style and follow it.
                                                                                          
                                                                                          

                                                                                          Actionable advice

                                                                                          Take 80% of the amount you plan to invest and put it into a diversified portfolio. Then, take 20% of it and buy a telecom or crypto fund because experimentation is sometimes helpful. If you lose 20% of your investment, you can recover.

                                                                                          Kimberly’s recommendations

                                                                                          If you’re working in the financial space, Kimberly recommends checking out resources on her website, XA Investments, to learn more about alternatives. She also recommends reading The Economist or The Financial Times to gain a global perspective.

                                                                                          No.1 goal for the next 12 months

                                                                                          Kimberly’s number one goal for the next 12 months is to launch new products and take on new prospective consulting clients so she can grow her business.

                                                                                          Parting words

                                                                                           

                                                                                          “Stay positive. Even if you make a mistake, you can always start again and take on a new challenge or a new investment opportunity.”

                                                                                          Kimberly Flynn

                                                                                           

                                                                                          [spp-transcript]

                                                                                           

                                                                                          Connect with Kimberly Flynn

                                                                                          • Linkedin
                                                                                          • Twitter
                                                                                          • Website
                                                                                          
                                                                                          

                                                                                          Andrew’s books

                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                          • My Worst Investment Ever
                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                          
                                                                                          

                                                                                          Andrew’s online programs

                                                                                          • Valuation Master Class
                                                                                          • The Become a Better Investor Community
                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                          • Finance Made Ridiculously Simple
                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                          • Achieve Your Goals
                                                                                          
                                                                                          

                                                                                          Connect with Andrew Stotz:

                                                                                          • astotz.com
                                                                                          • LinkedIn
                                                                                          • Facebook
                                                                                          • Instagram
                                                                                          • Threads
                                                                                          • Twitter
                                                                                          • YouTube
                                                                                          • My Worst Investment Ever Podcast
                                                                                          
                                                                                          ]]>46270f2c-0ed9-4d4e-bb23-96f45d817fa4Thu, 14 Dec 2023 06:00:00 +070035:53falsefullPeter Goldstein – Check Your Emotions at the DoorBIO: Peter Goldstein is a seasoned entrepreneur, capital markets expert, and investor with over 35 years of diverse international business experience.

                                                                                          STORY: He and four others put a significant amount of money into opening up this facility in Long Beach, California, where cannabis was in great demand just when it was being legalized for recreational purposes. At the time, there were no clear regulations, making compliance with the ever-changing rules costly to the point where the business was not making any profits.

                                                                                          LEARNING: Check your emotions at the door. Be cautious before you jump on a trend. Analyze and understand your risk. Get expert help if you don’t understand your investment.

                                                                                           

                                                                                          “Check your emotions at the door. Ego and greed don’t have interplay when making a sound investment.”

                                                                                          Peter Goldstein

                                                                                           

                                                                                          Guest profile

                                                                                          Peter Goldstein is a seasoned entrepreneur, capital markets expert, and investor with over 35 years of diverse international business experience. Throughout his career, he’s held pivotal roles, including CEO, chairman, investment banker, founder, board member, investor, and advisor to public, private, and emerging growth companies.

                                                                                          He founded Exchange Listing, LLC, dedicated to facilitating growth companies’ listings on esteemed exchanges like NASDAQ and the NYSE.

                                                                                          He also founded Emmis Capital, a specialized boutique fund investing in global small and microcap pre-IPO growth companies.

                                                                                          Worst investment ever

                                                                                          Peter was living in California when cannabis was being legalized for recreational purposes. He and four others put a significant amount of money into opening up this facility in Long Beach, California, where cannabis was in great demand. They went through all of the necessities to get the license to comply and build the facility, not realizing the complexities and challenges that would result in the worst investment Peter has ever made.

                                                                                          A few factors made Peter want to invest in a licensed facility that was going to manufacture and distribute recreational and medical cannabis products in the largest state in the US with the most history in the cannabis sector. One, there was a crowd and a popular trend for cannabis. Two, an emotional component of greed made him believe he could make an exponential return on his investment. Unfortunately, Peter didn’t think about the risk component, nor did he think about getting expert advice to guide him through understanding the industry and how to manage risk.

                                                                                          Another thing that affected their business was that they were one of the first movers. And so, as they were learning, so were the regulators, and every time they learned something new or something changed, the business owners had to react to that. Also, there was not yet a proven market. There was a grey market, and there was certainly a black market. But there wasn’t a compliant market where it was understood what the accurate margins would be. Of course, there was significant demand. But after deducting all of the production costs, regulatory taxes, and distribution, the margins were slim to none.

                                                                                          Lessons learned

                                                                                          • Check your emotions at the door. Ego and greed don’t have an interplay when making a sound investment.
                                                                                          • Be cautious before you jump on a trend. Don’t follow the crowd mindlessly just because everyone’s going in that direction.
                                                                                          • Analyze and understand your risk.
                                                                                          • Get expert help if you don’t understand your investment.
                                                                                          • Don’t believe your own thoughts about how unique your product or service is. Pressure tests ensure that what you think is received by the market is true.
                                                                                          
                                                                                          

                                                                                          Andrew’s takeaways

                                                                                          • If you’re starting a business, know that you and your business will be a commodity. The only way to get out of that is by thinking about strategy, positioning, how you will enter this industry, what will be different about you, and having the discipline to follow that strategy.
                                                                                          
                                                                                          

                                                                                          Actionable advice

                                                                                          Don’t believe the hype.

                                                                                          Peter’s recommendation

                                                                                          Peter recommends his new book, The Entrepreneur’s IPO: The Insider’s Roadmap to Taking Your Company Public, for any entrepreneur wanting to understand the IPO process. There are 12 chapters in the book. Each chapter features two industry professionals from NASDAQ, the New York Stock Exchange, the London Stock Exchange, etc., giving practical advice to fill a knowledge gap for entrepreneurs considering taking their companies public.

                                                                                          No.1 goal for the next 12 months

                                                                                          Peter’s number one goal for the next 12 months is to build a global community of entrepreneurs who want to learn and understand investing in micro and small-cap companies.

                                                                                          Parting words

                                                                                           

                                                                                          “It’s been a pleasure. Good luck, everyone. Stay smart and stay safe.”

                                                                                          Peter Goldstein

                                                                                           

                                                                                          [spp-transcript]

                                                                                           

                                                                                          Connect with Peter Goldstein

                                                                                          • LinkedIn
                                                                                          • Twitter
                                                                                          
                                                                                          

                                                                                          Andrew’s books

                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                          • My Worst Investment Ever
                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                          
                                                                                          

                                                                                          Andrew’s online programs

                                                                                          • Valuation Master Class
                                                                                          • The Become a Better Investor Community
                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                          • Finance Made Ridiculously Simple
                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                          • Achieve Your Goals
                                                                                          
                                                                                          

                                                                                          Connect with Andrew Stotz:

                                                                                          • astotz.com
                                                                                          • LinkedIn
                                                                                          • Facebook
                                                                                          • Instagram
                                                                                          • Threads
                                                                                          • Twitter
                                                                                          • YouTube
                                                                                          • My Worst Investment Ever Podcast
                                                                                          
                                                                                          ]]>BIO: Peter Goldstein is a seasoned entrepreneur, capital markets expert, and investor with over 35 years of diverse international business experience.

                                                                                          STORY: He and four others put a significant amount of money into opening up this facility in Long Beach, California, where cannabis was in great demand just when it was being legalized for recreational purposes. At the time, there were no clear regulations, making compliance with the ever-changing rules costly to the point where the business was not making any profits.

                                                                                          LEARNING: Check your emotions at the door. Be cautious before you jump on a trend. Analyze and understand your risk. Get expert help if you don’t understand your investment.

                                                                                           

                                                                                          “Check your emotions at the door. Ego and greed don’t have interplay when making a sound investment.”

                                                                                          Peter Goldstein

                                                                                           

                                                                                          Guest profile

                                                                                          Peter Goldstein is a seasoned entrepreneur, capital markets expert, and investor with over 35 years of diverse international business experience. Throughout his career, he’s held pivotal roles, including CEO, chairman, investment banker, founder, board member, investor, and advisor to public, private, and emerging growth companies.

                                                                                          He founded Exchange Listing, LLC, dedicated to facilitating growth companies’ listings on esteemed exchanges like NASDAQ and the NYSE.

                                                                                          He also founded Emmis Capital, a specialized boutique fund investing in global small and microcap pre-IPO growth companies.

                                                                                          Worst investment ever

                                                                                          Peter was living in California when cannabis was being legalized for recreational purposes. He and four others put a significant amount of money into opening up this facility in Long Beach, California, where cannabis was in great demand. They went through all of the necessities to get the license to comply and build the facility, not realizing the complexities and challenges that would result in the worst investment Peter has ever made.

                                                                                          A few factors made Peter want to invest in a licensed facility that was going to manufacture and distribute recreational and medical cannabis products in the largest state in the US with the most history in the cannabis sector. One, there was a crowd and a popular trend for cannabis. Two, an emotional component of greed made him believe he could make an exponential return on his investment. Unfortunately, Peter didn’t think about the risk component, nor did he think about getting expert advice to guide him through understanding the industry and how to manage risk.

                                                                                          Another thing that affected their business was that they were one of the first movers. And so, as they were learning, so were the regulators, and every time they learned something new or something changed, the business owners had to react to that. Also, there was not yet a proven market. There was a grey market, and there was certainly a black market. But there wasn’t a compliant market where it was understood what the accurate margins would be. Of course, there was significant demand. But after deducting all of the production costs, regulatory taxes, and distribution, the margins were slim to none.

                                                                                          Lessons learned

                                                                                          • Check your emotions at the door. Ego and greed don’t have an interplay when making a sound investment.
                                                                                          • Be cautious before you jump on a trend. Don’t follow the crowd mindlessly just because everyone’s going in that direction.
                                                                                          • Analyze and understand your risk.
                                                                                          • Get expert help if you don’t understand your investment.
                                                                                          • Don’t believe your own thoughts about how unique your product or service is. Pressure tests ensure that what you think is received by the market is true.
                                                                                          
                                                                                          

                                                                                          Andrew’s takeaways

                                                                                          • If you’re starting a business, know that you and your business will be a commodity. The only way to get out of that is by thinking about strategy, positioning, how you will enter this industry, what will be different about you, and having the discipline to follow that strategy.
                                                                                          
                                                                                          

                                                                                          Actionable advice

                                                                                          Don’t believe the hype.

                                                                                          Peter’s recommendation

                                                                                          Peter recommends his new book, The Entrepreneur’s IPO: The Insider’s Roadmap to Taking Your Company Public, for any entrepreneur wanting to understand the IPO process. There are 12 chapters in the book. Each chapter features two industry professionals from NASDAQ, the New York Stock Exchange, the London Stock Exchange, etc., giving practical advice to fill a knowledge gap for entrepreneurs considering taking their companies public.

                                                                                          No.1 goal for the next 12 months

                                                                                          Peter’s number one goal for the next 12 months is to build a global community of entrepreneurs who want to learn and understand investing in micro and small-cap companies.

                                                                                          Parting words

                                                                                           

                                                                                          “It’s been a pleasure. Good luck, everyone. Stay smart and stay safe.”

                                                                                          Peter Goldstein

                                                                                           

                                                                                          [spp-transcript]

                                                                                           

                                                                                          Connect with Peter Goldstein

                                                                                          • LinkedIn
                                                                                          • Twitter
                                                                                          
                                                                                          

                                                                                          Andrew’s books

                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                          • My Worst Investment Ever
                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                          
                                                                                          

                                                                                          Andrew’s online programs

                                                                                          • Valuation Master Class
                                                                                          • The Become a Better Investor Community
                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                          • Finance Made Ridiculously Simple
                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                          • Achieve Your Goals
                                                                                          
                                                                                          

                                                                                          Connect with Andrew Stotz:

                                                                                          • astotz.com
                                                                                          • LinkedIn
                                                                                          • Facebook
                                                                                          • Instagram
                                                                                          • Threads
                                                                                          • Twitter
                                                                                          • YouTube
                                                                                          • My Worst Investment Ever Podcast
                                                                                          
                                                                                          ]]>ecc0663f-f3f8-4c85-9745-8aa95b07b4beTue, 12 Dec 2023 06:00:00 +070032:36falsefullISMS 37: Larry Swedroe – Pay Attention to a Fund’s Proper Benchmarks and TaxesIn this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Today, they discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this fourteenth series, they discuss mistake number 26: Do You Fail to Compare Your Funds to Proper Benchmarks? And mistake 27: Do You Focus On Pretax Returns?

                                                                                          LEARNING: Always run a regression analysis against an asset pricing model on portfoliovisualizer.com. Actively managed funds have higher tax expenses than ETFs and mutual funds.

                                                                                           

                                                                                          “If you want to see if an active manager is truly outperforming and their appropriate risk-adjusted benchmark, run a regression analysis against an asset pricing model on portfoliovisualizer.com.”

                                                                                          Larry Swedroe

                                                                                           

                                                                                          In this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Larry is the head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                                          Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this fourteenth series, they discuss mistake number 26: Do You Fail to Compare Your Funds to Proper Benchmarks? And mistake 27: Do You Focus On Pretax Returns?

                                                                                          Did you miss out on previous mistakes? Check them out:

                                                                                          • ISMS 8: Larry Swedroe – Are You Overconfident in Your Skills?
                                                                                          • ISMS 17: Larry Swedroe – Do You Project Recent Trends Indefinitely Into the Future?
                                                                                          • ISMS 20: Larry Swedroe – Do You Extrapolate From Small Samples and Trust Your Intuition?
                                                                                          • ISMS 23: Larry Swedroe – Do You Allow Yourself to Be Influenced by Your Ego and Herd Mentality?
                                                                                          • ISMS 24: Larry Swedroe – Confusing Skill and Luck Can Stop You From Investing Wisely
                                                                                          • ISMS 25: Larry Swedroe – Admit Your Mistakes and Don’t Listen to Fake Experts
                                                                                          • ISMS 26: Larry Swedroe – Are You Subject to the Endowment Effect or the Hot Streak Fallacy?
                                                                                          • ISMS 27: Larry Swedroe – Familiar Doesn’t Make It Safe and You’re Not Playing With the House’s Money
                                                                                          • ISMS 29: Larry Swedroe – The Shiny Apple is Poisonous and Information is Not Knowledge
                                                                                          • ISMS 30: Larry Swedroe – Do You Believe Your Fortune Is in the Stars or Rely on Misleading Information?
                                                                                          • ISMS 34: Larry Swedroe – Consider All Hidden Costs Before You Invest
                                                                                          • ISMS 35: Larry Swedroe – Great Companies Are Not Always High-Return Investments
                                                                                          • ISMS 36: Larry Swedroe – Two Heads Are Not Better Than One When Investing
                                                                                          
                                                                                          

                                                                                          Mistake number 26: Do You Fail to Compare Your Funds to Proper Benchmarks?

                                                                                          In Larry’s opinion, mutual funds lie about their performance or bend the facts to suit their needs. The SEC requires mutual funds to define their category, but it doesn’t tell them what is the proper benchmark. So, the mutual fund can choose a benchmark that is easier to beat than a more appropriate benchmark to make it look good. A classic example is that all small-cap funds almost always benchmark themselves against the Russell 2000, a small-cap index. However, the Russell 2000 is not a small-cap stock index. The Russell 1000 is the largest 1000 of the largest 3000. The Russell 2000 is the next smallest 2000 stock of the largest 3000.

                                                                                          Small-cap funds should be compared to a small-cap index, and large-cap funds should be compared to a large-cap index. The same is true about value and growth funds. Mark Carhart’s classic study of the mutual fund industry determined that once you accounted for style factors (small cap versus large cap and value versus growth), the average actively managed fund underperformed its benchmark on a pretax basis by 1.8% per year. For the 5-, 10-, and 15-year periods ending in 2000, only 16%, 16%, and 17% of actively managed funds outperformed the Wilshire 5000.

                                                                                          To avoid making this type of mistake, Larry says you should compare the performance of an actively managed fund against its appropriate passive benchmark. If you want to see if an active manager is outperforming and their risk-adjusted benchmark is suitable, run a regression analysis against an asset pricing model on portfoliovisualizer.com.

                                                                                          Mistake number 27: Do You Focus On Pretax Returns?

                                                                                          According to Larry, active managers, on average, are smart and generate gross alpha. The problem is that their costs far exceed their ability to generate alpha. One of the oldest studies found the average stock-picking fund added value with their picks by about 0.8%. But their expense ratio was about 0.8%. The trading costs were 0.7%. Also, the cost of holding cash adds up, so they underperform by over 1% yearly. So investors, even though they may have identified a manager with stock picking skills, will underperform appropriate benchmarks anyway. But the sad part is that taxes for the average taxable investor are often the most significant expense they face.

                                                                                          Robert Jeffrey and Robert Arnott showed the impact of taxes on returns in their study of 71 actively managed funds for the 10 years 1982-91. They found that while 15 of the 71 funds beat a passively managed fund on a pretax basis, only five did so on an after-tax basis.

                                                                                          Larry says that individual investors are beginning to awaken to the critical role that fund distributions play in after-tax performance. This has been one of the driving forces behind the rapid growth of ETFs index and other passively managed funds.

                                                                                          About Larry Swedroe

                                                                                          Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                                          Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                                          Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                                          Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and In this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Today, they discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this fourteenth series, they discuss mistake number 26: Do You Fail to Compare Your Funds to Proper Benchmarks? And mistake 27: Do You Focus On Pretax Returns?

                                                                                          LEARNING: Always run a regression analysis against an asset pricing model on portfoliovisualizer.com. Actively managed funds have higher tax expenses than ETFs and mutual funds.

                                                                                           

                                                                                          “If you want to see if an active manager is truly outperforming and their appropriate risk-adjusted benchmark, run a regression analysis against an asset pricing model on portfoliovisualizer.com.”

                                                                                          Larry Swedroe

                                                                                           

                                                                                          In this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Larry is the head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                                          Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this fourteenth series, they discuss mistake number 26: Do You Fail to Compare Your Funds to Proper Benchmarks? And mistake 27: Do You Focus On Pretax Returns?

                                                                                          Did you miss out on previous mistakes? Check them out:

                                                                                          • ISMS 8: Larry Swedroe – Are You Overconfident in Your Skills?
                                                                                          • ISMS 17: Larry Swedroe – Do You Project Recent Trends Indefinitely Into the Future?
                                                                                          • ISMS 20: Larry Swedroe – Do You Extrapolate From Small Samples and Trust Your Intuition?
                                                                                          • ISMS 23: Larry Swedroe – Do You Allow Yourself to Be Influenced by Your Ego and Herd Mentality?
                                                                                          • ISMS 24: Larry Swedroe – Confusing Skill and Luck Can Stop You From Investing Wisely
                                                                                          • ISMS 25: Larry Swedroe – Admit Your Mistakes and Don’t Listen to Fake Experts
                                                                                          • ISMS 26: Larry Swedroe – Are You Subject to the Endowment Effect or the Hot Streak Fallacy?
                                                                                          • ISMS 27: Larry Swedroe – Familiar Doesn’t Make It Safe and You’re Not Playing With the House’s Money
                                                                                          • ISMS 29: Larry Swedroe – The Shiny Apple is Poisonous and Information is Not Knowledge
                                                                                          • ISMS 30: Larry Swedroe – Do You Believe Your Fortune Is in the Stars or Rely on Misleading Information?
                                                                                          • ISMS 34: Larry Swedroe – Consider All Hidden Costs Before You Invest
                                                                                          • ISMS 35: Larry Swedroe – Great Companies Are Not Always High-Return Investments
                                                                                          • ISMS 36: Larry Swedroe – Two Heads Are Not Better Than One When Investing
                                                                                          
                                                                                          

                                                                                          Mistake number 26: Do You Fail to Compare Your Funds to Proper Benchmarks?

                                                                                          In Larry’s opinion, mutual funds lie about their performance or bend the facts to suit their needs. The SEC requires mutual funds to define their category, but it doesn’t tell them what is the proper benchmark. So, the mutual fund can choose a benchmark that is easier to beat than a more appropriate benchmark to make it look good. A classic example is that all small-cap funds almost always benchmark themselves against the Russell 2000, a small-cap index. However, the Russell 2000 is not a small-cap stock index. The Russell 1000 is the largest 1000 of the largest 3000. The Russell 2000 is the next smallest 2000 stock of the largest 3000.

                                                                                          Small-cap funds should be compared to a small-cap index, and large-cap funds should be compared to a large-cap index. The same is true about value and growth funds. Mark Carhart’s classic study of the mutual fund industry determined that once you accounted for style factors (small cap versus large cap and value versus growth), the average actively managed fund underperformed its benchmark on a pretax basis by 1.8% per year. For the 5-, 10-, and 15-year periods ending in 2000, only 16%, 16%, and 17% of actively managed funds outperformed the Wilshire 5000.

                                                                                          To avoid making this type of mistake, Larry says you should compare the performance of an actively managed fund against its appropriate passive benchmark. If you want to see if an active manager is outperforming and their risk-adjusted benchmark is suitable, run a regression analysis against an asset pricing model on portfoliovisualizer.com.

                                                                                          Mistake number 27: Do You Focus On Pretax Returns?

                                                                                          According to Larry, active managers, on average, are smart and generate gross alpha. The problem is that their costs far exceed their ability to generate alpha. One of the oldest studies found the average stock-picking fund added value with their picks by about 0.8%. But their expense ratio was about 0.8%. The trading costs were 0.7%. Also, the cost of holding cash adds up, so they underperform by over 1% yearly. So investors, even though they may have identified a manager with stock picking skills, will underperform appropriate benchmarks anyway. But the sad part is that taxes for the average taxable investor are often the most significant expense they face.

                                                                                          Robert Jeffrey and Robert Arnott showed the impact of taxes on returns in their study of 71 actively managed funds for the 10 years 1982-91. They found that while 15 of the 71 funds beat a passively managed fund on a pretax basis, only five did so on an after-tax basis.

                                                                                          Larry says that individual investors are beginning to awaken to the critical role that fund distributions play in after-tax performance. This has been one of the driving forces behind the rapid growth of ETFs index and other passively managed funds.

                                                                                          About Larry Swedroe

                                                                                          Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                                          Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                                          Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                                          Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                                           

                                                                                          [spp-transcript]

                                                                                           

                                                                                          Connect with Larry Swedroe

                                                                                          • LinkedIn
                                                                                          • Twitter
                                                                                          • Website
                                                                                          • Books
                                                                                          
                                                                                          

                                                                                          Andrew’s books

                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                          • My Worst Investment Ever
                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                          
                                                                                          

                                                                                          Andrew’s online programs

                                                                                          • Valuation Master Class
                                                                                          • The Become a Better Investor Community
                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                          • Finance Made Ridiculously Simple
                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                          • Achieve Your Goals
                                                                                          
                                                                                          

                                                                                          Connect with Andrew Stotz:

                                                                                          • astotz.com
                                                                                          • LinkedIn
                                                                                          • Facebook
                                                                                          • Instagram
                                                                                          • Twitter
                                                                                          • YouTube
                                                                                          • My Worst Investment Ever Podcast
                                                                                          
                                                                                          

                                                                                          Further reading mentioned

                                                                                          • Larry Swedroe and RC Balaban, Investment Mistakes Even Smart Investors Make and How to Avoid Them
                                                                                          • Philip E. Tetlock, Expert Political Judgment: How Good Is It? How Can We Know?
                                                                                          • Gary Belsky and Thomas Gilovich, Why Smart People Make Big Money Mistakes and How to Correct Them: Lessons from the Life-Changing Science of Behavioral Economics
                                                                                          • Larry Swedroe, Think, Act, and Invest Like Warren Buffett: The Winning Strategy to Help You Achieve Your Financial and Life Goals
                                                                                          
                                                                                          ]]>b3bc87e4-407b-40b8-85e8-d74d4386a3d3Thu, 07 Dec 2023 06:00:00 +070040:01falsefullJitipol Puksamatanan – Let Time Be Your FriendBIO: Dr. Jitipol Puksamatanan heads macro and wealth research at CGS-CIMB Securities (Thailand). He develops actionable investment ideas, independent economic analysis, and asset allocation strategies.

                                                                                          STORY: Jitipol learned as much as he could about a stock he was interested in. He was very confident in this stock. So much so that even when the stock price fell, and he made a loss, he doubled his investment, believing the price would go up, but it never did. Jitipol lost all his savings in this investment.

                                                                                          LEARNING: Investing is about knowing yourself and what you’re doing. Investing is not gambling; don’t expect overnight success.

                                                                                           

                                                                                          “Investing is not a timed sport with a predetermined end time. If you’re seeking financial freedom, invest in the long-term and let time be your friend.”

                                                                                          Jitipol Puksamatanan

                                                                                           

                                                                                          Guest profile

                                                                                          Dr. Jitipol Puksamatanan heads macro and wealth research at CGS-CIMB Securities (Thailand). He develops actionable investment ideas, independent economic analysis, and asset allocation strategies.

                                                                                          Over the course of two decades, Dr. Jitipol has worked with securities, banks, and asset management companies.

                                                                                          Worst investment ever

                                                                                          Jitipol learned as much as he could about a stock he was interested in. He knew the company’s CEO and the management team; he knew what they were doing and how they did business. Jitipol was very confident in this stock. So much so that even when the stock price fell, and he made a loss, he doubled his investment, believing the price would go up, but it never did. Jitipol lost all his savings in this investment.

                                                                                          Lessons learned

                                                                                          • Investing is about knowing yourself and what you’re doing.
                                                                                          • Investing is not gambling; don’t expect overnight success.
                                                                                          
                                                                                          

                                                                                          Andrew’s takeaways

                                                                                          • Trying to win back your losses is a dangerous game. It’s better to take a break, leave it, and let your mind and emotions get back on track.
                                                                                          • Before investing after a loss, ask yourself the best investment for this money.
                                                                                          
                                                                                          

                                                                                          Actionable advice

                                                                                          Investing is not a timed sport with a predetermined end time. If you’re seeking financial freedom, invest in the long term and let time be your friend.

                                                                                          Jitipol’s recommendations

                                                                                          Jitipol recommends listening to investment podcasts for new ideas and to gain knowledge.

                                                                                          No.1 goal for the next 12 months

                                                                                          Jitipol’s number one goal for the next 12 months is to expand his community and build deeper relationships.

                                                                                          Parting words

                                                                                           

                                                                                          “Good luck, happy investing, and remember to make friends.”

                                                                                          Jitipol Puksmatanan

                                                                                           

                                                                                          [spp-transcript]

                                                                                           

                                                                                          Connect with Jitipol Puksamatanan

                                                                                          • LinkedIn
                                                                                          • Twitter
                                                                                          • Facebook
                                                                                          • Website
                                                                                          
                                                                                          

                                                                                          Andrew’s books

                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                          • My Worst Investment Ever
                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                          
                                                                                          

                                                                                          Andrew’s online programs

                                                                                          • Valuation Master Class
                                                                                          • The Become a Better Investor Community
                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                          • Finance Made Ridiculously Simple
                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                          • Achieve Your Goals
                                                                                          
                                                                                          

                                                                                          Connect with Andrew Stotz:

                                                                                          • astotz.com
                                                                                          • LinkedIn
                                                                                          • Facebook
                                                                                          • Instagram
                                                                                          • Threads
                                                                                          • Twitter
                                                                                          • YouTube
                                                                                          • My Worst Investment Ever Podcast
                                                                                          
                                                                                          ]]>BIO: Dr. Jitipol Puksamatanan heads macro and wealth research at CGS-CIMB Securities (Thailand). He develops actionable investment ideas, independent economic analysis, and asset allocation strategies.

                                                                                          STORY: Jitipol learned as much as he could about a stock he was interested in. He was very confident in this stock. So much so that even when the stock price fell, and he made a loss, he doubled his investment, believing the price would go up, but it never did. Jitipol lost all his savings in this investment.

                                                                                          LEARNING: Investing is about knowing yourself and what you’re doing. Investing is not gambling; don’t expect overnight success.

                                                                                           

                                                                                          “Investing is not a timed sport with a predetermined end time. If you’re seeking financial freedom, invest in the long-term and let time be your friend.”

                                                                                          Jitipol Puksamatanan

                                                                                           

                                                                                          Guest profile

                                                                                          Dr. Jitipol Puksamatanan heads macro and wealth research at CGS-CIMB Securities (Thailand). He develops actionable investment ideas, independent economic analysis, and asset allocation strategies.

                                                                                          Over the course of two decades, Dr. Jitipol has worked with securities, banks, and asset management companies.

                                                                                          Worst investment ever

                                                                                          Jitipol learned as much as he could about a stock he was interested in. He knew the company’s CEO and the management team; he knew what they were doing and how they did business. Jitipol was very confident in this stock. So much so that even when the stock price fell, and he made a loss, he doubled his investment, believing the price would go up, but it never did. Jitipol lost all his savings in this investment.

                                                                                          Lessons learned

                                                                                          • Investing is about knowing yourself and what you’re doing.
                                                                                          • Investing is not gambling; don’t expect overnight success.
                                                                                          
                                                                                          

                                                                                          Andrew’s takeaways

                                                                                          • Trying to win back your losses is a dangerous game. It’s better to take a break, leave it, and let your mind and emotions get back on track.
                                                                                          • Before investing after a loss, ask yourself the best investment for this money.
                                                                                          
                                                                                          

                                                                                          Actionable advice

                                                                                          Investing is not a timed sport with a predetermined end time. If you’re seeking financial freedom, invest in the long term and let time be your friend.

                                                                                          Jitipol’s recommendations

                                                                                          Jitipol recommends listening to investment podcasts for new ideas and to gain knowledge.

                                                                                          No.1 goal for the next 12 months

                                                                                          Jitipol’s number one goal for the next 12 months is to expand his community and build deeper relationships.

                                                                                          Parting words

                                                                                           

                                                                                          “Good luck, happy investing, and remember to make friends.”

                                                                                          Jitipol Puksmatanan

                                                                                           

                                                                                          [spp-transcript]

                                                                                           

                                                                                          Connect with Jitipol Puksamatanan

                                                                                          • LinkedIn
                                                                                          • Twitter
                                                                                          • Facebook
                                                                                          • Website
                                                                                          
                                                                                          

                                                                                          Andrew’s books

                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                          • My Worst Investment Ever
                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                          
                                                                                          

                                                                                          Andrew’s online programs

                                                                                          • Valuation Master Class
                                                                                          • The Become a Better Investor Community
                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                          • Finance Made Ridiculously Simple
                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                          • Achieve Your Goals
                                                                                          
                                                                                          

                                                                                          Connect with Andrew Stotz:

                                                                                          • astotz.com
                                                                                          • LinkedIn
                                                                                          • Facebook
                                                                                          • Instagram
                                                                                          • Threads
                                                                                          • Twitter
                                                                                          • YouTube
                                                                                          • My Worst Investment Ever Podcast
                                                                                          
                                                                                          ]]>dfd8eff0-40ed-4926-a252-bd2eea1107e0Wed, 06 Dec 2023 06:00:00 +070026:23falsefullAnatoliy Labinskiy – Double-Check How Your Product Looks and WorksBIO: Anatoliy Labinskiy is an entrepreneur, eCommerce expert, and a holder of 4-time Two Comma Club awards. He is the founder of GSM Growth, an agency that helps e-commerce entrepreneurs achieve a new level of growth in their businesses.

                                                                                          STORY: When Anatoliy and his partner decided to scale their e-commerce shoe business, they paid a supplier in China $250,000 upfront and let him handle everything. The supplier sent customers low-quality shoes and eventually stopped shipping products despite having large orders. The partners had to refund customers and lost all the money they’d paid the supplier.

                                                                                          LEARNING: Double-check with your supplier how the product looks and works before scaling your sales. Think about how you’ll control your inventory once you scale your sales. Start slow.

                                                                                           

                                                                                          “When you start scaling your business, even when you start just seeing a couple of sales here and there, ask your supplier to send you pictures and videos of the product in the warehouse.”

                                                                                          Anatoliy Labinskiy

                                                                                           

                                                                                          Guest profile

                                                                                          Anatoliy Labinskiy is an entrepreneur, eCommerce expert, and a holder of 4-time Two Comma Club awards. He is the founder of GSM Growth, an agency that helps e-commerce entrepreneurs achieve a new level of growth in their businesses. He is also a co-founder of EcomScout.io, an AI-powered service that tracks all loss events in advertising campaigns, providing real-time data and insights for informed decision-making and optimized ad spending.

                                                                                          In addition to his entrepreneurial pursuits, Anatoliy hosts the highly acclaimed Ecom Business Stream Podcast. The podcast showcases real-life stories from successful entrepreneurs, executives, investors, and thought leaders, offering a glimpse into their journeys to success in the business world.

                                                                                          Recognized for his outstanding achievements, Anatoliy Labinskiy is a member of the Forbes Business Council. He also proudly holds a place among the Top 100 USA Entrepreneurs with Ukrainian Origins, underscoring his influence and impact in the dynamic realm of e-commerce.

                                                                                          As an international speaker, Anatoliy shares his knowledge and expertise with audiences worldwide, further establishing himself as a leading figure in the e-commerce landscape.

                                                                                          Worst investment ever

                                                                                          In 2019, Anatoliy and his partner decided to scale their e-commerce business. At the time, they were selling leather shoes. They pumped in $250,000 to pay the supplier for inventory and to ship to customers instantly. They had worked with this supplier for a couple of months, so they let him handle everything. The partners had never seen the shoes they were selling in real life. They had only seen the pictures provided by the supplier.

                                                                                          Then, customers started sending emails complaining about the quality of the shoes. They thought it was just the usual case of a few unhappy customers and didn’t take it seriously until one customer insisted on sending back the shoes she had received so that the partners could see what they were selling. The shoes were sent to Anatoliy’s partner, who was in Minnesota. When the shoes arrived and the partner opened the box, it was unbelievable. The shoes had the smell of some toxic material. The shoes were plastic and wrapped in a garbage bag. The partners couldn’t believe what they were seeing. They couldn’t believe they had paid $250,000 for such crap.

                                                                                          They contacted the supplier, who assured them he would ship the correct product. Two weeks after this conversation, the partners started receiving customer emails complaining that they hadn’t received their orders. On checking the tracking numbers, they realized that they were fake.

                                                                                          So many people asked for chargebacks, causing PayPal and Stripe to hold all payments the customers had made. Anatoliy and his partner had to dip into their pockets to refund the customers. They never got the money that was put on hold.

                                                                                          Lessons learned

                                                                                          • Double-check how the product looks and works with your supplier before scaling your sales.
                                                                                          • Think about how you’ll control your inventory once you scale your sales.
                                                                                          • You need cash flow and remain liquid for your business to stay afloat.
                                                                                          
                                                                                          

                                                                                          Andrew’s takeaways

                                                                                          • Start slow.
                                                                                          
                                                                                          

                                                                                          Anatoliy’s recommendation

                                                                                          Anatoliy recommends checking out his website for tips and tricks on running your e-commerce store and resources for writing ad copy that converts.

                                                                                          No.1 goal for the next 12 months

                                                                                          Anatoliy’s number one goal for the next 12 months is to get better quality customers for his agency and make it bigger in terms of results.

                                                                                          Parting words

                                                                                           

                                                                                          “Look at your failures as lessons, and they won’t be failures anymore.”

                                                                                          Anatoliy Labinskiy

                                                                                           

                                                                                          [spp-transcript]

                                                                                           

                                                                                          Connect with Anatoliy Labinskiy

                                                                                          • LinkedIn
                                                                                          • Twitter
                                                                                          • Instagram
                                                                                          • Facebook
                                                                                          • YouTube
                                                                                          • Podcast
                                                                                          • Website
                                                                                          
                                                                                          

                                                                                          Andrew’s books

                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                          • My Worst Investment Ever
                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                          
                                                                                          

                                                                                          Andrew’s online programs

                                                                                          • Valuation Master Class
                                                                                          • The Become a Better Investor Community
                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                          • Finance Made Ridiculously Simple
                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                          • Achieve Your Goals
                                                                                          
                                                                                          

                                                                                          Connect with Andrew Stotz:

                                                                                          • astotz.com
                                                                                          • LinkedIn
                                                                                          • Facebook
                                                                                          • Instagram
                                                                                          • Threads
                                                                                          • Twitter
                                                                                          • YouTube
                                                                                          • My Worst Investment Ever Podcast
                                                                                          
                                                                                          ]]>BIO: Anatoliy Labinskiy is an entrepreneur, eCommerce expert, and a holder of 4-time Two Comma Club awards. He is the founder of GSM Growth, an agency that helps e-commerce entrepreneurs achieve a new level of growth in their businesses.

                                                                                          STORY: When Anatoliy and his partner decided to scale their e-commerce shoe business, they paid a supplier in China $250,000 upfront and let him handle everything. The supplier sent customers low-quality shoes and eventually stopped shipping products despite having large orders. The partners had to refund customers and lost all the money they’d paid the supplier.

                                                                                          LEARNING: Double-check with your supplier how the product looks and works before scaling your sales. Think about how you’ll control your inventory once you scale your sales. Start slow.

                                                                                           

                                                                                          “When you start scaling your business, even when you start just seeing a couple of sales here and there, ask your supplier to send you pictures and videos of the product in the warehouse.”

                                                                                          Anatoliy Labinskiy

                                                                                           

                                                                                          Guest profile

                                                                                          Anatoliy Labinskiy is an entrepreneur, eCommerce expert, and a holder of 4-time Two Comma Club awards. He is the founder of GSM Growth, an agency that helps e-commerce entrepreneurs achieve a new level of growth in their businesses. He is also a co-founder of EcomScout.io, an AI-powered service that tracks all loss events in advertising campaigns, providing real-time data and insights for informed decision-making and optimized ad spending.

                                                                                          In addition to his entrepreneurial pursuits, Anatoliy hosts the highly acclaimed Ecom Business Stream Podcast. The podcast showcases real-life stories from successful entrepreneurs, executives, investors, and thought leaders, offering a glimpse into their journeys to success in the business world.

                                                                                          Recognized for his outstanding achievements, Anatoliy Labinskiy is a member of the Forbes Business Council. He also proudly holds a place among the Top 100 USA Entrepreneurs with Ukrainian Origins, underscoring his influence and impact in the dynamic realm of e-commerce.

                                                                                          As an international speaker, Anatoliy shares his knowledge and expertise with audiences worldwide, further establishing himself as a leading figure in the e-commerce landscape.

                                                                                          Worst investment ever

                                                                                          In 2019, Anatoliy and his partner decided to scale their e-commerce business. At the time, they were selling leather shoes. They pumped in $250,000 to pay the supplier for inventory and to ship to customers instantly. They had worked with this supplier for a couple of months, so they let him handle everything. The partners had never seen the shoes they were selling in real life. They had only seen the pictures provided by the supplier.

                                                                                          Then, customers started sending emails complaining about the quality of the shoes. They thought it was just the usual case of a few unhappy customers and didn’t take it seriously until one customer insisted on sending back the shoes she had received so that the partners could see what they were selling. The shoes were sent to Anatoliy’s partner, who was in Minnesota. When the shoes arrived and the partner opened the box, it was unbelievable. The shoes had the smell of some toxic material. The shoes were plastic and wrapped in a garbage bag. The partners couldn’t believe what they were seeing. They couldn’t believe they had paid $250,000 for such crap.

                                                                                          They contacted the supplier, who assured them he would ship the correct product. Two weeks after this conversation, the partners started receiving customer emails complaining that they hadn’t received their orders. On checking the tracking numbers, they realized that they were fake.

                                                                                          So many people asked for chargebacks, causing PayPal and Stripe to hold all payments the customers had made. Anatoliy and his partner had to dip into their pockets to refund the customers. They never got the money that was put on hold.

                                                                                          Lessons learned

                                                                                          • Double-check how the product looks and works with your supplier before scaling your sales.
                                                                                          • Think about how you’ll control your inventory once you scale your sales.
                                                                                          • You need cash flow and remain liquid for your business to stay afloat.
                                                                                          
                                                                                          

                                                                                          Andrew’s takeaways

                                                                                          • Start slow.
                                                                                          
                                                                                          

                                                                                          Anatoliy’s recommendation

                                                                                          Anatoliy recommends checking out his website for tips and tricks on running your e-commerce store and resources for writing ad copy that converts.

                                                                                          No.1 goal for the next 12 months

                                                                                          Anatoliy’s number one goal for the next 12 months is to get better quality customers for his agency and make it bigger in terms of results.

                                                                                          Parting words

                                                                                           

                                                                                          “Look at your failures as lessons, and they won’t be failures anymore.”

                                                                                          Anatoliy Labinskiy

                                                                                           

                                                                                          [spp-transcript]

                                                                                           

                                                                                          Connect with Anatoliy Labinskiy

                                                                                          • LinkedIn
                                                                                          • Twitter
                                                                                          • Instagram
                                                                                          • Facebook
                                                                                          • YouTube
                                                                                          • Podcast
                                                                                          • Website
                                                                                          
                                                                                          

                                                                                          Andrew’s books

                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                          • My Worst Investment Ever
                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                          
                                                                                          

                                                                                          Andrew’s online programs

                                                                                          • Valuation Master Class
                                                                                          • The Become a Better Investor Community
                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                          • Finance Made Ridiculously Simple
                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                          • Achieve Your Goals
                                                                                          
                                                                                          

                                                                                          Connect with Andrew Stotz:

                                                                                          • astotz.com
                                                                                          • LinkedIn
                                                                                          • Facebook
                                                                                          • Instagram
                                                                                          • Threads
                                                                                          • Twitter
                                                                                          • YouTube
                                                                                          • My Worst Investment Ever Podcast
                                                                                          
                                                                                          ]]>7e024e80-3c84-4c86-a27e-de71ab5837baMon, 04 Dec 2023 06:00:00 +070028:09falsefullTherapong Vachirapong – You Need to Take Risk to Earn a ReturnBIO: Therapong Vachirapong is a Managing Director and a Head of Equity Research at Phatra Securities PLC.

                                                                                          STORY: Therapong was a risk-averse investor who hardly took any risks. Therefore, he missed out on many investment returns and didn't increase his returns. The only time he’d take a risk was buying stocks when the prices were very low and in most cases, these stocks never grew in value.

                                                                                          LEARNING: Avoid the maximum drawdown. You cannot increase your return without taking calculated risks. Have an investment style to avoid investing in everything.

                                                                                           

                                                                                          “Investing is actually not difficult as long as you don’t get emotional and make irrational decisions when prices change.”

                                                                                          Therapong Vachirapong

                                                                                           

                                                                                          Guest profile

                                                                                          Therapong Vachirapong is a Managing Director and a Head of Equity Research at Phatra Securities PLC. He served as the Co-Head of Equity Research and Banking Analyst until May 2018, covering fundamental equity analysis of Thailand finance and securities companies. He also covered strategy and the financial institutions sector for Thailand and worked closely with BofA Merrill Lynch Research Division regional financials team. He was also a part of the ASEAN investment strategy team. He joined Phatra in 1997.

                                                                                          He won the IAA Awards for Analyst in the Financials sector in the Year 2013 and Best Research House for two consecutive years (2013-2014) by the Investment Analysts Association (IAA)

                                                                                          Theraphong holds an MBA in Finance from Western International University, Arizona, USA, and a BA in Accounting and Finance from Thammasart University.

                                                                                          Worst investment ever

                                                                                          Therapong was a risk-averse investor who hardly took any risks. Therefore, he missed out on many investment returns and didn't increase his returns. The only time he’d take a risk was buying stocks when the prices were very low, and in most cases, these stocks never grew in value.

                                                                                          Lessons learned

                                                                                          • You cannot increase your return without taking calculated risks.
                                                                                          • Gain financial literacy before you start investing.
                                                                                          • Have an investment style to avoid investing in everything.
                                                                                          
                                                                                          

                                                                                          Andrew's takeaways

                                                                                          • Your financial background will affect how you view risks.
                                                                                          
                                                                                          

                                                                                          Actionable advice

                                                                                          Find your own investment style and understand it before committing to it.

                                                                                          Therapong's recommendations

                                                                                          Therapong recommends reading Capitalism without Capital and The Psychology of Money to understand the business world, globalization, and technology before investing.

                                                                                          No.1 goal for the next 12 months

                                                                                          Therapong's number one goal for the next 12 months is to start investing and building a retirement portfolio because he's about to retire.

                                                                                          Parting words

                                                                                           

                                                                                          “Stick to your investment style and be patient. At the end of the day, investing is not difficult as long as you take emotions out of it and stay true to your style.”

                                                                                          Therapong Vachirapong

                                                                                           

                                                                                          [spp-transcript]

                                                                                           

                                                                                          Connect with Therapong Vachirapong

                                                                                          • LinkedIn
                                                                                          • Website
                                                                                          
                                                                                          

                                                                                          Andrew’s books

                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                          • My Worst Investment Ever
                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                          
                                                                                          

                                                                                          Andrew’s online programs

                                                                                          • Valuation Master Class
                                                                                          • The Become a Better Investor Community
                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                          • Finance Made Ridiculously Simple
                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                          • Achieve Your Goals
                                                                                          
                                                                                          

                                                                                          Connect with Andrew Stotz:

                                                                                          • astotz.com
                                                                                          • LinkedIn
                                                                                          • Facebook
                                                                                          • Instagram
                                                                                          • Threads
                                                                                          • Twitter
                                                                                          • YouTube
                                                                                          • My Worst Investment Ever Podcast
                                                                                          
                                                                                          ]]>BIO: Therapong Vachirapong is a Managing Director and a Head of Equity Research at Phatra Securities PLC.

                                                                                          STORY: Therapong was a risk-averse investor who hardly took any risks. Therefore, he missed out on many investment returns and didn't increase his returns. The only time he’d take a risk was buying stocks when the prices were very low and in most cases, these stocks never grew in value.

                                                                                          LEARNING: Avoid the maximum drawdown. You cannot increase your return without taking calculated risks. Have an investment style to avoid investing in everything.

                                                                                           

                                                                                          “Investing is actually not difficult as long as you don’t get emotional and make irrational decisions when prices change.”

                                                                                          Therapong Vachirapong

                                                                                           

                                                                                          Guest profile

                                                                                          Therapong Vachirapong is a Managing Director and a Head of Equity Research at Phatra Securities PLC. He served as the Co-Head of Equity Research and Banking Analyst until May 2018, covering fundamental equity analysis of Thailand finance and securities companies. He also covered strategy and the financial institutions sector for Thailand and worked closely with BofA Merrill Lynch Research Division regional financials team. He was also a part of the ASEAN investment strategy team. He joined Phatra in 1997.

                                                                                          He won the IAA Awards for Analyst in the Financials sector in the Year 2013 and Best Research House for two consecutive years (2013-2014) by the Investment Analysts Association (IAA)

                                                                                          Theraphong holds an MBA in Finance from Western International University, Arizona, USA, and a BA in Accounting and Finance from Thammasart University.

                                                                                          Worst investment ever

                                                                                          Therapong was a risk-averse investor who hardly took any risks. Therefore, he missed out on many investment returns and didn't increase his returns. The only time he’d take a risk was buying stocks when the prices were very low, and in most cases, these stocks never grew in value.

                                                                                          Lessons learned

                                                                                          • You cannot increase your return without taking calculated risks.
                                                                                          • Gain financial literacy before you start investing.
                                                                                          • Have an investment style to avoid investing in everything.
                                                                                          
                                                                                          

                                                                                          Andrew's takeaways

                                                                                          • Your financial background will affect how you view risks.
                                                                                          
                                                                                          

                                                                                          Actionable advice

                                                                                          Find your own investment style and understand it before committing to it.

                                                                                          Therapong's recommendations

                                                                                          Therapong recommends reading Capitalism without Capital and The Psychology of Money to understand the business world, globalization, and technology before investing.

                                                                                          No.1 goal for the next 12 months

                                                                                          Therapong's number one goal for the next 12 months is to start investing and building a retirement portfolio because he's about to retire.

                                                                                          Parting words

                                                                                           

                                                                                          “Stick to your investment style and be patient. At the end of the day, investing is not difficult as long as you take emotions out of it and stay true to your style.”

                                                                                          Therapong Vachirapong

                                                                                           

                                                                                          [spp-transcript]

                                                                                           

                                                                                          Connect with Therapong Vachirapong

                                                                                          • LinkedIn
                                                                                          • Website
                                                                                          
                                                                                          

                                                                                          Andrew’s books

                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                          • My Worst Investment Ever
                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                          
                                                                                          

                                                                                          Andrew’s online programs

                                                                                          • Valuation Master Class
                                                                                          • The Become a Better Investor Community
                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                          • Finance Made Ridiculously Simple
                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                          • Achieve Your Goals
                                                                                          
                                                                                          

                                                                                          Connect with Andrew Stotz:

                                                                                          • astotz.com
                                                                                          • LinkedIn
                                                                                          • Facebook
                                                                                          • Instagram
                                                                                          • Threads
                                                                                          • Twitter
                                                                                          • YouTube
                                                                                          • My Worst Investment Ever Podcast
                                                                                          
                                                                                          ]]>cb9188d5-99fa-4fc1-b1f3-8f5032ac2020Wed, 29 Nov 2023 06:00:00 +070039:45falsefullCarolyn McClanahan – You’ll Never Be Smart Enough to Beat the MarketBIO: Dr. Carolyn McClanahan is a physician turned financial planner. In addition to working in her financial planning practice, she speaks regularly on the interplay between health and financial issues, particularly regarding aging, chronic illness, end-of-life, long-term care, health care reform, and health care costs.

                                                                                          STORY: Carolyn lost a good chunk of her portfolio while doing active management.

                                                                                          LEARNING: There’s nobody out there who can be consistently smart to beat the market. Know your money goals. Be careful of overconfidence bias.

                                                                                           

                                                                                          “We (doctors) think just because we’re smart at medicine, that we can beat the market, we can pick the best investments, and get rich.”

                                                                                          Carolyn McClanahan

                                                                                           

                                                                                          Guest profile

                                                                                          Dr. Carolyn McClanahan is a physician turned financial planner. In addition to working in her financial planning practice, she speaks regularly on the interplay between health and financial issues, particularly regarding aging, chronic illness, end-of-life, long-term care, health care reform, and health care costs. She is an Investopedia Top 100 advisor, serves on the CNBC Financial Advisor Council, and writes for various publications. She is quoted regularly in the Washington Post, New York Times, and CNBC.

                                                                                          Worst investment ever

                                                                                          Carolyn started experimenting with investing in the 90s when she was in her 30s. Her husband inherited a little money from his parents, and they invested it. The investment did super well because it was the mid-90s.

                                                                                          Her husband didn’t want to be an engineer anymore. He wanted to be a track coach and a photographer. The couple tried to find a financial planner to help them plan their finances to accommodate the husband’s wishes. All the financial planners wanted to do was take over the couple’s money and charge a fee to put them in a bunch of mutual funds. They didn’t do actual financial planning.

                                                                                          That’s why Carolyn decided to go back to school. She did stuff like day trading along the way, which was crazy. Carolyn also became a financial planner and got to learn about mutual funds. She spent so much time picking these great mutual funds that were supposed to grow beyond everything else. She also started investigating alternative assets.

                                                                                          The stock market crashed in 2008-2009, and Carolyn suffered a massive loss due to active management.

                                                                                          Lessons learned

                                                                                          • Everybody is brilliant in a different way, but there’s nobody out there who can be consistently brilliant to beat the market.
                                                                                          • Know your money goals. For short-term money, invest conservatively. For long-term money, you can be more aggressive, but don’t try to pick what’s going to do best because you’re not going to know what that is—pick the whole basket.
                                                                                          
                                                                                          

                                                                                          Andrew’s takeaways

                                                                                          • Active management makes it very difficult to beat the market.
                                                                                          • Set up a passive investment account and let it grow.
                                                                                          • Be careful of overconfidence bias.
                                                                                          
                                                                                          

                                                                                          Actionable advice

                                                                                          Know your money goals and your time horizon, and make sure you have an investment policy statement that you follow and stick to through thick and thin, and you’ll be okay.

                                                                                          No.1 goal for the next 12 months

                                                                                          Carolyn’s number one goal for the next 12 months is to start her succession plan, so she’s hoping to hire three new advisors, grow the practice a little more, and get ready to launch herself in the next five to 10 years.

                                                                                          Parting words

                                                                                           

                                                                                          “Just live life fully every day because you won’t get another one.”

                                                                                          Carolyn McClanahan

                                                                                           

                                                                                          [spp-transcript]

                                                                                           

                                                                                          Connect with Carolyn McClanahan

                                                                                          • LinkedIn
                                                                                          • Twitter
                                                                                          • Facebook
                                                                                          • Website
                                                                                          
                                                                                          

                                                                                          Andrew’s books

                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                          • My Worst Investment Ever
                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                          
                                                                                          

                                                                                          Andrew’s online programs

                                                                                          • Valuation Master Class
                                                                                          • The Become a Better Investor Community
                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                          • Finance Made Ridiculously Simple
                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                          • Achieve Your Goals
                                                                                          
                                                                                          

                                                                                          Connect with Andrew Stotz:

                                                                                          • astotz.com
                                                                                          • LinkedIn
                                                                                          • Facebook
                                                                                          • Instagram
                                                                                          • Threads
                                                                                          • Twitter
                                                                                          • YouTube
                                                                                          • My Worst Investment Ever Podcast
                                                                                          
                                                                                          ]]>BIO: Dr. Carolyn McClanahan is a physician turned financial planner. In addition to working in her financial planning practice, she speaks regularly on the interplay between health and financial issues, particularly regarding aging, chronic illness, end-of-life, long-term care, health care reform, and health care costs.

                                                                                          STORY: Carolyn lost a good chunk of her portfolio while doing active management.

                                                                                          LEARNING: There’s nobody out there who can be consistently smart to beat the market. Know your money goals. Be careful of overconfidence bias.

                                                                                           

                                                                                          “We (doctors) think just because we’re smart at medicine, that we can beat the market, we can pick the best investments, and get rich.”

                                                                                          Carolyn McClanahan

                                                                                           

                                                                                          Guest profile

                                                                                          Dr. Carolyn McClanahan is a physician turned financial planner. In addition to working in her financial planning practice, she speaks regularly on the interplay between health and financial issues, particularly regarding aging, chronic illness, end-of-life, long-term care, health care reform, and health care costs. She is an Investopedia Top 100 advisor, serves on the CNBC Financial Advisor Council, and writes for various publications. She is quoted regularly in the Washington Post, New York Times, and CNBC.

                                                                                          Worst investment ever

                                                                                          Carolyn started experimenting with investing in the 90s when she was in her 30s. Her husband inherited a little money from his parents, and they invested it. The investment did super well because it was the mid-90s.

                                                                                          Her husband didn’t want to be an engineer anymore. He wanted to be a track coach and a photographer. The couple tried to find a financial planner to help them plan their finances to accommodate the husband’s wishes. All the financial planners wanted to do was take over the couple’s money and charge a fee to put them in a bunch of mutual funds. They didn’t do actual financial planning.

                                                                                          That’s why Carolyn decided to go back to school. She did stuff like day trading along the way, which was crazy. Carolyn also became a financial planner and got to learn about mutual funds. She spent so much time picking these great mutual funds that were supposed to grow beyond everything else. She also started investigating alternative assets.

                                                                                          The stock market crashed in 2008-2009, and Carolyn suffered a massive loss due to active management.

                                                                                          Lessons learned

                                                                                          • Everybody is brilliant in a different way, but there’s nobody out there who can be consistently brilliant to beat the market.
                                                                                          • Know your money goals. For short-term money, invest conservatively. For long-term money, you can be more aggressive, but don’t try to pick what’s going to do best because you’re not going to know what that is—pick the whole basket.
                                                                                          
                                                                                          

                                                                                          Andrew’s takeaways

                                                                                          • Active management makes it very difficult to beat the market.
                                                                                          • Set up a passive investment account and let it grow.
                                                                                          • Be careful of overconfidence bias.
                                                                                          
                                                                                          

                                                                                          Actionable advice

                                                                                          Know your money goals and your time horizon, and make sure you have an investment policy statement that you follow and stick to through thick and thin, and you’ll be okay.

                                                                                          No.1 goal for the next 12 months

                                                                                          Carolyn’s number one goal for the next 12 months is to start her succession plan, so she’s hoping to hire three new advisors, grow the practice a little more, and get ready to launch herself in the next five to 10 years.

                                                                                          Parting words

                                                                                           

                                                                                          “Just live life fully every day because you won’t get another one.”

                                                                                          Carolyn McClanahan

                                                                                           

                                                                                          [spp-transcript]

                                                                                           

                                                                                          Connect with Carolyn McClanahan

                                                                                          • LinkedIn
                                                                                          • Twitter
                                                                                          • Facebook
                                                                                          • Website
                                                                                          
                                                                                          

                                                                                          Andrew’s books

                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                          • My Worst Investment Ever
                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                          
                                                                                          

                                                                                          Andrew’s online programs

                                                                                          • Valuation Master Class
                                                                                          • The Become a Better Investor Community
                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                          • Finance Made Ridiculously Simple
                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                          • Achieve Your Goals
                                                                                          
                                                                                          

                                                                                          Connect with Andrew Stotz:

                                                                                          • astotz.com
                                                                                          • LinkedIn
                                                                                          • Facebook
                                                                                          • Instagram
                                                                                          • Threads
                                                                                          • Twitter
                                                                                          • YouTube
                                                                                          • My Worst Investment Ever Podcast
                                                                                          
                                                                                          ]]>87a61e4c-a609-4963-b9dc-b64f6de42ce4Mon, 27 Nov 2023 06:00:00 +070024:23falsefullISMS 36: Larry Swedroe – Two Heads Are Not Better Than One When InvestingIn this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Today, they discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this thirteenth series, they discuss mistake number 24: Do You Believe More Heads Are Better Than One? And mistake 25: Do You Believe Active Managers Will Protect You from Bear Markets?

                                                                                          LEARNING: Invest conservatively instead of following the crowd. The best way to minimize the risks of a bear market is to hyper-diversify.

                                                                                           

                                                                                          “The only way to help minimize those risks and be safe is not to take risks, but then, you won’t get any actual returns, and it’ll be hard to reach your goals. The next best thing is to hyper-diversify.”

                                                                                          Larry Swedroe

                                                                                           

                                                                                          In this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Larry is the head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                                          Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this thirteenth series, they discuss mistake number 24: Do You Believe More Heads Are Better Than One? And mistake 25: Do You Believe Active Managers Will Protect You from Bear Markets?

                                                                                          Did you miss out on previous mistakes? Check them out:

                                                                                          • ISMS 8: Larry Swedroe – Are You Overconfident in Your Skills?
                                                                                          • ISMS 17: Larry Swedroe – Do You Project Recent Trends Indefinitely Into the Future?
                                                                                          • ISMS 20: Larry Swedroe – Do You Extrapolate From Small Samples and Trust Your Intuition?
                                                                                          • ISMS 23: Larry Swedroe – Do You Allow Yourself to Be Influenced by Your Ego and Herd Mentality?
                                                                                          • ISMS 24: Larry Swedroe – Confusing Skill and Luck Can Stop You From Investing Wisely
                                                                                          • ISMS 25: Larry Swedroe – Admit Your Mistakes and Don’t Listen to Fake Experts
                                                                                          • ISMS 26: Larry Swedroe – Are You Subject to the Endowment Effect or the Hot Streak Fallacy?
                                                                                          • ISMS 27: Larry Swedroe – Familiar Doesn’t Make It Safe and You’re Not Playing With the House’s Money
                                                                                          • ISMS 29: Larry Swedroe – The Shiny Apple is Poisonous and Information is Not Knowledge
                                                                                          • ISMS 30: Larry Swedroe – Do You Believe Your Fortune Is in the Stars or Rely on Misleading Information?
                                                                                          • ISMS 34: Larry Swedroe – Consider All Hidden Costs Before You Invest
                                                                                          • ISMS 35: Larry Swedroe – Great Companies Are Not Always High-Return Investments
                                                                                          
                                                                                          

                                                                                          Mistake number 24: Do You Believe More Heads Are Better Than One?

                                                                                          One of the things Larry tries to teach people is about conventional wisdom when it comes to investing. Conventional wisdom is things that are generally accepted that no one questions because they typically apply in most fields.

                                                                                          Larry says that the problem with using conventional wisdom when investing is that investing is a very different endeavor because you’re not competing one-on-one against someone; you’re competing against the collective wisdom of the market. And the conventional wisdom is that more heads are always better than one. But when it comes to investing, too many cooks spoil the broth; therefore, more heads are not better than one.

                                                                                          To illustrate this, Larry quotes a study by professors Terrance Odean and Brad Barber, Too Many Cooks Spoil the Profits: Investment Club Performance. The study covered 166 investment clubs, using data from a large brokerage house, from February 1991 to January 1997. Here’s a summary of their findings, which include all trading costs:

                                                                                          • The average club lagged a broad market index by 3.8% annually, returning 14.1% versus 17.9%.
                                                                                          • 60% of the clubs underperformed the market.
                                                                                          • When performance was adjusted for exposure to the risk factors of size and value, alphas (performance above or below benchmark) were negative even before transaction costs. After trading costs, the alphas were, on average –4.4% per year.
                                                                                          
                                                                                          

                                                                                          Larry’s advice is to invest conservatively instead of following the crowd. Diversify your portfolio, make any big bets, and you’ll be fine.

                                                                                          Mistake number 25: Do You Believe Active Managers Will Protect You from Bear Markets?

                                                                                          Larry admits that active managers start with an advantage headed into a bear market because the passive systematic investor is going to earn the return of the market; they’re not getting in and out of the market. The market may have done very well before the bear market. They would have rebalanced their portfolio, taken some of those chips off the table, and sold high. And when the bear market hits, if they stay disciplined, they get to buy low and can even outperform the very funds they invest in.

                                                                                          But active managers tout themselves to have the ability to get you out before the bear emerges from its hibernation and will get you back in before the bull gets into the arena again. So they can move to cash. However, there’s no evidence that active managers can protect you from bear markets.

                                                                                          Larry says the only way to help minimize the risks of a bear market and be safe is not to take risks. But then, you won’t get any actual returns, and reaching your goals will be hard. The next best thing is to hyper-diversify.

                                                                                          About Larry Swedroe

                                                                                          Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                                          Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                                          Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                                          Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                                           

                                                                                          [spp-transcript]

                                                                                           

                                                                                          Connect with Larry Swedroe

                                                                                          • LinkedIn
                                                                                          • In this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Today, they discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this thirteenth series, they discuss mistake number 24: Do You Believe More Heads Are Better Than One? And mistake 25: Do You Believe Active Managers Will Protect You from Bear Markets?

                                                                                            LEARNING: Invest conservatively instead of following the crowd. The best way to minimize the risks of a bear market is to hyper-diversify.

                                                                                             

                                                                                            “The only way to help minimize those risks and be safe is not to take risks, but then, you won’t get any actual returns, and it’ll be hard to reach your goals. The next best thing is to hyper-diversify.”

                                                                                            Larry Swedroe

                                                                                             

                                                                                            In this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Larry is the head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                                            Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this thirteenth series, they discuss mistake number 24: Do You Believe More Heads Are Better Than One? And mistake 25: Do You Believe Active Managers Will Protect You from Bear Markets?

                                                                                            Did you miss out on previous mistakes? Check them out:

                                                                                            • ISMS 8: Larry Swedroe – Are You Overconfident in Your Skills?
                                                                                            • ISMS 17: Larry Swedroe – Do You Project Recent Trends Indefinitely Into the Future?
                                                                                            • ISMS 20: Larry Swedroe – Do You Extrapolate From Small Samples and Trust Your Intuition?
                                                                                            • ISMS 23: Larry Swedroe – Do You Allow Yourself to Be Influenced by Your Ego and Herd Mentality?
                                                                                            • ISMS 24: Larry Swedroe – Confusing Skill and Luck Can Stop You From Investing Wisely
                                                                                            • ISMS 25: Larry Swedroe – Admit Your Mistakes and Don’t Listen to Fake Experts
                                                                                            • ISMS 26: Larry Swedroe – Are You Subject to the Endowment Effect or the Hot Streak Fallacy?
                                                                                            • ISMS 27: Larry Swedroe – Familiar Doesn’t Make It Safe and You’re Not Playing With the House’s Money
                                                                                            • ISMS 29: Larry Swedroe – The Shiny Apple is Poisonous and Information is Not Knowledge
                                                                                            • ISMS 30: Larry Swedroe – Do You Believe Your Fortune Is in the Stars or Rely on Misleading Information?
                                                                                            • ISMS 34: Larry Swedroe – Consider All Hidden Costs Before You Invest
                                                                                            • ISMS 35: Larry Swedroe – Great Companies Are Not Always High-Return Investments
                                                                                            
                                                                                            

                                                                                            Mistake number 24: Do You Believe More Heads Are Better Than One?

                                                                                            One of the things Larry tries to teach people is about conventional wisdom when it comes to investing. Conventional wisdom is things that are generally accepted that no one questions because they typically apply in most fields.

                                                                                            Larry says that the problem with using conventional wisdom when investing is that investing is a very different endeavor because you’re not competing one-on-one against someone; you’re competing against the collective wisdom of the market. And the conventional wisdom is that more heads are always better than one. But when it comes to investing, too many cooks spoil the broth; therefore, more heads are not better than one.

                                                                                            To illustrate this, Larry quotes a study by professors Terrance Odean and Brad Barber, Too Many Cooks Spoil the Profits: Investment Club Performance. The study covered 166 investment clubs, using data from a large brokerage house, from February 1991 to January 1997. Here’s a summary of their findings, which include all trading costs:

                                                                                            • The average club lagged a broad market index by 3.8% annually, returning 14.1% versus 17.9%.
                                                                                            • 60% of the clubs underperformed the market.
                                                                                            • When performance was adjusted for exposure to the risk factors of size and value, alphas (performance above or below benchmark) were negative even before transaction costs. After trading costs, the alphas were, on average –4.4% per year.
                                                                                            
                                                                                            

                                                                                            Larry’s advice is to invest conservatively instead of following the crowd. Diversify your portfolio, make any big bets, and you’ll be fine.

                                                                                            Mistake number 25: Do You Believe Active Managers Will Protect You from Bear Markets?

                                                                                            Larry admits that active managers start with an advantage headed into a bear market because the passive systematic investor is going to earn the return of the market; they’re not getting in and out of the market. The market may have done very well before the bear market. They would have rebalanced their portfolio, taken some of those chips off the table, and sold high. And when the bear market hits, if they stay disciplined, they get to buy low and can even outperform the very funds they invest in.

                                                                                            But active managers tout themselves to have the ability to get you out before the bear emerges from its hibernation and will get you back in before the bull gets into the arena again. So they can move to cash. However, there’s no evidence that active managers can protect you from bear markets.

                                                                                            Larry says the only way to help minimize the risks of a bear market and be safe is not to take risks. But then, you won’t get any actual returns, and reaching your goals will be hard. The next best thing is to hyper-diversify.

                                                                                            About Larry Swedroe

                                                                                            Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                                            Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                                            Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                                            Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                                             

                                                                                            [spp-transcript]

                                                                                             

                                                                                            Connect with Larry Swedroe

                                                                                            • LinkedIn
                                                                                            • Twitter
                                                                                            • Website
                                                                                            • Books
                                                                                            
                                                                                            

                                                                                            Andrew’s books

                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                            • My Worst Investment Ever
                                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                                            
                                                                                            

                                                                                            Andrew’s online programs

                                                                                            • Valuation Master Class
                                                                                            • The Become a Better Investor Community
                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                            • Finance Made Ridiculously Simple
                                                                                            • FVMR Investing: Quantamental Investing Across the World
                                                                                            • Become a Great Presenter and Increase Your Influence
                                                                                            • Transform Your Business with Dr. Deming’s 14 Points
                                                                                            • Achieve Your Goals
                                                                                            
                                                                                            

                                                                                            Connect with Andrew Stotz:

                                                                                            • astotz.com
                                                                                            • LinkedIn
                                                                                            • Facebook
                                                                                            • Instagram
                                                                                            • Twitter
                                                                                            • YouTube
                                                                                            • My Worst Investment Ever Podcast
                                                                                            
                                                                                            

                                                                                            Further reading mentioned

                                                                                            • Larry Swedroe and RC Balaban, Investment Mistakes Even Smart Investors Make and How to Avoid Them
                                                                                            • Philip E. Tetlock, Expert Political Judgment: How Good Is It? How Can We Know?
                                                                                            • Gary Belsky and Thomas Gilovich, Why Smart People Make Big Money Mistakes and How to Correct Them: Lessons from the Life-Changing Science of Behavioral Economics
                                                                                            • Larry Swedroe, Think, Act, and Invest Like Warren Buffett: The Winning Strategy to Help You Achieve Your Financial and Life Goals
                                                                                            
                                                                                            ]]>f27d9894-d9f1-47a2-93ca-4fb197ca24caThu, 23 Nov 2023 06:00:00 +070034:35falsefullLuke Gromen – Start Small, Then Grow as You LearnBIO: Luke Gromen has 25 years of experience in equity research, equity research sales, and as a macro/thematic analyst.

                                                                                            STORY: Luke put a large position in a private equity investment because it had a great founder who had previously created and sold some tech companies. Additionally, one of Luke’s dearest friends went to work there. However, he didn’t realize that the company was overvalued, so when the founder couldn’t raise funding, the company collapsed, and Luke lost all his money.

                                                                                            LEARNING: Position sizing is crucial. Don’t get too excited and emotionally invested in an investment. Be careful when investing in illiquid assets because you can easily get trapped.

                                                                                             

                                                                                            “Start small; you can always get bigger. You’re better off chasing a higher valuation down the road of a more successful operation than starting too big and then having to put in more money or be stuck.”

                                                                                            Luke Gromen

                                                                                             

                                                                                            Guest profile

                                                                                            Luke Gromen has 25 years of experience in equity research, equity research sales, and as a macro/thematic analyst. He is the founder and president of macro/thematic research firm FFTT, LLC, which he founded in early 2014 to address and leverage the opportunity he saw created by applying what clients and former colleagues consistently described as a “unique ability to connect the dots” during a time when he saw an increasing “silo-ing” of perspectives occurring on Wall Street and in corporate America. FFTT caters to institutions and sophisticated individuals by aggregating a wide variety of macroeconomic, thematic, and sector trends in an unconventional manner to identify investable developing economic bottlenecks for his clients.

                                                                                            Prior to founding FFTT, Luke was a founding partner of Cleveland Research Company, where he worked from 2006-14. At CRC, Luke worked in sales and edited CRC’s flagship weekly thematic research summary piece (“Straight from the Source”) for the firm’s clients. Prior to that, Luke was a partner at Midwest Research, where he worked in equity research and sales from 1996-2006. While in sales, Luke was a founding editor of Midwest’s widely-read weekly thematic summary (“Heard in the Midwest”) for the firm’s clients, in which he aggregated and combined proprietary research from Midwest with inputs from other sources.

                                                                                            Luke Gromen holds a BBA in Finance and Accounting from the University of Cincinnati and received his MBA from Case Western Reserve University. He earned the CFA designation in 2003.

                                                                                            Worst investment ever

                                                                                            Luke’s worst investment ever was a private equity investment he made. He started investing in it in early 2001, relatively early in his career when the US was already in recession. The investment was in a tech company similar to Amazon but for construction supplies. It had a database targeting the industrial B2B space.

                                                                                            The company had a great founder who had previously created and sold some tech companies. Some friends of Luke knew him and spoke highly of him. Additionally, one of Luke’s dearest friends went to work in the company, so he had somebody on the inside telling him the company was going well. All this made Luke overconfident, and he went in too big. The investment was about 30% of his entire net worth. Luke didn’t think anything wrong was going to come up. Then Luke met the founder and realized he was not a very good salesperson. He didn’t think much about it anyway.

                                                                                            One day, Luke talked about his investment with a tech analyst at work. When he mentioned the initial valuation, the analyst told him he would lose all his money. This is because the initial valuation was too high. Luke was perplexed by the analyst’s declaration, but he still believed he’d made a good investment.

                                                                                            Luke was still hearing from his buddy at the company, who kept reassuring him that the company was going well. The company had a deal with a major international conglomerate to be acquired. Luke would have made about 8x his money from this sale, but the founder dilly-dallied, and 9/11 happened. There was a funding recession due to 9/11, so the deal never happened, and Luke lost all his money.

                                                                                            Lessons learned

                                                                                            • Position sizing is crucial.
                                                                                            • Don’t get too excited and emotionally invested in an investment.
                                                                                            • When choosing a founder, they must blow your socks off on numerous aspects, not just the product. They should also be good at many things, such as marketing and sales.
                                                                                            
                                                                                            

                                                                                            Andrew’s takeaways

                                                                                            • Be careful when investing in illiquid investments because you can easily get trapped.
                                                                                            
                                                                                            

                                                                                            Actionable advice

                                                                                            Position sizing is so critical because you can easily be wrong or unpredictable things like 9/11 can happen and burn down your investment. So when position sizing, start small and go big later. You’re better off chasing a higher valuation down the road of a more successful operation than starting too big and then getting stuck in a bad investment.

                                                                                            Luke’s recommendations

                                                                                            Luke recommends checking out FFTT, LLC, to learn more about his various research product offerings.

                                                                                            No.1 goal for the next 12 months

                                                                                            Luke’s number one goal for the next 12 months is to maintain a healthy balance of helping clients, engaging in markets, and spending time with the people who matter: his wife and three boys.

                                                                                            Parting words

                                                                                             

                                                                                            “I’d like to thank everybody for listening; I appreciate it. I really enjoyed talking with you about my worst investment. It was therapeutic.”

                                                                                            Luke Gromen

                                                                                             

                                                                                            [spp-transcript]

                                                                                             

                                                                                            Connect with Luke Gromen

                                                                                            • LinkedIn
                                                                                            • Twitter
                                                                                            • YouTube
                                                                                            • Website
                                                                                            
                                                                                            

                                                                                            Andrew’s books

                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                            • My Worst Investment Ever
                                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                                            
                                                                                            

                                                                                            Andrew’s online programs

                                                                                            • Valuation Master Class
                                                                                            • The Become a Better Investor Community
                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                            • Finance Made Ridiculously Simple
                                                                                            • FVMR Investing: Quantamental Investing Across the World
                                                                                            • Become a Great Presenter and Increase Your Influence
                                                                                            • Transform Your Business with Dr. Deming’s 14 Points
                                                                                            • Achieve Your Goals
                                                                                            
                                                                                            

                                                                                            Connect with Andrew Stotz:

                                                                                            • astotz.com
                                                                                            • LinkedIn
                                                                                            • Facebook
                                                                                            • Instagram
                                                                                            • Threads
                                                                                            • Twitter
                                                                                            • YouTube
                                                                                            • My Worst Investment Ever Podcast
                                                                                            
                                                                                            ]]>BIO: Luke Gromen has 25 years of experience in equity research, equity research sales, and as a macro/thematic analyst.

                                                                                            STORY: Luke put a large position in a private equity investment because it had a great founder who had previously created and sold some tech companies. Additionally, one of Luke’s dearest friends went to work there. However, he didn’t realize that the company was overvalued, so when the founder couldn’t raise funding, the company collapsed, and Luke lost all his money.

                                                                                            LEARNING: Position sizing is crucial. Don’t get too excited and emotionally invested in an investment. Be careful when investing in illiquid assets because you can easily get trapped.

                                                                                             

                                                                                            “Start small; you can always get bigger. You’re better off chasing a higher valuation down the road of a more successful operation than starting too big and then having to put in more money or be stuck.”

                                                                                            Luke Gromen

                                                                                             

                                                                                            Guest profile

                                                                                            Luke Gromen has 25 years of experience in equity research, equity research sales, and as a macro/thematic analyst. He is the founder and president of macro/thematic research firm FFTT, LLC, which he founded in early 2014 to address and leverage the opportunity he saw created by applying what clients and former colleagues consistently described as a “unique ability to connect the dots” during a time when he saw an increasing “silo-ing” of perspectives occurring on Wall Street and in corporate America. FFTT caters to institutions and sophisticated individuals by aggregating a wide variety of macroeconomic, thematic, and sector trends in an unconventional manner to identify investable developing economic bottlenecks for his clients.

                                                                                            Prior to founding FFTT, Luke was a founding partner of Cleveland Research Company, where he worked from 2006-14. At CRC, Luke worked in sales and edited CRC’s flagship weekly thematic research summary piece (“Straight from the Source”) for the firm’s clients. Prior to that, Luke was a partner at Midwest Research, where he worked in equity research and sales from 1996-2006. While in sales, Luke was a founding editor of Midwest’s widely-read weekly thematic summary (“Heard in the Midwest”) for the firm’s clients, in which he aggregated and combined proprietary research from Midwest with inputs from other sources.

                                                                                            Luke Gromen holds a BBA in Finance and Accounting from the University of Cincinnati and received his MBA from Case Western Reserve University. He earned the CFA designation in 2003.

                                                                                            Worst investment ever

                                                                                            Luke’s worst investment ever was a private equity investment he made. He started investing in it in early 2001, relatively early in his career when the US was already in recession. The investment was in a tech company similar to Amazon but for construction supplies. It had a database targeting the industrial B2B space.

                                                                                            The company had a great founder who had previously created and sold some tech companies. Some friends of Luke knew him and spoke highly of him. Additionally, one of Luke’s dearest friends went to work in the company, so he had somebody on the inside telling him the company was going well. All this made Luke overconfident, and he went in too big. The investment was about 30% of his entire net worth. Luke didn’t think anything wrong was going to come up. Then Luke met the founder and realized he was not a very good salesperson. He didn’t think much about it anyway.

                                                                                            One day, Luke talked about his investment with a tech analyst at work. When he mentioned the initial valuation, the analyst told him he would lose all his money. This is because the initial valuation was too high. Luke was perplexed by the analyst’s declaration, but he still believed he’d made a good investment.

                                                                                            Luke was still hearing from his buddy at the company, who kept reassuring him that the company was going well. The company had a deal with a major international conglomerate to be acquired. Luke would have made about 8x his money from this sale, but the founder dilly-dallied, and 9/11 happened. There was a funding recession due to 9/11, so the deal never happened, and Luke lost all his money.

                                                                                            Lessons learned

                                                                                            • Position sizing is crucial.
                                                                                            • Don’t get too excited and emotionally invested in an investment.
                                                                                            • When choosing a founder, they must blow your socks off on numerous aspects, not just the product. They should also be good at many things, such as marketing and sales.
                                                                                            
                                                                                            

                                                                                            Andrew’s takeaways

                                                                                            • Be careful when investing in illiquid investments because you can easily get trapped.
                                                                                            
                                                                                            

                                                                                            Actionable advice

                                                                                            Position sizing is so critical because you can easily be wrong or unpredictable things like 9/11 can happen and burn down your investment. So when position sizing, start small and go big later. You’re better off chasing a higher valuation down the road of a more successful operation than starting too big and then getting stuck in a bad investment.

                                                                                            Luke’s recommendations

                                                                                            Luke recommends checking out FFTT, LLC, to learn more about his various research product offerings.

                                                                                            No.1 goal for the next 12 months

                                                                                            Luke’s number one goal for the next 12 months is to maintain a healthy balance of helping clients, engaging in markets, and spending time with the people who matter: his wife and three boys.

                                                                                            Parting words

                                                                                             

                                                                                            “I’d like to thank everybody for listening; I appreciate it. I really enjoyed talking with you about my worst investment. It was therapeutic.”

                                                                                            Luke Gromen

                                                                                             

                                                                                            [spp-transcript]

                                                                                             

                                                                                            Connect with Luke Gromen

                                                                                            • LinkedIn
                                                                                            • Twitter
                                                                                            • YouTube
                                                                                            • Website
                                                                                            
                                                                                            

                                                                                            Andrew’s books

                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                            • My Worst Investment Ever
                                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                                            
                                                                                            

                                                                                            Andrew’s online programs

                                                                                            • Valuation Master Class
                                                                                            • The Become a Better Investor Community
                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                            • Finance Made Ridiculously Simple
                                                                                            • FVMR Investing: Quantamental Investing Across the World
                                                                                            • Become a Great Presenter and Increase Your Influence
                                                                                            • Transform Your Business with Dr. Deming’s 14 Points
                                                                                            • Achieve Your Goals
                                                                                            
                                                                                            

                                                                                            Connect with Andrew Stotz:

                                                                                            • astotz.com
                                                                                            • LinkedIn
                                                                                            • Facebook
                                                                                            • Instagram
                                                                                            • Threads
                                                                                            • Twitter
                                                                                            • YouTube
                                                                                            • My Worst Investment Ever Podcast
                                                                                            
                                                                                            ]]>68335c7d-71c8-4617-942e-eb9670c10196Wed, 22 Nov 2023 06:00:00 +070051:23falsefullJason Brown – You Never Go Broke Taking a ProfitBIO: Jason Brown is the founder of Power Trades University and the Brown Report. He has over a decade of stock & options trading experience, is a podcast host, and is a YouTuber. Jason believes anyone can profit from the stock market, even if they’ve lost money before.

                                                                                            STORY: At 24, Jason had about $250,000 in a trading account. Jason wanted to buy a condo and pay cash for it. Condos were like $500,000. He figured that he could use the $250,000 to trade and make enough to pay cash for the condo. So he risked a quarter million trying to make half a million and lost it all.

                                                                                            LEARNING: You never go broke taking a profit. There’s no one trade that’ll make you rich, but there is one trade that will blow up your entire account. Don’t set unrealistic or obsessive goals.

                                                                                             

                                                                                            “You never go broke taking a profit. So, if you’re up, it’s better to take that money off the table and go into your next investment with the house’s money versus trying to make everything at once.”

                                                                                            Jason Brown

                                                                                             

                                                                                            Guest profile

                                                                                            Jason Brown is the founder of Power Trades University and the Brown Report. He has over a decade of stock & options trading experience, is a podcast host, and is a YouTuber. Jason believes anyone can profit from the stock market, even if they’ve lost money before. They just need to know how to identify the best time to buy and sell and the correct option strategies that can supercharge returns and minimize risk. Jason helps people go from nervous beginners to confident stocks & options traders. Check out his Free Stock Market Starter Pack and Premium courses and coaching.

                                                                                            Worst investment ever

                                                                                            At 21, Jason had an account with $113,000. He felt smarter than everybody. He’d made a six-figure income without a degree or a job. Jason went into full-time trading for the next two years and grew the account to about $300,000. But since he was living off some of the money, he had a balance of $250,000.

                                                                                            Jason decided to buy a condo downtown Royal Oak, Michigan, and pay cash for it. Condos were like $500,000. Jason figured that he could use the $250,000 to trade and make enough to pay cash for the condo. So he risked a quarter million trying to make half a million and lost it all. Jason didn’t lose the money all at once. In fact, he was up $100,000 in that trade, but he wanted to make half a million in one trade. So, he ended up blowing his entire account. That was Jason’s worst investment because he already had a good life. He had a nice place to stay and a nice car. He didn’t need to risk his entire account to buy some condo in cash. It just wasn’t smart. This investment made Jason lose everything. He had to sell his car, move out of his place, and return home to live with his mom.

                                                                                            Lessons learned

                                                                                            • You never go broke taking a profit.
                                                                                            • There’s no one trade that’ll make you rich, but there is one trade that will blow up your entire account.
                                                                                            • You’re stronger and better than your worst day.
                                                                                            • It’s OK to have an astronomical goal, but also be OK with the astronomical risks of the goal not working out.
                                                                                            
                                                                                            

                                                                                            Andrew’s takeaways

                                                                                            • Don’t set unrealistic or obsessive goals.
                                                                                            • Don’t let your worst days define you; grab power from having faced loss.
                                                                                            
                                                                                            

                                                                                            Actionable advice

                                                                                            Stop and take time to think. Also, seek out mentors who have succeeded in a similar path before.

                                                                                            Jason’s recommendations

                                                                                            Jason recommends the book Think and Grow Rich because people often think making money is about learning this one skill. However, what’s missing is the mindset, the belief that they can do it and be right on their investments.

                                                                                            Jason also recommends his free resource, The Stock Market Starter Pack, which teaches people how to start reading stock charts, how to open their first account, and when to buy or sell.

                                                                                            No.1 goal for the next 12 months

                                                                                            Jason’s number one goal for the next 12 months is to complete a book he’s working on so that he can help many more people.

                                                                                            Parting words

                                                                                             

                                                                                            “You never go broke taking a profit. So when you’re up, take the money off the table.”

                                                                                            Jason Brown

                                                                                             

                                                                                            [spp-transcript]

                                                                                             

                                                                                            Connect with Jason Brown

                                                                                            • LinkedIn
                                                                                            • Twitter
                                                                                            • Facebook
                                                                                            • YouTube
                                                                                            • Podcast
                                                                                            • Website
                                                                                            
                                                                                            

                                                                                            Andrew’s books

                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                            • My Worst Investment Ever
                                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                                            
                                                                                            

                                                                                            Andrew’s online programs

                                                                                            • Valuation Master Class
                                                                                            • The Become a Better Investor Community
                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                            • Finance Made Ridiculously Simple
                                                                                            • FVMR Investing: Quantamental Investing Across the World
                                                                                            • Become a Great Presenter and Increase Your Influence
                                                                                            • Transform Your Business with Dr. Deming’s 14 Points
                                                                                            • Achieve Your Goals
                                                                                            
                                                                                            

                                                                                            Connect with Andrew Stotz:

                                                                                            • astotz.com
                                                                                            • LinkedIn
                                                                                            • Facebook
                                                                                            • Instagram
                                                                                            • Threads
                                                                                            • Twitter
                                                                                            • YouTube
                                                                                            • My Worst Investment Ever Podcast
                                                                                            
                                                                                            ]]>BIO: Jason Brown is the founder of Power Trades University and the Brown Report. He has over a decade of stock & options trading experience, is a podcast host, and is a YouTuber. Jason believes anyone can profit from the stock market, even if they’ve lost money before.

                                                                                            STORY: At 24, Jason had about $250,000 in a trading account. Jason wanted to buy a condo and pay cash for it. Condos were like $500,000. He figured that he could use the $250,000 to trade and make enough to pay cash for the condo. So he risked a quarter million trying to make half a million and lost it all.

                                                                                            LEARNING: You never go broke taking a profit. There’s no one trade that’ll make you rich, but there is one trade that will blow up your entire account. Don’t set unrealistic or obsessive goals.

                                                                                             

                                                                                            “You never go broke taking a profit. So, if you’re up, it’s better to take that money off the table and go into your next investment with the house’s money versus trying to make everything at once.”

                                                                                            Jason Brown

                                                                                             

                                                                                            Guest profile

                                                                                            Jason Brown is the founder of Power Trades University and the Brown Report. He has over a decade of stock & options trading experience, is a podcast host, and is a YouTuber. Jason believes anyone can profit from the stock market, even if they’ve lost money before. They just need to know how to identify the best time to buy and sell and the correct option strategies that can supercharge returns and minimize risk. Jason helps people go from nervous beginners to confident stocks & options traders. Check out his Free Stock Market Starter Pack and Premium courses and coaching.

                                                                                            Worst investment ever

                                                                                            At 21, Jason had an account with $113,000. He felt smarter than everybody. He’d made a six-figure income without a degree or a job. Jason went into full-time trading for the next two years and grew the account to about $300,000. But since he was living off some of the money, he had a balance of $250,000.

                                                                                            Jason decided to buy a condo downtown Royal Oak, Michigan, and pay cash for it. Condos were like $500,000. Jason figured that he could use the $250,000 to trade and make enough to pay cash for the condo. So he risked a quarter million trying to make half a million and lost it all. Jason didn’t lose the money all at once. In fact, he was up $100,000 in that trade, but he wanted to make half a million in one trade. So, he ended up blowing his entire account. That was Jason’s worst investment because he already had a good life. He had a nice place to stay and a nice car. He didn’t need to risk his entire account to buy some condo in cash. It just wasn’t smart. This investment made Jason lose everything. He had to sell his car, move out of his place, and return home to live with his mom.

                                                                                            Lessons learned

                                                                                            • You never go broke taking a profit.
                                                                                            • There’s no one trade that’ll make you rich, but there is one trade that will blow up your entire account.
                                                                                            • You’re stronger and better than your worst day.
                                                                                            • It’s OK to have an astronomical goal, but also be OK with the astronomical risks of the goal not working out.
                                                                                            
                                                                                            

                                                                                            Andrew’s takeaways

                                                                                            • Don’t set unrealistic or obsessive goals.
                                                                                            • Don’t let your worst days define you; grab power from having faced loss.
                                                                                            
                                                                                            

                                                                                            Actionable advice

                                                                                            Stop and take time to think. Also, seek out mentors who have succeeded in a similar path before.

                                                                                            Jason’s recommendations

                                                                                            Jason recommends the book Think and Grow Rich because people often think making money is about learning this one skill. However, what’s missing is the mindset, the belief that they can do it and be right on their investments.

                                                                                            Jason also recommends his free resource, The Stock Market Starter Pack, which teaches people how to start reading stock charts, how to open their first account, and when to buy or sell.

                                                                                            No.1 goal for the next 12 months

                                                                                            Jason’s number one goal for the next 12 months is to complete a book he’s working on so that he can help many more people.

                                                                                            Parting words

                                                                                             

                                                                                            “You never go broke taking a profit. So when you’re up, take the money off the table.”

                                                                                            Jason Brown

                                                                                             

                                                                                            [spp-transcript]

                                                                                             

                                                                                            Connect with Jason Brown

                                                                                            • LinkedIn
                                                                                            • Twitter
                                                                                            • Facebook
                                                                                            • YouTube
                                                                                            • Podcast
                                                                                            • Website
                                                                                            
                                                                                            

                                                                                            Andrew’s books

                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                            • My Worst Investment Ever
                                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                                            
                                                                                            

                                                                                            Andrew’s online programs

                                                                                            • Valuation Master Class
                                                                                            • The Become a Better Investor Community
                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                            • Finance Made Ridiculously Simple
                                                                                            • FVMR Investing: Quantamental Investing Across the World
                                                                                            • Become a Great Presenter and Increase Your Influence
                                                                                            • Transform Your Business with Dr. Deming’s 14 Points
                                                                                            • Achieve Your Goals
                                                                                            
                                                                                            

                                                                                            Connect with Andrew Stotz:

                                                                                            • astotz.com
                                                                                            • LinkedIn
                                                                                            • Facebook
                                                                                            • Instagram
                                                                                            • Threads
                                                                                            • Twitter
                                                                                            • YouTube
                                                                                            • My Worst Investment Ever Podcast
                                                                                            
                                                                                            ]]>efb6e806-07c6-4b05-a1cc-f8eb64dbe217Mon, 20 Nov 2023 06:00:00 +070034:42falsefullISMS 35: Larry Swedroe – Great Companies Are Not Always High-Return InvestmentsIn this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Today, they discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this twelfth series, they discuss mistake number 22: Do You Confuse Great Companies with High-Return Investments? And mistake number 23: Do You Understand How the Price Paid Affects Returns?

                                                                                            LEARNING: Great companies are not always high-return investments. Understand how the price paid affects returns. Rebalance your portfolio regularly.

                                                                                             

                                                                                            “Rebalancing forces you to do the opposite of what most people do, which is dumbly chasing returns and ignoring the historical evidence. They ignore the fact that typically, over the longer term, prices tend to revert to some mean.”

                                                                                            Larry Swedroe

                                                                                             

                                                                                            In this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Larry is the head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                                            Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this twelfth series, they discuss mistake number 22: Do You Confuse Great Companies with High-Return Investments? And mistake number 23: Do You Understand How the Price Paid Affects Returns?

                                                                                            Did you miss out on previous mistakes? Check them out:

                                                                                            • ISMS 8: Larry Swedroe – Are You Overconfident in Your Skills?
                                                                                            • ISMS 17: Larry Swedroe – Do You Project Recent Trends Indefinitely Into the Future?
                                                                                            • ISMS 20: Larry Swedroe – Do You Extrapolate From Small Samples and Trust Your Intuition?
                                                                                            • ISMS 23: Larry Swedroe – Do You Allow Yourself to Be Influenced by Your Ego and Herd Mentality?
                                                                                            • ISMS 24: Larry Swedroe – Confusing Skill and Luck Can Stop You From Investing Wisely
                                                                                            • ISMS 25: Larry Swedroe – Admit Your Mistakes and Don’t Listen to Fake Experts
                                                                                            • ISMS 26: Larry Swedroe – Are You Subject to the Endowment Effect or the Hot Streak Fallacy?
                                                                                            • ISMS 27: Larry Swedroe – Familiar Doesn’t Make It Safe and You’re Not Playing With the House’s Money
                                                                                            • ISMS 29: Larry Swedroe – The Shiny Apple is Poisonous and Information is Not Knowledge
                                                                                            • ISMS 30: Larry Swedroe – Do You Believe Your Fortune Is in the Stars or Rely on Misleading Information?
                                                                                            • ISMS 34: Larry Swedroe – Consider All Hidden Costs Before You Invest
                                                                                            
                                                                                            

                                                                                            Mistake number 22: Do You Confuse Great Companies with High-Return Investments?

                                                                                            According to Larry, if you ask most investors if they’d rather own companies that have had an average return on assets of roughly 9% and a higher growth rate in earnings or companies that have an average return on assets of about 4% and lower earnings growth, 99% of investors would choose the high return and fast growth companies. One of the most persistent and incorrect beliefs among investors is that “growth” stocks have provided (and are expected to provide) higher returns than “value” stocks. But that shows a lack of understanding of how markets work.

                                                                                            Larry says you should buy the safer investment unless the expected return from the worse investment is much higher to compensate for the extra risk because the market is pricing for risk. He reminds investors that just because value companies have lower growth in earnings and lower returns on their assets doesn’t make them bad investments. It just makes them less glamorous and attractive companies.

                                                                                            When you identify a great company, that’s only one bit of the story. Larry says you have to ask yourself, what’s the price you’re paying? What do you know that the market doesn’t know? And suppose the answer is nothing, which it almost certainly is. In that case, the price already reflects all that great information, which means the PE ratio is likely high, meaning the expected return generally will be lower. If you’re going to buy growth stocks or small stocks, make sure that you’re screening out the ones with high investment but low profitability because they’re not burning cash with high investment, and they can turn around.

                                                                                            Mistake number 23: Do You Understand How the Price Paid Affects Returns?

                                                                                            When forecasting investment returns, many individuals make the mistake of simply extrapolating recent returns into the future. Bull markets lead investors to expect higher future returns, and bear markets lead them to expect lower future returns. However, you need to understand the price you pay for an asset impacts future returns.

                                                                                            Larry says the best investment strategy is not to try to time the markets but instead rebalance. When you do well, and the PEs are going up, you’ll put less into equities and more into bonds or even sell some stocks to buy bonds. And when the PEs are low because stocks have done poorly, you’ll put more money into stocks or even sell bonds to buy stocks. Rebalancing will give you an astronomical diversification benefit.

                                                                                            About Larry Swedroe

                                                                                            Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                                            Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                                            Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                                            Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                                             

                                                                                            [spp-transcript]

                                                                                             

                                                                                            Connect with Larry Swedroe

                                                                                            • LinkedIn
                                                                                            • Twitter
                                                                                            • Website
                                                                                            • Books
                                                                                            
                                                                                            

                                                                                            Andrew’s books

                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                            • My Worst Investment...]]>In this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Today, they discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this twelfth series, they discuss mistake number 22: Do You Confuse Great Companies with High-Return Investments? And mistake number 23: Do You Understand How the Price Paid Affects Returns?

                                                                                              LEARNING: Great companies are not always high-return investments. Understand how the price paid affects returns. Rebalance your portfolio regularly.

                                                                                               

                                                                                              “Rebalancing forces you to do the opposite of what most people do, which is dumbly chasing returns and ignoring the historical evidence. They ignore the fact that typically, over the longer term, prices tend to revert to some mean.”

                                                                                              Larry Swedroe

                                                                                               

                                                                                              In this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Larry is the head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                                              Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this twelfth series, they discuss mistake number 22: Do You Confuse Great Companies with High-Return Investments? And mistake number 23: Do You Understand How the Price Paid Affects Returns?

                                                                                              Did you miss out on previous mistakes? Check them out:

                                                                                              • ISMS 8: Larry Swedroe – Are You Overconfident in Your Skills?
                                                                                              • ISMS 17: Larry Swedroe – Do You Project Recent Trends Indefinitely Into the Future?
                                                                                              • ISMS 20: Larry Swedroe – Do You Extrapolate From Small Samples and Trust Your Intuition?
                                                                                              • ISMS 23: Larry Swedroe – Do You Allow Yourself to Be Influenced by Your Ego and Herd Mentality?
                                                                                              • ISMS 24: Larry Swedroe – Confusing Skill and Luck Can Stop You From Investing Wisely
                                                                                              • ISMS 25: Larry Swedroe – Admit Your Mistakes and Don’t Listen to Fake Experts
                                                                                              • ISMS 26: Larry Swedroe – Are You Subject to the Endowment Effect or the Hot Streak Fallacy?
                                                                                              • ISMS 27: Larry Swedroe – Familiar Doesn’t Make It Safe and You’re Not Playing With the House’s Money
                                                                                              • ISMS 29: Larry Swedroe – The Shiny Apple is Poisonous and Information is Not Knowledge
                                                                                              • ISMS 30: Larry Swedroe – Do You Believe Your Fortune Is in the Stars or Rely on Misleading Information?
                                                                                              • ISMS 34: Larry Swedroe – Consider All Hidden Costs Before You Invest
                                                                                              
                                                                                              

                                                                                              Mistake number 22: Do You Confuse Great Companies with High-Return Investments?

                                                                                              According to Larry, if you ask most investors if they’d rather own companies that have had an average return on assets of roughly 9% and a higher growth rate in earnings or companies that have an average return on assets of about 4% and lower earnings growth, 99% of investors would choose the high return and fast growth companies. One of the most persistent and incorrect beliefs among investors is that “growth” stocks have provided (and are expected to provide) higher returns than “value” stocks. But that shows a lack of understanding of how markets work.

                                                                                              Larry says you should buy the safer investment unless the expected return from the worse investment is much higher to compensate for the extra risk because the market is pricing for risk. He reminds investors that just because value companies have lower growth in earnings and lower returns on their assets doesn’t make them bad investments. It just makes them less glamorous and attractive companies.

                                                                                              When you identify a great company, that’s only one bit of the story. Larry says you have to ask yourself, what’s the price you’re paying? What do you know that the market doesn’t know? And suppose the answer is nothing, which it almost certainly is. In that case, the price already reflects all that great information, which means the PE ratio is likely high, meaning the expected return generally will be lower. If you’re going to buy growth stocks or small stocks, make sure that you’re screening out the ones with high investment but low profitability because they’re not burning cash with high investment, and they can turn around.

                                                                                              Mistake number 23: Do You Understand How the Price Paid Affects Returns?

                                                                                              When forecasting investment returns, many individuals make the mistake of simply extrapolating recent returns into the future. Bull markets lead investors to expect higher future returns, and bear markets lead them to expect lower future returns. However, you need to understand the price you pay for an asset impacts future returns.

                                                                                              Larry says the best investment strategy is not to try to time the markets but instead rebalance. When you do well, and the PEs are going up, you’ll put less into equities and more into bonds or even sell some stocks to buy bonds. And when the PEs are low because stocks have done poorly, you’ll put more money into stocks or even sell bonds to buy stocks. Rebalancing will give you an astronomical diversification benefit.

                                                                                              About Larry Swedroe

                                                                                              Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                                              Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                                              Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                                              Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                                               

                                                                                              [spp-transcript]

                                                                                               

                                                                                              Connect with Larry Swedroe

                                                                                              • LinkedIn
                                                                                              • Twitter
                                                                                              • Website
                                                                                              • Books
                                                                                              
                                                                                              

                                                                                              Andrew’s books

                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                              • My Worst Investment Ever
                                                                                              • 9 Valuation Mistakes and How to Avoid Them
                                                                                              • Transform Your Business with Dr.Deming’s 14 Points
                                                                                              
                                                                                              

                                                                                              Andrew’s online programs

                                                                                              • Valuation Master Class
                                                                                              • The Become a Better Investor Community
                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                              • Finance Made Ridiculously Simple
                                                                                              • FVMR Investing: Quantamental Investing Across the World
                                                                                              • Become a Great Presenter and Increase Your Influence
                                                                                              • Transform Your Business with Dr. Deming’s 14 Points
                                                                                              • Achieve Your Goals
                                                                                              
                                                                                              

                                                                                              Connect with Andrew Stotz:

                                                                                              • astotz.com
                                                                                              • LinkedIn
                                                                                              • Facebook
                                                                                              • Instagram
                                                                                              • Twitter
                                                                                              • YouTube
                                                                                              • My Worst Investment Ever Podcast
                                                                                              
                                                                                              

                                                                                              Further reading mentioned

                                                                                              • Larry Swedroe and RC Balaban, Investment Mistakes Even Smart Investors Make and How to Avoid Them
                                                                                              • Philip E. Tetlock, Expert Political Judgment: How Good Is It? How Can We Know?
                                                                                              • Gary Belsky and Thomas Gilovich, Why Smart People Make Big Money Mistakes and How to Correct Them: Lessons from the Life-Changing Science of Behavioral Economics
                                                                                              • Larry Swedroe, Think, Act, and Invest Like Warren Buffett: The Winning Strategy to Help You Achieve Your Financial and Life Goals
                                                                                              
                                                                                              ]]>98c46121-1c25-4588-b195-d5fe756a7429Thu, 16 Nov 2023 06:00:00 +070039:35falsefullChris Vermeulen – Find What You’re Passionate AboutBIO: Chris Vermeulen shares a different way of investing that doesn’t use diversification or the buy-and-hold method. In his new book, “Asset Revesting - How To Exclusively Hold Assets Rising In Value, Profit During Bear Markets, And Continue Building Wealth In Retirement,” he explains why this approach is the way forward.

                                                                                              STORY: Chris and his father imported infrared saunas from China only to discover they were not certified in Canada after arrival. Chris had invested over $250,000 that went down the drain.

                                                                                              LEARNING: Find what you’re passionate about. Invest in what you’re familiar with. Start small, test things out, and then go big.

                                                                                               

                                                                                              “You might not make as much doing something you’re passionate about, but if you’re a creative person, you’ll find a way to make it work and eventually become highly successful.”

                                                                                              Chris Vermeulen

                                                                                               

                                                                                              Guest profile

                                                                                              Chris Vermeulen shares a different way of investing that doesn’t use diversification or the buy-and-hold method. In his new book, “Asset Revesting - How To Exclusively Hold Assets Rising In Value, Profit During Bear Markets, And Continue Building Wealth In Retirement,” he explains why this approach is the way forward. He believes that investing should be about capital preservation first and growth second. By doing this, there will always be capital to invest and consistent account growth.

                                                                                              With over 25 years of investment experience and data working with 20,000 self-directed investors, Chris is confident that this will become the new industry standard investment model.

                                                                                              Worst investment ever

                                                                                              Chris made enough money in the last year of college trading. Since his parents paid for his college education, he was debt-free and could start investing immediately after college. His dad happened to be helping a friend who was selling generators. The guy was importing them into the country.

                                                                                              He suggested to his dad to buy these same generators from China. They flew to China and went to the Canton World Fair, where there were over 40,000 products and manufacturers of everything you can imagine. They’d visit the warehouses daily, and every time they saw a product they liked, they’d take the pamphlet and keep it. At the night’s end, they’d sort the brochures into yes, no, and maybes. They did this for four days.

                                                                                              Eventually, they came across infrared saunas; at the time, no one was selling them in Canada. They put in a big order. Chris borrowed $250,000, ready to take over the world.

                                                                                              When the products arrived in Canada months later, they set one up and realized they had more or less been scammed. The products weren’t certified by the Canadian Electrical Code. The Canadian Electrical Safety Authority came, checked them out, and refused to approve them. They had to put the products in the dump and pay to get rid of them, making a complete loss. It took them over a year and a half to get the next batch of products that were actually certified.

                                                                                              Lessons learned

                                                                                              • Find what you’re passionate about.
                                                                                              • Invest in what you’re familiar with.
                                                                                              
                                                                                              

                                                                                              Andrew’s takeaways

                                                                                              • Start small, test things out, and then go big.
                                                                                              
                                                                                              

                                                                                              Actionable advice

                                                                                              Do something you’re passionate about because, eventually, you’ll run into tough times. You only have to be really good at one thing, and you can be as wealthy as you could ever imagine—if you can help enough people with whatever product or something you’re good at.

                                                                                              Chris’s recommendations

                                                                                              Chris recommends reading Stan Weinstein’s Secrets For Profiting in Bull and Bear Markets. The book teaches the four stages that the stock market goes through, how to identify the stages, and the strategy to use for each. If you understand these stages, you can apply that to whatever you’re investing in.

                                                                                              No.1 goal for the next 12 months

                                                                                              Chris’s number one goal for the next 12 months is to preserve capital.

                                                                                              Parting words

                                                                                               

                                                                                              “Protect your capital. Don’t get caught up thinking stocks are the only asset available, and buy a bunch of them. There are many more things out there to invest in.”

                                                                                              Chris Vermeulen

                                                                                               

                                                                                              [spp-transcript]

                                                                                               

                                                                                              Connect with Chris Vermeulen

                                                                                              • LinkedIn
                                                                                              • Facebook
                                                                                              • Twitter
                                                                                              • YouTube
                                                                                              • Website
                                                                                              • Books
                                                                                              
                                                                                              

                                                                                              Andrew’s books

                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                              • My Worst Investment Ever
                                                                                              • 9 Valuation Mistakes and How to Avoid Them
                                                                                              • Transform Your Business with Dr.Deming’s 14 Points
                                                                                              
                                                                                              

                                                                                              Andrew’s online programs

                                                                                              • Valuation Master Class
                                                                                              • The Become a Better Investor Community
                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                              • Finance Made Ridiculously Simple
                                                                                              • FVMR Investing: Quantamental Investing Across the World
                                                                                              • Become a Great Presenter and Increase Your Influence
                                                                                              • Transform Your Business with Dr. Deming’s 14 Points
                                                                                              • Achieve Your Goals
                                                                                              
                                                                                              

                                                                                              Connect with Andrew Stotz:

                                                                                              • astotz.com
                                                                                              • LinkedIn
                                                                                              • Facebook
                                                                                              • Instagram
                                                                                              • Threads
                                                                                              • Twitter
                                                                                              • YouTube
                                                                                              • My Worst Investment Ever Podcast
                                                                                              
                                                                                              ]]>BIO: Chris Vermeulen shares a different way of investing that doesn’t use diversification or the buy-and-hold method. In his new book, “Asset Revesting - How To Exclusively Hold Assets Rising In Value, Profit During Bear Markets, And Continue Building Wealth In Retirement,” he explains why this approach is the way forward.

                                                                                              STORY: Chris and his father imported infrared saunas from China only to discover they were not certified in Canada after arrival. Chris had invested over $250,000 that went down the drain.

                                                                                              LEARNING: Find what you’re passionate about. Invest in what you’re familiar with. Start small, test things out, and then go big.

                                                                                               

                                                                                              “You might not make as much doing something you’re passionate about, but if you’re a creative person, you’ll find a way to make it work and eventually become highly successful.”

                                                                                              Chris Vermeulen

                                                                                               

                                                                                              Guest profile

                                                                                              Chris Vermeulen shares a different way of investing that doesn’t use diversification or the buy-and-hold method. In his new book, “Asset Revesting - How To Exclusively Hold Assets Rising In Value, Profit During Bear Markets, And Continue Building Wealth In Retirement,” he explains why this approach is the way forward. He believes that investing should be about capital preservation first and growth second. By doing this, there will always be capital to invest and consistent account growth.

                                                                                              With over 25 years of investment experience and data working with 20,000 self-directed investors, Chris is confident that this will become the new industry standard investment model.

                                                                                              Worst investment ever

                                                                                              Chris made enough money in the last year of college trading. Since his parents paid for his college education, he was debt-free and could start investing immediately after college. His dad happened to be helping a friend who was selling generators. The guy was importing them into the country.

                                                                                              He suggested to his dad to buy these same generators from China. They flew to China and went to the Canton World Fair, where there were over 40,000 products and manufacturers of everything you can imagine. They’d visit the warehouses daily, and every time they saw a product they liked, they’d take the pamphlet and keep it. At the night’s end, they’d sort the brochures into yes, no, and maybes. They did this for four days.

                                                                                              Eventually, they came across infrared saunas; at the time, no one was selling them in Canada. They put in a big order. Chris borrowed $250,000, ready to take over the world.

                                                                                              When the products arrived in Canada months later, they set one up and realized they had more or less been scammed. The products weren’t certified by the Canadian Electrical Code. The Canadian Electrical Safety Authority came, checked them out, and refused to approve them. They had to put the products in the dump and pay to get rid of them, making a complete loss. It took them over a year and a half to get the next batch of products that were actually certified.

                                                                                              Lessons learned

                                                                                              • Find what you’re passionate about.
                                                                                              • Invest in what you’re familiar with.
                                                                                              
                                                                                              

                                                                                              Andrew’s takeaways

                                                                                              • Start small, test things out, and then go big.
                                                                                              
                                                                                              

                                                                                              Actionable advice

                                                                                              Do something you’re passionate about because, eventually, you’ll run into tough times. You only have to be really good at one thing, and you can be as wealthy as you could ever imagine—if you can help enough people with whatever product or something you’re good at.

                                                                                              Chris’s recommendations

                                                                                              Chris recommends reading Stan Weinstein’s Secrets For Profiting in Bull and Bear Markets. The book teaches the four stages that the stock market goes through, how to identify the stages, and the strategy to use for each. If you understand these stages, you can apply that to whatever you’re investing in.

                                                                                              No.1 goal for the next 12 months

                                                                                              Chris’s number one goal for the next 12 months is to preserve capital.

                                                                                              Parting words

                                                                                               

                                                                                              “Protect your capital. Don’t get caught up thinking stocks are the only asset available, and buy a bunch of them. There are many more things out there to invest in.”

                                                                                              Chris Vermeulen

                                                                                               

                                                                                              [spp-transcript]

                                                                                               

                                                                                              Connect with Chris Vermeulen

                                                                                              • LinkedIn
                                                                                              • Facebook
                                                                                              • Twitter
                                                                                              • YouTube
                                                                                              • Website
                                                                                              • Books
                                                                                              
                                                                                              

                                                                                              Andrew’s books

                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                              • My Worst Investment Ever
                                                                                              • 9 Valuation Mistakes and How to Avoid Them
                                                                                              • Transform Your Business with Dr.Deming’s 14 Points
                                                                                              
                                                                                              

                                                                                              Andrew’s online programs

                                                                                              • Valuation Master Class
                                                                                              • The Become a Better Investor Community
                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                              • Finance Made Ridiculously Simple
                                                                                              • FVMR Investing: Quantamental Investing Across the World
                                                                                              • Become a Great Presenter and Increase Your Influence
                                                                                              • Transform Your Business with Dr. Deming’s 14 Points
                                                                                              • Achieve Your Goals
                                                                                              
                                                                                              

                                                                                              Connect with Andrew Stotz:

                                                                                              • astotz.com
                                                                                              • LinkedIn
                                                                                              • Facebook
                                                                                              • Instagram
                                                                                              • Threads
                                                                                              • Twitter
                                                                                              • YouTube
                                                                                              • My Worst Investment Ever Podcast
                                                                                              
                                                                                              ]]>b5907f2d-d7c8-4819-9e55-5efcb0e19198Wed, 15 Nov 2023 06:00:00 +070033:35falsefullKenny Rose – Don’t Invest in Anything You’re Not Fully Educated InBIO: Kenny Rose is the Chicago-based founder and CEO of FranShares, a platform that democratizes franchise investing.

                                                                                              STORY: Kenny invested in an aviation stock and hit the jackpot. Feeling lucky, he invested in a company dealing with processors and microchips, an industry he knew nothing about. He bought the stock at $4. About a year later, the stock went down to $2.50. Kenny panicked and sold his stocks. The stock is trading at over $100 today.

                                                                                              LEARNING: Before you invest, think about how much you’re willing to lose, what your time horizon is, and what your maximum loss might be. Educate yourself about what you want to invest in. Outsource what you don’t know to professionals who know those spaces better.

                                                                                               

                                                                                              “Be educated, pick an investment style you know, and stick with it. Outsource what you don’t know to professionals who know those spaces better.”

                                                                                              Kenny Rose

                                                                                               

                                                                                              Guest profile

                                                                                              Kenny Rose is the Chicago-based founder and CEO of FranShares, a platform that democratizes franchise investing. With over a decade of experience in the franchise industry, Kenny has worked with over 600 franchise brands in more than 100 industries. He is an expert on franchise evaluation and has helped individuals identify the best ways to deploy capital into franchise ownership to maximize return on investment and operations.

                                                                                              Kenny founded FranShares to allow individuals to invest in a diversified portfolio of franchises with as little as $500. Backed by Chicago Ventures, his platform aims to create passive income streams for investors.

                                                                                              Worst investment ever

                                                                                              In 2013, after Kenny graduated college, he became a financial advisor at Merrill Lynch in San Francisco. At the time, American Airlines and US Airways merged. The Justice Department challenged the merger, and both stocks plummeted. US Airways stocks went from $2.50 to about a quarter per share. Kenny had a bit of knowledge of the aviation industry from his pilot brother. So Kenny believed that the government would eventually allow the merger. He threw every nickel and dime he had at those stocks. As Kenny had predicted, the deal went through, and the stock went up to $12. It was an absolute home run for this young graduate.

                                                                                              Kenny was feeling very proud and excited about his next big investment. He talked to another financial advisor, a friend of his, who asked him if he had heard of AMD. Kenny hadn’t heard of it but was curious to know more. The friend told him about the world of processors and microchips, which Kenny found fascinating.

                                                                                              Though Kenny didn’t understand most of what the friend was saying, he was interested in the investment bit. He bought the AMD stock at $4. About a year later, the stock went down to $2.50. Kenny panicked and sold his AMD stocks. The stock is trading at over $100 today.

                                                                                              Lessons learned

                                                                                              • Before you invest, think about how much you’re willing to lose, what your time horizon is, and what your maximum loss might be.
                                                                                              • Educate yourself about what you want to invest in.
                                                                                              • Pick an investment style, and stick with it.
                                                                                              • Outsource what you don’t know to professionals who know those spaces better.
                                                                                              
                                                                                              

                                                                                              Andrew’s takeaways

                                                                                              • Build a diversified portfolio either of individual stocks or an index.
                                                                                              • Stop and think about how you will build the habit of learning.
                                                                                              
                                                                                              

                                                                                              Actionable advice

                                                                                              Do not invest in anything you have not become fully educated in.

                                                                                              Kenny’s recommendations

                                                                                              If you’re interested in the franchise world, FranShares has created an investor guide to help people get educated on franchises. Kenny also recommends subscribing to the ExecSum newsletter by the financial meme group Litquidity. The daily newsletter curates major news from Wall Street to Silicon Valley, with a touch of humor and memes.

                                                                                              No.1 goal for the next 12 months

                                                                                              Kenny’s number one goal for the next 12 months is to bring on another 10+ franchise brands and get FranShares to 100 million in gross investment volume.

                                                                                              Parting words

                                                                                               

                                                                                              “Keep an open eye; you never know what’s good until you research it. I think people like to hop on the ball that’s already rolling instead of rolling up their own.”

                                                                                              Kenny Rose

                                                                                               

                                                                                              [spp-transcript]

                                                                                               

                                                                                              Connect with Kenny Rose

                                                                                              • LinkedIn
                                                                                              • Twitter
                                                                                              • Facebook
                                                                                              • Instagram
                                                                                              • YouTube
                                                                                              • Website
                                                                                              
                                                                                              

                                                                                              Andrew’s books

                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                              • My Worst Investment Ever
                                                                                              • 9 Valuation Mistakes and How to Avoid Them
                                                                                              • Transform Your Business with Dr.Deming’s 14 Points
                                                                                              
                                                                                              

                                                                                              Andrew’s online programs

                                                                                              • Valuation Master Class
                                                                                              • The Become a Better Investor Community
                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                              • Finance Made Ridiculously Simple
                                                                                              • FVMR Investing: Quantamental Investing Across the World
                                                                                              • Become a Great Presenter and Increase Your Influence
                                                                                              • Transform Your Business with Dr. Deming’s 14 Points
                                                                                              • Achieve Your Goals
                                                                                              
                                                                                              

                                                                                              Connect with Andrew Stotz:

                                                                                              • astotz.com
                                                                                              • LinkedIn
                                                                                              • Facebook
                                                                                              • Instagram
                                                                                              • Threads
                                                                                              • Twitter
                                                                                              • YouTube
                                                                                              • My Worst Investment Ever Podcast
                                                                                              
                                                                                              ]]>BIO: Kenny Rose is the Chicago-based founder and CEO of FranShares, a platform that democratizes franchise investing.

                                                                                              STORY: Kenny invested in an aviation stock and hit the jackpot. Feeling lucky, he invested in a company dealing with processors and microchips, an industry he knew nothing about. He bought the stock at $4. About a year later, the stock went down to $2.50. Kenny panicked and sold his stocks. The stock is trading at over $100 today.

                                                                                              LEARNING: Before you invest, think about how much you’re willing to lose, what your time horizon is, and what your maximum loss might be. Educate yourself about what you want to invest in. Outsource what you don’t know to professionals who know those spaces better.

                                                                                               

                                                                                              “Be educated, pick an investment style you know, and stick with it. Outsource what you don’t know to professionals who know those spaces better.”

                                                                                              Kenny Rose

                                                                                               

                                                                                              Guest profile

                                                                                              Kenny Rose is the Chicago-based founder and CEO of FranShares, a platform that democratizes franchise investing. With over a decade of experience in the franchise industry, Kenny has worked with over 600 franchise brands in more than 100 industries. He is an expert on franchise evaluation and has helped individuals identify the best ways to deploy capital into franchise ownership to maximize return on investment and operations.

                                                                                              Kenny founded FranShares to allow individuals to invest in a diversified portfolio of franchises with as little as $500. Backed by Chicago Ventures, his platform aims to create passive income streams for investors.

                                                                                              Worst investment ever

                                                                                              In 2013, after Kenny graduated college, he became a financial advisor at Merrill Lynch in San Francisco. At the time, American Airlines and US Airways merged. The Justice Department challenged the merger, and both stocks plummeted. US Airways stocks went from $2.50 to about a quarter per share. Kenny had a bit of knowledge of the aviation industry from his pilot brother. So Kenny believed that the government would eventually allow the merger. He threw every nickel and dime he had at those stocks. As Kenny had predicted, the deal went through, and the stock went up to $12. It was an absolute home run for this young graduate.

                                                                                              Kenny was feeling very proud and excited about his next big investment. He talked to another financial advisor, a friend of his, who asked him if he had heard of AMD. Kenny hadn’t heard of it but was curious to know more. The friend told him about the world of processors and microchips, which Kenny found fascinating.

                                                                                              Though Kenny didn’t understand most of what the friend was saying, he was interested in the investment bit. He bought the AMD stock at $4. About a year later, the stock went down to $2.50. Kenny panicked and sold his AMD stocks. The stock is trading at over $100 today.

                                                                                              Lessons learned

                                                                                              • Before you invest, think about how much you’re willing to lose, what your time horizon is, and what your maximum loss might be.
                                                                                              • Educate yourself about what you want to invest in.
                                                                                              • Pick an investment style, and stick with it.
                                                                                              • Outsource what you don’t know to professionals who know those spaces better.
                                                                                              
                                                                                              

                                                                                              Andrew’s takeaways

                                                                                              • Build a diversified portfolio either of individual stocks or an index.
                                                                                              • Stop and think about how you will build the habit of learning.
                                                                                              
                                                                                              

                                                                                              Actionable advice

                                                                                              Do not invest in anything you have not become fully educated in.

                                                                                              Kenny’s recommendations

                                                                                              If you’re interested in the franchise world, FranShares has created an investor guide to help people get educated on franchises. Kenny also recommends subscribing to the ExecSum newsletter by the financial meme group Litquidity. The daily newsletter curates major news from Wall Street to Silicon Valley, with a touch of humor and memes.

                                                                                              No.1 goal for the next 12 months

                                                                                              Kenny’s number one goal for the next 12 months is to bring on another 10+ franchise brands and get FranShares to 100 million in gross investment volume.

                                                                                              Parting words

                                                                                               

                                                                                              “Keep an open eye; you never know what’s good until you research it. I think people like to hop on the ball that’s already rolling instead of rolling up their own.”

                                                                                              Kenny Rose

                                                                                               

                                                                                              [spp-transcript]

                                                                                               

                                                                                              Connect with Kenny Rose

                                                                                              • LinkedIn
                                                                                              • Twitter
                                                                                              • Facebook
                                                                                              • Instagram
                                                                                              • YouTube
                                                                                              • Website
                                                                                              
                                                                                              

                                                                                              Andrew’s books

                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                              • My Worst Investment Ever
                                                                                              • 9 Valuation Mistakes and How to Avoid Them
                                                                                              • Transform Your Business with Dr.Deming’s 14 Points
                                                                                              
                                                                                              

                                                                                              Andrew’s online programs

                                                                                              • Valuation Master Class
                                                                                              • The Become a Better Investor Community
                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                              • Finance Made Ridiculously Simple
                                                                                              • FVMR Investing: Quantamental Investing Across the World
                                                                                              • Become a Great Presenter and Increase Your Influence
                                                                                              • Transform Your Business with Dr. Deming’s 14 Points
                                                                                              • Achieve Your Goals
                                                                                              
                                                                                              

                                                                                              Connect with Andrew Stotz:

                                                                                              • astotz.com
                                                                                              • LinkedIn
                                                                                              • Facebook
                                                                                              • Instagram
                                                                                              • Threads
                                                                                              • Twitter
                                                                                              • YouTube
                                                                                              • My Worst Investment Ever Podcast
                                                                                              
                                                                                              ]]>4e4a199b-be41-4594-a746-b7341dc7469cMon, 13 Nov 2023 06:00:00 +070037:07falsefullISMS 34: Larry Swedroe – Consider All Hidden Costs Before You InvestIn this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Today, they discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this eleventh series, they discuss mistake number 20: Do You Only Consider the Operating Expense Ratio When Selecting a Mutual Fund? And mistake number 21: Do You Fail to Consider the Costs of an Investment Strategy?

                                                                                              LEARNING: Don’t focus solely on the operating expense ratio when buying a mutual fund; consider hidden costs, too. Always consider the costs of an investment strategy, such as bid-offer spreads, market impact costs, taxes, etc.

                                                                                               

                                                                                              “Successful active management, as I like to explain it, sews the seeds of its own destruction.”

                                                                                              Larry Swedroe

                                                                                               

                                                                                              In this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Larry is the head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                                              Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this eleventh series, they discuss mistake number 20: Do You Only Consider the Operating Expense Ratio When Selecting a Mutual Fund? And mistake number 21: Do You Fail to Consider the Costs of an Investment Strategy?

                                                                                              Did you miss out on previous mistakes? Check them out:

                                                                                              • ISMS 8: Larry Swedroe – Are You Overconfident in Your Skills?
                                                                                              • ISMS 17: Larry Swedroe – Do You Project Recent Trends Indefinitely Into the Future?
                                                                                              • ISMS 20: Larry Swedroe – Do You Extrapolate From Small Samples and Trust Your Intuition?
                                                                                              • ISMS 23: Larry Swedroe – Do You Allow Yourself to Be Influenced by Your Ego and Herd Mentality?
                                                                                              • ISMS 24: Larry Swedroe – Confusing Skill and Luck Can Stop You From Investing Wisely
                                                                                              • ISMS 25: Larry Swedroe – Admit Your Mistakes and Don’t Listen to Fake Experts
                                                                                              • ISMS 26: Larry Swedroe – Are You Subject to the Endowment Effect or the Hot Streak Fallacy?
                                                                                              • ISMS 27: Larry Swedroe – Familiar Doesn’t Make It Safe and You’re Not Playing With the House’s Money
                                                                                              • ISMS 29: Larry Swedroe – The Shiny Apple is Poisonous and Information is Not Knowledge
                                                                                              • ISMS 30: Larry Swedroe – Do You Believe Your Fortune Is in the Stars or Rely on Misleading Information?
                                                                                              
                                                                                              

                                                                                              Mistake number 20: Do you only consider the operating expense ratio when selecting a mutual fund?

                                                                                              According to Larry, a lot of investors are aware that there is at least some relationship between expense ratios and returns of mutual funds. Sadly, too many people ignore that because they believe that active management will likely add value despite the evidence against it.

                                                                                              Further, many investors only consider the operating expense ratio when selecting a mutual fund. Larry says this is just one of many costs associated with investing and often not the most significant. He emphasizes that investors should look out for other hidden costs, such as:

                                                                                              • The “cost of cash” – when a fund holds cash instead of being fully invested.
                                                                                              • Trading expenses such as commissions and market impact costs.
                                                                                              • Taxes on gains.
                                                                                              
                                                                                              

                                                                                              These costs can significantly impact returns, with high turnover and tax inefficiency leading to lower after-tax returns. So, don’t focus solely on the operating expense ratio.

                                                                                              If you’re trying to decide whether to buy an ETF or a mutual fund, Larry says the rule is for a taxable account: buy the ETF because it’s more tax efficient. If you’re in a tax-advantaged account, buy the mutual fund because you don’t pay a bid-offer spread, and you don’t care about the tax efficiency in the fund. Also, if you’re going to buy an ETF, don’t trade first thing in the morning or last thing at the end of the day. You can get really screwed by price movements. Trade at the middle of the day.

                                                                                              Mistake number 21: Do you fail to consider the costs of an investment strategy?

                                                                                              Investors are often drawn to market-beating investment strategies but should exercise caution. Larry notes that when you see returns on a strategy, they often don’t include costs. What you usually see is a strategy that encourages you to buy stocks by looking at the day’s closing prices. Then, you sell at the closing price later. Such a strategy ignores bid-offer spreads, market impact costs, taxes, etc. Moreover, implementing such a strategy incurs costs that can erode your returns.

                                                                                              Larry adds that most people think that the past performance of active funds predicts future performance. As successful funds see their assets under management (AUM) grow, investors might think it’s a good sign. However, research shows there are diseconomies of scale in active management because the bigger the funds get, the higher their market impact costs go. Therefore, you should always remember that past performance does not always indicate future success, and some strategies may be based on luck rather than skill.

                                                                                              About Larry Swedroe

                                                                                              Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                                              Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                                              Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                                              Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                                               

                                                                                              [spp-transcript]

                                                                                               

                                                                                              Connect with Larry Swedroe

                                                                                              • LinkedIn
                                                                                              • Twitter
                                                                                              • Website
                                                                                              • Books
                                                                                              
                                                                                              

                                                                                              Andrew’s books

                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                              • My Worst Investment Ever
                                                                                              • 9 Valuation Mistakes and...]]>In this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Today, they discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this eleventh series, they discuss mistake number 20: Do You Only Consider the Operating Expense Ratio When Selecting a Mutual Fund? And mistake number 21: Do You Fail to Consider the Costs of an Investment Strategy?

                                                                                                LEARNING: Don’t focus solely on the operating expense ratio when buying a mutual fund; consider hidden costs, too. Always consider the costs of an investment strategy, such as bid-offer spreads, market impact costs, taxes, etc.

                                                                                                 

                                                                                                “Successful active management, as I like to explain it, sews the seeds of its own destruction.”

                                                                                                Larry Swedroe

                                                                                                 

                                                                                                In this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Larry is the head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                                                Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this eleventh series, they discuss mistake number 20: Do You Only Consider the Operating Expense Ratio When Selecting a Mutual Fund? And mistake number 21: Do You Fail to Consider the Costs of an Investment Strategy?

                                                                                                Did you miss out on previous mistakes? Check them out:

                                                                                                • ISMS 8: Larry Swedroe – Are You Overconfident in Your Skills?
                                                                                                • ISMS 17: Larry Swedroe – Do You Project Recent Trends Indefinitely Into the Future?
                                                                                                • ISMS 20: Larry Swedroe – Do You Extrapolate From Small Samples and Trust Your Intuition?
                                                                                                • ISMS 23: Larry Swedroe – Do You Allow Yourself to Be Influenced by Your Ego and Herd Mentality?
                                                                                                • ISMS 24: Larry Swedroe – Confusing Skill and Luck Can Stop You From Investing Wisely
                                                                                                • ISMS 25: Larry Swedroe – Admit Your Mistakes and Don’t Listen to Fake Experts
                                                                                                • ISMS 26: Larry Swedroe – Are You Subject to the Endowment Effect or the Hot Streak Fallacy?
                                                                                                • ISMS 27: Larry Swedroe – Familiar Doesn’t Make It Safe and You’re Not Playing With the House’s Money
                                                                                                • ISMS 29: Larry Swedroe – The Shiny Apple is Poisonous and Information is Not Knowledge
                                                                                                • ISMS 30: Larry Swedroe – Do You Believe Your Fortune Is in the Stars or Rely on Misleading Information?
                                                                                                
                                                                                                

                                                                                                Mistake number 20: Do you only consider the operating expense ratio when selecting a mutual fund?

                                                                                                According to Larry, a lot of investors are aware that there is at least some relationship between expense ratios and returns of mutual funds. Sadly, too many people ignore that because they believe that active management will likely add value despite the evidence against it.

                                                                                                Further, many investors only consider the operating expense ratio when selecting a mutual fund. Larry says this is just one of many costs associated with investing and often not the most significant. He emphasizes that investors should look out for other hidden costs, such as:

                                                                                                • The “cost of cash” – when a fund holds cash instead of being fully invested.
                                                                                                • Trading expenses such as commissions and market impact costs.
                                                                                                • Taxes on gains.
                                                                                                
                                                                                                

                                                                                                These costs can significantly impact returns, with high turnover and tax inefficiency leading to lower after-tax returns. So, don’t focus solely on the operating expense ratio.

                                                                                                If you’re trying to decide whether to buy an ETF or a mutual fund, Larry says the rule is for a taxable account: buy the ETF because it’s more tax efficient. If you’re in a tax-advantaged account, buy the mutual fund because you don’t pay a bid-offer spread, and you don’t care about the tax efficiency in the fund. Also, if you’re going to buy an ETF, don’t trade first thing in the morning or last thing at the end of the day. You can get really screwed by price movements. Trade at the middle of the day.

                                                                                                Mistake number 21: Do you fail to consider the costs of an investment strategy?

                                                                                                Investors are often drawn to market-beating investment strategies but should exercise caution. Larry notes that when you see returns on a strategy, they often don’t include costs. What you usually see is a strategy that encourages you to buy stocks by looking at the day’s closing prices. Then, you sell at the closing price later. Such a strategy ignores bid-offer spreads, market impact costs, taxes, etc. Moreover, implementing such a strategy incurs costs that can erode your returns.

                                                                                                Larry adds that most people think that the past performance of active funds predicts future performance. As successful funds see their assets under management (AUM) grow, investors might think it’s a good sign. However, research shows there are diseconomies of scale in active management because the bigger the funds get, the higher their market impact costs go. Therefore, you should always remember that past performance does not always indicate future success, and some strategies may be based on luck rather than skill.

                                                                                                About Larry Swedroe

                                                                                                Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                                                Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                                                Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                                                Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                                                 

                                                                                                [spp-transcript]

                                                                                                 

                                                                                                Connect with Larry Swedroe

                                                                                                • LinkedIn
                                                                                                • Twitter
                                                                                                • Website
                                                                                                • Books
                                                                                                
                                                                                                

                                                                                                Andrew’s books

                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                • My Worst Investment Ever
                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                
                                                                                                

                                                                                                Andrew’s online programs

                                                                                                • Valuation Master Class
                                                                                                • The Become a Better Investor Community
                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                • Finance Made Ridiculously Simple
                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                • Achieve Your Goals
                                                                                                
                                                                                                

                                                                                                Connect with Andrew Stotz:

                                                                                                • astotz.com
                                                                                                • LinkedIn
                                                                                                • Facebook
                                                                                                • Instagram
                                                                                                • Twitter
                                                                                                • YouTube
                                                                                                • My Worst Investment Ever Podcast
                                                                                                
                                                                                                

                                                                                                Further reading mentioned

                                                                                                • Larry Swedroe and RC Balaban, Investment Mistakes Even Smart Investors Make and How to Avoid Them
                                                                                                • Philip E. Tetlock, Expert Political Judgment: How Good Is It? How Can We Know?
                                                                                                • Gary Belsky and Thomas Gilovich, Why Smart People Make Big Money Mistakes and How to Correct Them: Lessons from the Life-Changing Science of Behavioral Economics
                                                                                                • Larry Swedroe, Think, Act, and Invest Like Warren Buffett: The Winning Strategy to Help You Achieve Your Financial and Life Goals
                                                                                                
                                                                                                ]]>a90ddc75-b6a5-4a33-aef5-257aeb6f6c33Thu, 09 Nov 2023 06:00:00 +070033:25falsefullChong Ser Jing – Pay Attention to What Drives Business ResultsBIO: Chong Ser Jing is the Portfolio Manager and Co-Founder of Compounder Fund, an investment fund that invests in stocks around the world.

                                                                                                STORY: In October 2010, Ser Jing bought six stocks. Two of these were companies in the oil industry. By the time he was selling these stocks, he had a loss of 77% and 31% from the two companies, respectively.

                                                                                                LEARNING: Some sectors may not be worth investing in because they tend to historically generate poor returns on invested capital. Pay careful attention to the drivers of a company’s business results. Understand the difference between internal and external drivers.

                                                                                                 

                                                                                                “There are companies whose business fortunes do not depend on the price movement of commodities. And then there are those who do. That’s a really important distinction.”

                                                                                                Chong Ser Jing

                                                                                                 

                                                                                                Guest profile

                                                                                                Chong Ser Jing is the Portfolio Manager and Co-Founder of Compounder Fund, an investment fund that invests in stocks around the world. Ser Jing graduated with an engineering degree in 2012, but having been bitten by the investing bug since he was in his late teens, he decided to pursue investing as a career. From January 2013 to October 2019, Ser Jing served in Motley Fool Singapore as a writer as well as a co-leader of the investing team. One of his career highlights with Fool Singapore was to help its flagship investment newsletter outperform a global stock market benchmark by nearly 2x over a 3.5-year period. Besides running Compounder Fund today with his co-founder Jeremy Chia, both of them also have an investing blog, The Good Investors, where they share their thoughts about investing and life.

                                                                                                Worst investment ever

                                                                                                In October 2010, Ser Jing bought six stocks. Two of these were companies in the oil industry. One company owned oil rigs, while the other supplied parts and equipment that helped keep oil rigs running. By the time he was selling these stocks, he had a loss of 77% and 31% from the two companies, respectively.

                                                                                                Ser Jing considers these two stocks his worst investment ever because he had no idea what he was doing. He invested in them because he wanted to be diversified according to sectors. Ser Jing believed that oil and gas was a sector that was worth investing in since the oil demand would likely remain strong for a long time. His view was actually right. But, in hindsight, he was only right to a small extent and wrong in two critical areas.

                                                                                                First, some sectors may not be worth investing in in the long run because their economic characteristics are poor. The second thing is that the global oil demand grew quite strongly from 2010 to 2016.

                                                                                                The annual oil consumption increased from around 86 million barrels to about 97 million barrels in that period. But oil prices also fell significantly over that over the same timeframe. So, Ser Jing could not predict the oil price level. When he invested in the two companies, he completely missed out on the crucial fact that the oil price would have an outsized impact on both companies’ fortunes.

                                                                                                Lessons learned

                                                                                                • Some sectors may not be worth investing in because they tend to historically generate poor returns on invested capital.
                                                                                                • Pay careful attention to the drivers of a company’s business results.
                                                                                                
                                                                                                

                                                                                                Andrew’s takeaways

                                                                                                • Understand the difference between internal and external drivers.
                                                                                                
                                                                                                

                                                                                                Actionable advice

                                                                                                Look deeply at what has historically driven the price of a commodity if you’re trying to invest in a company whose business results depend on the commodity’s price.

                                                                                                Ser Jing’s recommendations

                                                                                                Ser Jing recommends Robert Shiller’s historical database on US interest rates, US inflation, validation price, and dividend data for US stocks. The database is an incredible trove of data for investors to learn about market history to have some base rates about how stocks, interest rates, and inflation have performed in the past.

                                                                                                No.1 goal for the next 12 months

                                                                                                Ser Jing has no goals for the next 12 months or the future. He has processes in place that will make him a better person and a better investor.

                                                                                                Parting words

                                                                                                 

                                                                                                “Most people will think about their worst investments as the stocks they bought but fell tremendously in price, maybe because of a high initial valuation. But I think a timing component also needs to be brought into the picture when thinking about this issue.”

                                                                                                Chong Ser Jing

                                                                                                 

                                                                                                [spp-transcript]

                                                                                                 

                                                                                                Connect with Chong Ser Jing 

                                                                                                • LinkedIn
                                                                                                • Blog
                                                                                                • Website
                                                                                                
                                                                                                

                                                                                                Andrew’s books

                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                • My Worst Investment Ever
                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                
                                                                                                

                                                                                                Andrew’s online programs

                                                                                                • Valuation Master Class
                                                                                                • The Become a Better Investor Community
                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                • Finance Made Ridiculously Simple
                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                • Achieve Your Goals
                                                                                                
                                                                                                

                                                                                                Connect with Andrew Stotz:

                                                                                                • astotz.com
                                                                                                • LinkedIn
                                                                                                • Facebook
                                                                                                • Instagram
                                                                                                • Threads
                                                                                                • Twitter
                                                                                                • YouTube
                                                                                                • My Worst Investment Ever Podcast
                                                                                                
                                                                                                ]]>BIO: Chong Ser Jing is the Portfolio Manager and Co-Founder of Compounder Fund, an investment fund that invests in stocks around the world.

                                                                                                STORY: In October 2010, Ser Jing bought six stocks. Two of these were companies in the oil industry. By the time he was selling these stocks, he had a loss of 77% and 31% from the two companies, respectively.

                                                                                                LEARNING: Some sectors may not be worth investing in because they tend to historically generate poor returns on invested capital. Pay careful attention to the drivers of a company’s business results. Understand the difference between internal and external drivers.

                                                                                                 

                                                                                                “There are companies whose business fortunes do not depend on the price movement of commodities. And then there are those who do. That’s a really important distinction.”

                                                                                                Chong Ser Jing

                                                                                                 

                                                                                                Guest profile

                                                                                                Chong Ser Jing is the Portfolio Manager and Co-Founder of Compounder Fund, an investment fund that invests in stocks around the world. Ser Jing graduated with an engineering degree in 2012, but having been bitten by the investing bug since he was in his late teens, he decided to pursue investing as a career. From January 2013 to October 2019, Ser Jing served in Motley Fool Singapore as a writer as well as a co-leader of the investing team. One of his career highlights with Fool Singapore was to help its flagship investment newsletter outperform a global stock market benchmark by nearly 2x over a 3.5-year period. Besides running Compounder Fund today with his co-founder Jeremy Chia, both of them also have an investing blog, The Good Investors, where they share their thoughts about investing and life.

                                                                                                Worst investment ever

                                                                                                In October 2010, Ser Jing bought six stocks. Two of these were companies in the oil industry. One company owned oil rigs, while the other supplied parts and equipment that helped keep oil rigs running. By the time he was selling these stocks, he had a loss of 77% and 31% from the two companies, respectively.

                                                                                                Ser Jing considers these two stocks his worst investment ever because he had no idea what he was doing. He invested in them because he wanted to be diversified according to sectors. Ser Jing believed that oil and gas was a sector that was worth investing in since the oil demand would likely remain strong for a long time. His view was actually right. But, in hindsight, he was only right to a small extent and wrong in two critical areas.

                                                                                                First, some sectors may not be worth investing in in the long run because their economic characteristics are poor. The second thing is that the global oil demand grew quite strongly from 2010 to 2016.

                                                                                                The annual oil consumption increased from around 86 million barrels to about 97 million barrels in that period. But oil prices also fell significantly over that over the same timeframe. So, Ser Jing could not predict the oil price level. When he invested in the two companies, he completely missed out on the crucial fact that the oil price would have an outsized impact on both companies’ fortunes.

                                                                                                Lessons learned

                                                                                                • Some sectors may not be worth investing in because they tend to historically generate poor returns on invested capital.
                                                                                                • Pay careful attention to the drivers of a company’s business results.
                                                                                                
                                                                                                

                                                                                                Andrew’s takeaways

                                                                                                • Understand the difference between internal and external drivers.
                                                                                                
                                                                                                

                                                                                                Actionable advice

                                                                                                Look deeply at what has historically driven the price of a commodity if you’re trying to invest in a company whose business results depend on the commodity’s price.

                                                                                                Ser Jing’s recommendations

                                                                                                Ser Jing recommends Robert Shiller’s historical database on US interest rates, US inflation, validation price, and dividend data for US stocks. The database is an incredible trove of data for investors to learn about market history to have some base rates about how stocks, interest rates, and inflation have performed in the past.

                                                                                                No.1 goal for the next 12 months

                                                                                                Ser Jing has no goals for the next 12 months or the future. He has processes in place that will make him a better person and a better investor.

                                                                                                Parting words

                                                                                                 

                                                                                                “Most people will think about their worst investments as the stocks they bought but fell tremendously in price, maybe because of a high initial valuation. But I think a timing component also needs to be brought into the picture when thinking about this issue.”

                                                                                                Chong Ser Jing

                                                                                                 

                                                                                                [spp-transcript]

                                                                                                 

                                                                                                Connect with Chong Ser Jing 

                                                                                                • LinkedIn
                                                                                                • Blog
                                                                                                • Website
                                                                                                
                                                                                                

                                                                                                Andrew’s books

                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                • My Worst Investment Ever
                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                
                                                                                                

                                                                                                Andrew’s online programs

                                                                                                • Valuation Master Class
                                                                                                • The Become a Better Investor Community
                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                • Finance Made Ridiculously Simple
                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                • Achieve Your Goals
                                                                                                
                                                                                                

                                                                                                Connect with Andrew Stotz:

                                                                                                • astotz.com
                                                                                                • LinkedIn
                                                                                                • Facebook
                                                                                                • Instagram
                                                                                                • Threads
                                                                                                • Twitter
                                                                                                • YouTube
                                                                                                • My Worst Investment Ever Podcast
                                                                                                
                                                                                                ]]>bc750604-f14e-4d73-ab6b-04d644ec93e1Wed, 08 Nov 2023 06:00:00 +070040:25falsefullJames M. Dahle – Don’t Buy More Insurance Than You NeedBIO: James M. Dahle, MD, is a practicing emergency physician who took an interest in personal finance and investing in residency after getting ripped off by every financial professional he came into contact with. He founded The White Coat Investor in 2011 to help fellow docs get a fair shake on Wall Street.

                                                                                                STORY: James got sold a whole life insurance policy in medical school. He invested in it, thinking it would be a good option, only to realize seven years later that it was not. When he pulled out of the policy, he lost 33% of the premiums he had paid.

                                                                                                LEARNING: You must understand anything you buy. Don’t buy more insurance than you need. Focus on one catastrophe-related insurance product that’s reasonable.

                                                                                                 

                                                                                                “Insurance is expensive, so don’t buy more than you need.”

                                                                                                James M. Dahle

                                                                                                 

                                                                                                Guest profile

                                                                                                James M. Dahle, MD, is a practicing emergency physician who took an interest in personal finance and investing in residency after getting ripped off by every financial professional he came into contact with. He founded The White Coat Investor in 2011 to help his fellow docs get a fair shake on Wall Street.

                                                                                                Worst investment ever

                                                                                                When James was a medical student with minimal income, a friend interning with a large mutual life insurance company convinced him to buy a whole life insurance policy.

                                                                                                Looking back, what James really needed as far as insurance went was a term life insurance policy. At that point, he was married with no kids, and his wife was designing her life around his financial future as a doctor. The insurance policy James invested in, partially as an investment, was a whole life insurance policy. He held on to that policy for about seven years when he realized this was not a good deal for him. Not only was it not the insurance James needed, but it was a lousy investment.

                                                                                                By the time James surrendered that policy, his cumulative return was minus 33% of the premiums he had paid. So he walked away with only two-thirds of the money he had paid into it.

                                                                                                Lessons learned

                                                                                                • You must understand anything you buy, especially if it has a long commitment.
                                                                                                • Don’t buy more insurance than you need.
                                                                                                
                                                                                                

                                                                                                Andrew’s takeaways

                                                                                                • Focus on one catastrophe-related insurance product that’s reasonable, find the best price on it, and set it up to protect your family against that catastrophe. Then, build a solid investment plan with the remainder of your money.
                                                                                                
                                                                                                

                                                                                                Actionable advice

                                                                                                While you don’t want to get paralysis analysis, you do need to take the time to understand what you’re buying, whether it’s an insurance policy or an investment. You need to know how it works and how it’s likely to perform over the long term so you’re not disappointed and end up bailing out.

                                                                                                James’s recommendations

                                                                                                James recommends evaluatelifeinsurance.org if you’re already in a whole life insurance policy and trying to decide whether it’s worth keeping it, even though maybe you shouldn’t have bought it originally. He also recommends the Fire Your Financial Advisor, designed to help you write a financial plan to go from zero to 60.

                                                                                                No.1 goal for the next 12 months

                                                                                                James’s number one goal for the next 12 months is to help as many doctors as possible reach a situation where they feel good about their finances, whether that’s achieving financial independence or just feeling like they have their financial ducks in a row. James wants them to be able to quit worrying about their money so they can concentrate on the things that matter most in life.

                                                                                                Parting words

                                                                                                 

                                                                                                “Keep your head up and your shoulders back. You’ve got this.”

                                                                                                James M. Dahle

                                                                                                 

                                                                                                [spp-transcript]

                                                                                                 

                                                                                                Connect with James M. Dahle

                                                                                                • LinkedIn
                                                                                                • Twitter
                                                                                                • Instagram
                                                                                                • Facebook
                                                                                                • YouTube
                                                                                                • Website
                                                                                                • Books
                                                                                                • Podcast
                                                                                                
                                                                                                

                                                                                                Andrew’s books

                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                • My Worst Investment Ever
                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                
                                                                                                

                                                                                                Andrew’s online programs

                                                                                                • Valuation Master Class
                                                                                                • The Become a Better Investor Community
                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                • Finance Made Ridiculously Simple
                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                • Achieve Your Goals
                                                                                                
                                                                                                

                                                                                                Connect with Andrew Stotz:

                                                                                                • astotz.com
                                                                                                • LinkedIn
                                                                                                • Facebook
                                                                                                • Instagram
                                                                                                • Threads
                                                                                                • Twitter
                                                                                                • YouTube
                                                                                                • My Worst Investment Ever Podcast
                                                                                                
                                                                                                ]]>BIO: James M. Dahle, MD, is a practicing emergency physician who took an interest in personal finance and investing in residency after getting ripped off by every financial professional he came into contact with. He founded The White Coat Investor in 2011 to help fellow docs get a fair shake on Wall Street.

                                                                                                STORY: James got sold a whole life insurance policy in medical school. He invested in it, thinking it would be a good option, only to realize seven years later that it was not. When he pulled out of the policy, he lost 33% of the premiums he had paid.

                                                                                                LEARNING: You must understand anything you buy. Don’t buy more insurance than you need. Focus on one catastrophe-related insurance product that’s reasonable.

                                                                                                 

                                                                                                “Insurance is expensive, so don’t buy more than you need.”

                                                                                                James M. Dahle

                                                                                                 

                                                                                                Guest profile

                                                                                                James M. Dahle, MD, is a practicing emergency physician who took an interest in personal finance and investing in residency after getting ripped off by every financial professional he came into contact with. He founded The White Coat Investor in 2011 to help his fellow docs get a fair shake on Wall Street.

                                                                                                Worst investment ever

                                                                                                When James was a medical student with minimal income, a friend interning with a large mutual life insurance company convinced him to buy a whole life insurance policy.

                                                                                                Looking back, what James really needed as far as insurance went was a term life insurance policy. At that point, he was married with no kids, and his wife was designing her life around his financial future as a doctor. The insurance policy James invested in, partially as an investment, was a whole life insurance policy. He held on to that policy for about seven years when he realized this was not a good deal for him. Not only was it not the insurance James needed, but it was a lousy investment.

                                                                                                By the time James surrendered that policy, his cumulative return was minus 33% of the premiums he had paid. So he walked away with only two-thirds of the money he had paid into it.

                                                                                                Lessons learned

                                                                                                • You must understand anything you buy, especially if it has a long commitment.
                                                                                                • Don’t buy more insurance than you need.
                                                                                                
                                                                                                

                                                                                                Andrew’s takeaways

                                                                                                • Focus on one catastrophe-related insurance product that’s reasonable, find the best price on it, and set it up to protect your family against that catastrophe. Then, build a solid investment plan with the remainder of your money.
                                                                                                
                                                                                                

                                                                                                Actionable advice

                                                                                                While you don’t want to get paralysis analysis, you do need to take the time to understand what you’re buying, whether it’s an insurance policy or an investment. You need to know how it works and how it’s likely to perform over the long term so you’re not disappointed and end up bailing out.

                                                                                                James’s recommendations

                                                                                                James recommends evaluatelifeinsurance.org if you’re already in a whole life insurance policy and trying to decide whether it’s worth keeping it, even though maybe you shouldn’t have bought it originally. He also recommends the Fire Your Financial Advisor, designed to help you write a financial plan to go from zero to 60.

                                                                                                No.1 goal for the next 12 months

                                                                                                James’s number one goal for the next 12 months is to help as many doctors as possible reach a situation where they feel good about their finances, whether that’s achieving financial independence or just feeling like they have their financial ducks in a row. James wants them to be able to quit worrying about their money so they can concentrate on the things that matter most in life.

                                                                                                Parting words

                                                                                                 

                                                                                                “Keep your head up and your shoulders back. You’ve got this.”

                                                                                                James M. Dahle

                                                                                                 

                                                                                                [spp-transcript]

                                                                                                 

                                                                                                Connect with James M. Dahle

                                                                                                • LinkedIn
                                                                                                • Twitter
                                                                                                • Instagram
                                                                                                • Facebook
                                                                                                • YouTube
                                                                                                • Website
                                                                                                • Books
                                                                                                • Podcast
                                                                                                
                                                                                                

                                                                                                Andrew’s books

                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                • My Worst Investment Ever
                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                
                                                                                                

                                                                                                Andrew’s online programs

                                                                                                • Valuation Master Class
                                                                                                • The Become a Better Investor Community
                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                • Finance Made Ridiculously Simple
                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                • Achieve Your Goals
                                                                                                
                                                                                                

                                                                                                Connect with Andrew Stotz:

                                                                                                • astotz.com
                                                                                                • LinkedIn
                                                                                                • Facebook
                                                                                                • Instagram
                                                                                                • Threads
                                                                                                • Twitter
                                                                                                • YouTube
                                                                                                • My Worst Investment Ever Podcast
                                                                                                
                                                                                                ]]>454d5ddf-9dc8-480f-b8ac-f58e324cf208Mon, 06 Nov 2023 06:00:00 +070024:47falsefullHarley Bassman – Sizing Is More Important Than Entry LevelBIO: Harley Bassman is an industry thought leader and commentator on macroeconomic issues spanning decades.

                                                                                                STORY: In 2019, Harley bought some calls and sold some puts on Citibank stock for a cost strategy. He believed the stocks would increase because all its peers were trading above their book value. When COVID came, the stocks went south, causing Harley to make his biggest loss ever.

                                                                                                LEARNING: When something trades well below what you think its value is, consider why that’s the case. Size the investment.

                                                                                                 

                                                                                                “Forget timing; size the investment. Pick the size such that you’ll make enough if you’re right, and if you’re wrong, you won’t get wiped out.”

                                                                                                Harley Bassman

                                                                                                 

                                                                                                Guest profile

                                                                                                Harley Bassman is an industry thought leader and commentator on macroeconomic issues spanning decades. He spent 26 years at Merrill Lynch. From 2014 to 2017, Harley was an Executive VP and Portfolio Manager at PIMCO. In 2011, he joined Credit Suisse’s Global Rates. In 2006, he built the RateLab, a full spectrum US Rates Trading Desk Strategy Group.

                                                                                                Presently, Harley is a Managing Partner at Simplify Asset Management. He continues to pen an episodic macroeconomic Commentary as well as manage a “hedge fund of one.”

                                                                                                Harley has a B.A. in management science from the University of California, San Diego, and an MBA in finance and marketing from the University of Chicago.

                                                                                                Worst investment ever

                                                                                                In 2019, Harley bought some calls and sold some puts on Citibank stock for a cost strategy. He believed the stocks would increase because all its peers were trading above their book value. Harley put more into this trade than he logically should have. He was hung up on the value construct and wasn’t thinking about why the stock traded under tangible.

                                                                                                When COVID came, the stocks went south, causing Harley to make his biggest loss ever.

                                                                                                Lessons learned

                                                                                                • When something trades well below what you think its value is, consider why that’s the case.
                                                                                                • Size the investment. When you make an investment, invest enough so that your gain can be worthwhile.
                                                                                                • Sizing is more critical than entry-level.
                                                                                                
                                                                                                

                                                                                                Andrew’s takeaways

                                                                                                • Be very careful when investing in banks because if their equity gets hit, the value of their assets could fall.
                                                                                                
                                                                                                

                                                                                                Actionable advice

                                                                                                Don’t fall into a value trap. Be careful of single names because there’s always a lottery effect that you can never predict.

                                                                                                Harley’s recommendations

                                                                                                Harley recommends reciting his Maven mantra: Number one, it’s always about character. Number two, it’s never different this time. And number three, you’re born, you live, and then you die. Prioritize your life.

                                                                                                No.1 goal for the next 12 months

                                                                                                Harley’s number one goal for the next 12 months is to focus and spend more time with his family.

                                                                                                Parting words

                                                                                                 

                                                                                                “Just be careful and stay safe.”

                                                                                                Harley Bassman

                                                                                                 

                                                                                                [spp-transcript]

                                                                                                 

                                                                                                Connect with Harley Bassman

                                                                                                • LinkedIn
                                                                                                • Twitter
                                                                                                • Blog
                                                                                                • Website
                                                                                                
                                                                                                

                                                                                                Andrew’s books

                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                • My Worst Investment Ever
                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                
                                                                                                

                                                                                                Andrew’s online programs

                                                                                                • Valuation Master Class
                                                                                                • The Become a Better Investor Community
                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                • Finance Made Ridiculously Simple
                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                • Achieve Your Goals
                                                                                                
                                                                                                

                                                                                                Connect with Andrew Stotz:

                                                                                                • astotz.com
                                                                                                • LinkedIn
                                                                                                • Facebook
                                                                                                • Instagram
                                                                                                • Threads
                                                                                                • Twitter
                                                                                                • YouTube
                                                                                                • My Worst Investment Ever Podcast
                                                                                                
                                                                                                ]]>BIO: Harley Bassman is an industry thought leader and commentator on macroeconomic issues spanning decades.

                                                                                                STORY: In 2019, Harley bought some calls and sold some puts on Citibank stock for a cost strategy. He believed the stocks would increase because all its peers were trading above their book value. When COVID came, the stocks went south, causing Harley to make his biggest loss ever.

                                                                                                LEARNING: When something trades well below what you think its value is, consider why that’s the case. Size the investment.

                                                                                                 

                                                                                                “Forget timing; size the investment. Pick the size such that you’ll make enough if you’re right, and if you’re wrong, you won’t get wiped out.”

                                                                                                Harley Bassman

                                                                                                 

                                                                                                Guest profile

                                                                                                Harley Bassman is an industry thought leader and commentator on macroeconomic issues spanning decades. He spent 26 years at Merrill Lynch. From 2014 to 2017, Harley was an Executive VP and Portfolio Manager at PIMCO. In 2011, he joined Credit Suisse’s Global Rates. In 2006, he built the RateLab, a full spectrum US Rates Trading Desk Strategy Group.

                                                                                                Presently, Harley is a Managing Partner at Simplify Asset Management. He continues to pen an episodic macroeconomic Commentary as well as manage a “hedge fund of one.”

                                                                                                Harley has a B.A. in management science from the University of California, San Diego, and an MBA in finance and marketing from the University of Chicago.

                                                                                                Worst investment ever

                                                                                                In 2019, Harley bought some calls and sold some puts on Citibank stock for a cost strategy. He believed the stocks would increase because all its peers were trading above their book value. Harley put more into this trade than he logically should have. He was hung up on the value construct and wasn’t thinking about why the stock traded under tangible.

                                                                                                When COVID came, the stocks went south, causing Harley to make his biggest loss ever.

                                                                                                Lessons learned

                                                                                                • When something trades well below what you think its value is, consider why that’s the case.
                                                                                                • Size the investment. When you make an investment, invest enough so that your gain can be worthwhile.
                                                                                                • Sizing is more critical than entry-level.
                                                                                                
                                                                                                

                                                                                                Andrew’s takeaways

                                                                                                • Be very careful when investing in banks because if their equity gets hit, the value of their assets could fall.
                                                                                                
                                                                                                

                                                                                                Actionable advice

                                                                                                Don’t fall into a value trap. Be careful of single names because there’s always a lottery effect that you can never predict.

                                                                                                Harley’s recommendations

                                                                                                Harley recommends reciting his Maven mantra: Number one, it’s always about character. Number two, it’s never different this time. And number three, you’re born, you live, and then you die. Prioritize your life.

                                                                                                No.1 goal for the next 12 months

                                                                                                Harley’s number one goal for the next 12 months is to focus and spend more time with his family.

                                                                                                Parting words

                                                                                                 

                                                                                                “Just be careful and stay safe.”

                                                                                                Harley Bassman

                                                                                                 

                                                                                                [spp-transcript]

                                                                                                 

                                                                                                Connect with Harley Bassman

                                                                                                • LinkedIn
                                                                                                • Twitter
                                                                                                • Blog
                                                                                                • Website
                                                                                                
                                                                                                

                                                                                                Andrew’s books

                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                • My Worst Investment Ever
                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                
                                                                                                

                                                                                                Andrew’s online programs

                                                                                                • Valuation Master Class
                                                                                                • The Become a Better Investor Community
                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                • Finance Made Ridiculously Simple
                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                • Achieve Your Goals
                                                                                                
                                                                                                

                                                                                                Connect with Andrew Stotz:

                                                                                                • astotz.com
                                                                                                • LinkedIn
                                                                                                • Facebook
                                                                                                • Instagram
                                                                                                • Threads
                                                                                                • Twitter
                                                                                                • YouTube
                                                                                                • My Worst Investment Ever Podcast
                                                                                                
                                                                                                ]]>d011b102-5c4f-4691-b8cb-eb051dbd4d47Thu, 02 Nov 2023 06:00:00 +070048:33falsefullMike Philbrick – Just Because You’re Winning Doesn’t Mean You’re SmartBIO: Mike Philbrick is the CEO of ReSolve Asset Management. He has over 30 years of experience in investment management, serving in senior investment industry positions with several major financial services firms, and is responsible for investment decisions, coaching, and strategic leadership.

                                                                                                STORY: Mike learned of a mining stock at the urinal. He invested, and the stock performed well because the mining industry was on fire. And so encouraged by early success and massive ignorance, Mike wiped all of those gains in no time.

                                                                                                LEARNING: Don’t over-leverage. Understand what kind of investor you are. Ensure you have some protection before you go all-in in an investment.

                                                                                                 

                                                                                                “Just because you’re winning doesn’t mean you’re smart or you’re good at these things.”

                                                                                                Mike Philbrick

                                                                                                 

                                                                                                Guest profile

                                                                                                Mike Philbrick is the Chief Executive Officer of ReSolve Asset Management. He has over 30 years of experience in investment management, serving in senior investment industry positions with several major financial services firms, and is responsible for investment decisions, coaching, and strategic leadership. He has co-authored the book Adaptive Asset Allocation: Dynamic Global Portfolios to Profit in Good Times – and Bad (Wiley), as well as several whitepapers and research focused on adding new insights to the quantitative global asset allocation space.

                                                                                                Adaptive Asset Allocation and Return Stacked Portfolio Solutions have been popularized by him and his team at ReSolve.

                                                                                                Preceding his investment career, Mike played professional football in the CFL, winning the Grey Cup Championship in 1999 and being inducted into the Hamilton Tiger-Cat Walk of Fame in 2015.

                                                                                                Worst investment ever

                                                                                                Back in the early 90s, there was a lot of mining going on in Canada, and so mining stocks were becoming popular. Mike had started noticing the stocks but had yet to invest. One day, he’s at a urinal, and a guy tells him about a particular mining stock. Mike figured it was a good idea to invest in the stock. He didn’t do any research; he just took the man’s word for it.

                                                                                                The stock wins, and Mike gets a couple more wins from the stock, not because he was a genius but because the mining industry was on fire. And so emboldened with early success and massive ignorance, Mike wiped all of those gains in no time.

                                                                                                Lessons learned

                                                                                                • Understand what kind of investor you are. Can you withstand a 90% decline?
                                                                                                • Can you buy something and then ignore it long-term?
                                                                                                • Don’t over-leverage.
                                                                                                
                                                                                                

                                                                                                Andrew’s takeaways

                                                                                                • Ensure you have some protection before you go all-in in an investment, particularly when you don’t know much about it.
                                                                                                
                                                                                                

                                                                                                Actionable advice

                                                                                                Always remember that you don’t know as much as you think, so take different approaches such as diversifying, being less confident, managing risk with stop losses, or managing risk at the portfolio level on an ongoing basis. You don’t need to own more of what’s going well. Just do less of what’s dragging your portfolio from a momentum factor that enhances returns.

                                                                                                Mike’s recommendations

                                                                                                Mike recommends his book Adaptive Asset Allocation: Dynamic Global Portfolios to Profit in Good Times – and Bad, which goes through steps that you would take to maximize diversification and how to use the factor of momentum to enhance that.

                                                                                                No.1 goal for the next 12 months

                                                                                                Mike’s number one goal for the next 12 months is to get his firm 1.5 billion dollars in assets under management.

                                                                                                Parting words

                                                                                                 

                                                                                                “Stay true to yourself.”

                                                                                                Mike Philbrick

                                                                                                 

                                                                                                [spp-transcript]

                                                                                                 

                                                                                                Connect with Mike Philbrick

                                                                                                • LinkedIn
                                                                                                • Twitter
                                                                                                • YouTube
                                                                                                • Podcast
                                                                                                • Website
                                                                                                • Book
                                                                                                
                                                                                                

                                                                                                Andrew’s books

                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                • My Worst Investment Ever
                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                
                                                                                                

                                                                                                Andrew’s online programs

                                                                                                • Valuation Master Class
                                                                                                • The Become a Better Investor Community
                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                • Finance Made Ridiculously Simple
                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                • Achieve Your Goals
                                                                                                
                                                                                                

                                                                                                Connect with Andrew Stotz:

                                                                                                • astotz.com
                                                                                                • LinkedIn
                                                                                                • Facebook
                                                                                                • Instagram
                                                                                                • Threads
                                                                                                • Twitter
                                                                                                • YouTube
                                                                                                • My Worst Investment Ever Podcast
                                                                                                
                                                                                                

                                                                                                Further reading mentioned

                                                                                                • Robert M. Pirsig, Zen and the Art of Motorcycle Maintenance: An Inquiry Into Values.
                                                                                                
                                                                                                ]]>BIO: Mike Philbrick is the CEO of ReSolve Asset Management. He has over 30 years of experience in investment management, serving in senior investment industry positions with several major financial services firms, and is responsible for investment decisions, coaching, and strategic leadership.

                                                                                                STORY: Mike learned of a mining stock at the urinal. He invested, and the stock performed well because the mining industry was on fire. And so encouraged by early success and massive ignorance, Mike wiped all of those gains in no time.

                                                                                                LEARNING: Don’t over-leverage. Understand what kind of investor you are. Ensure you have some protection before you go all-in in an investment.

                                                                                                 

                                                                                                “Just because you’re winning doesn’t mean you’re smart or you’re good at these things.”

                                                                                                Mike Philbrick

                                                                                                 

                                                                                                Guest profile

                                                                                                Mike Philbrick is the Chief Executive Officer of ReSolve Asset Management. He has over 30 years of experience in investment management, serving in senior investment industry positions with several major financial services firms, and is responsible for investment decisions, coaching, and strategic leadership. He has co-authored the book Adaptive Asset Allocation: Dynamic Global Portfolios to Profit in Good Times – and Bad (Wiley), as well as several whitepapers and research focused on adding new insights to the quantitative global asset allocation space.

                                                                                                Adaptive Asset Allocation and Return Stacked Portfolio Solutions have been popularized by him and his team at ReSolve.

                                                                                                Preceding his investment career, Mike played professional football in the CFL, winning the Grey Cup Championship in 1999 and being inducted into the Hamilton Tiger-Cat Walk of Fame in 2015.

                                                                                                Worst investment ever

                                                                                                Back in the early 90s, there was a lot of mining going on in Canada, and so mining stocks were becoming popular. Mike had started noticing the stocks but had yet to invest. One day, he’s at a urinal, and a guy tells him about a particular mining stock. Mike figured it was a good idea to invest in the stock. He didn’t do any research; he just took the man’s word for it.

                                                                                                The stock wins, and Mike gets a couple more wins from the stock, not because he was a genius but because the mining industry was on fire. And so emboldened with early success and massive ignorance, Mike wiped all of those gains in no time.

                                                                                                Lessons learned

                                                                                                • Understand what kind of investor you are. Can you withstand a 90% decline?
                                                                                                • Can you buy something and then ignore it long-term?
                                                                                                • Don’t over-leverage.
                                                                                                
                                                                                                

                                                                                                Andrew’s takeaways

                                                                                                • Ensure you have some protection before you go all-in in an investment, particularly when you don’t know much about it.
                                                                                                
                                                                                                

                                                                                                Actionable advice

                                                                                                Always remember that you don’t know as much as you think, so take different approaches such as diversifying, being less confident, managing risk with stop losses, or managing risk at the portfolio level on an ongoing basis. You don’t need to own more of what’s going well. Just do less of what’s dragging your portfolio from a momentum factor that enhances returns.

                                                                                                Mike’s recommendations

                                                                                                Mike recommends his book Adaptive Asset Allocation: Dynamic Global Portfolios to Profit in Good Times – and Bad, which goes through steps that you would take to maximize diversification and how to use the factor of momentum to enhance that.

                                                                                                No.1 goal for the next 12 months

                                                                                                Mike’s number one goal for the next 12 months is to get his firm 1.5 billion dollars in assets under management.

                                                                                                Parting words

                                                                                                 

                                                                                                “Stay true to yourself.”

                                                                                                Mike Philbrick

                                                                                                 

                                                                                                [spp-transcript]

                                                                                                 

                                                                                                Connect with Mike Philbrick

                                                                                                • LinkedIn
                                                                                                • Twitter
                                                                                                • YouTube
                                                                                                • Podcast
                                                                                                • Website
                                                                                                • Book
                                                                                                
                                                                                                

                                                                                                Andrew’s books

                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                • My Worst Investment Ever
                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                
                                                                                                

                                                                                                Andrew’s online programs

                                                                                                • Valuation Master Class
                                                                                                • The Become a Better Investor Community
                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                • Finance Made Ridiculously Simple
                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                • Achieve Your Goals
                                                                                                
                                                                                                

                                                                                                Connect with Andrew Stotz:

                                                                                                • astotz.com
                                                                                                • LinkedIn
                                                                                                • Facebook
                                                                                                • Instagram
                                                                                                • Threads
                                                                                                • Twitter
                                                                                                • YouTube
                                                                                                • My Worst Investment Ever Podcast
                                                                                                
                                                                                                

                                                                                                Further reading mentioned

                                                                                                • Robert M. Pirsig, Zen and the Art of Motorcycle Maintenance: An Inquiry Into Values.
                                                                                                
                                                                                                ]]>f70b8d15-12c8-422c-8ea6-9c87a628a221Wed, 01 Nov 2023 06:00:00 +070040:47falsefullSam Burns – Understand What You’re Really Betting OnBIO: Sam Burns is Chief Investment Strategist at Mill Street Research, an independent investment research firm based near Boston, MA. For 25 years, he has focused on global asset allocation and quantitative stock selection, primarily for institutional investors.

                                                                                                STORY: Sam decided to short-sell options that went horribly wrong after the Russian default. Even though he knew how options work in principle and that he could lose money, Sam didn’t have a plan for what if some geopolitical event happened, causing the market to fall suddenly. And so he lost a whole lot of money in the trade.

                                                                                                LEARNING: Understand what you’re really betting on. Every option trade is about volatility. Have a plan for what could go wrong and what you’ll do about it before you look at the headline to see what’s happening.

                                                                                                 

                                                                                                “There often are hidden drivers of an investment that are not what you think they are.”

                                                                                                Sam Burns

                                                                                                 

                                                                                                Guest profile

                                                                                                Sam Burns is Chief Investment Strategist at Mill Street Research, an independent investment research firm based near Boston, MA. For 25 years now, he has focused on global asset allocation and quantitative stock selection, primarily for institutional investors. After spending many years doing research at firms like Oppenheimer & Co, State Street, Brown Brothers Harriman, and Ned Davis Research, Sam founded Mill Street in 2016 to be able to bring all of his best work together and offer it to clients without any constraints or conflicts.

                                                                                                Worst investment ever

                                                                                                Sam had been trading options for a while, mainly from the long side, buying puts and calls, which, at the very least, has a limited risk aspect since you can only lose what you put in. At some point, Sam decided to try short-sell options, which went violently against him.

                                                                                                This was in August 1998 when the Russian default set off a chain reaction of problems and Long-Term Capital Management blew up. Even though he knew how options work in principle and that he could lose money, Sam didn’t have a plan for what if some geopolitical event happened, causing the market to fall suddenly. And so he lost a whole lot of money in the trade.

                                                                                                Lessons learned

                                                                                                • Every option trade is about volatility.
                                                                                                • Have a plan for what could go wrong and what you’ll do about it before you look at the headline to see what’s happening.
                                                                                                • Ensure you’re capitalized well enough to handle or ride through ups and downs and drawdowns.
                                                                                                
                                                                                                

                                                                                                Andrew’s takeaways

                                                                                                • Understand what you’re really betting on.
                                                                                                
                                                                                                

                                                                                                Actionable advice

                                                                                                Make a point to think through what’s behind an investment and understand the other things moving simultaneously that might explain the movement of the asset you’re interested in.

                                                                                                Sam’s recommendations

                                                                                                Sam recommends listening to or reading people who are practitioners involved in markets day to day rather than journalists, who, though they do a great job, a lot of them write for a different reason than to make you a better investor.

                                                                                                No.1 goal for the next 12 months

                                                                                                Sam’s number one goal for the next 12 months is to try and stay on the right side of the macro picture.

                                                                                                Parting words

                                                                                                 

                                                                                                “Have a plan.”

                                                                                                Sam Burns

                                                                                                 

                                                                                                [spp-transcript]

                                                                                                 

                                                                                                Connect with Sam Burns

                                                                                                • LinkedIn
                                                                                                • Twitter
                                                                                                • YouTube
                                                                                                • Website
                                                                                                
                                                                                                

                                                                                                Andrew’s books

                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                • My Worst Investment Ever
                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                
                                                                                                

                                                                                                Andrew’s online programs

                                                                                                • Valuation Master Class
                                                                                                • The Become a Better Investor Community
                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                • Finance Made Ridiculously Simple
                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                • Achieve Your Goals
                                                                                                
                                                                                                

                                                                                                Connect with Andrew Stotz:

                                                                                                • astotz.com
                                                                                                • LinkedIn
                                                                                                • Facebook
                                                                                                • Instagram
                                                                                                • Threads
                                                                                                • Twitter
                                                                                                • YouTube
                                                                                                • My Worst Investment Ever Podcast
                                                                                                
                                                                                                ]]>BIO: Sam Burns is Chief Investment Strategist at Mill Street Research, an independent investment research firm based near Boston, MA. For 25 years, he has focused on global asset allocation and quantitative stock selection, primarily for institutional investors.

                                                                                                STORY: Sam decided to short-sell options that went horribly wrong after the Russian default. Even though he knew how options work in principle and that he could lose money, Sam didn’t have a plan for what if some geopolitical event happened, causing the market to fall suddenly. And so he lost a whole lot of money in the trade.

                                                                                                LEARNING: Understand what you’re really betting on. Every option trade is about volatility. Have a plan for what could go wrong and what you’ll do about it before you look at the headline to see what’s happening.

                                                                                                 

                                                                                                “There often are hidden drivers of an investment that are not what you think they are.”

                                                                                                Sam Burns

                                                                                                 

                                                                                                Guest profile

                                                                                                Sam Burns is Chief Investment Strategist at Mill Street Research, an independent investment research firm based near Boston, MA. For 25 years now, he has focused on global asset allocation and quantitative stock selection, primarily for institutional investors. After spending many years doing research at firms like Oppenheimer & Co, State Street, Brown Brothers Harriman, and Ned Davis Research, Sam founded Mill Street in 2016 to be able to bring all of his best work together and offer it to clients without any constraints or conflicts.

                                                                                                Worst investment ever

                                                                                                Sam had been trading options for a while, mainly from the long side, buying puts and calls, which, at the very least, has a limited risk aspect since you can only lose what you put in. At some point, Sam decided to try short-sell options, which went violently against him.

                                                                                                This was in August 1998 when the Russian default set off a chain reaction of problems and Long-Term Capital Management blew up. Even though he knew how options work in principle and that he could lose money, Sam didn’t have a plan for what if some geopolitical event happened, causing the market to fall suddenly. And so he lost a whole lot of money in the trade.

                                                                                                Lessons learned

                                                                                                • Every option trade is about volatility.
                                                                                                • Have a plan for what could go wrong and what you’ll do about it before you look at the headline to see what’s happening.
                                                                                                • Ensure you’re capitalized well enough to handle or ride through ups and downs and drawdowns.
                                                                                                
                                                                                                

                                                                                                Andrew’s takeaways

                                                                                                • Understand what you’re really betting on.
                                                                                                
                                                                                                

                                                                                                Actionable advice

                                                                                                Make a point to think through what’s behind an investment and understand the other things moving simultaneously that might explain the movement of the asset you’re interested in.

                                                                                                Sam’s recommendations

                                                                                                Sam recommends listening to or reading people who are practitioners involved in markets day to day rather than journalists, who, though they do a great job, a lot of them write for a different reason than to make you a better investor.

                                                                                                No.1 goal for the next 12 months

                                                                                                Sam’s number one goal for the next 12 months is to try and stay on the right side of the macro picture.

                                                                                                Parting words

                                                                                                 

                                                                                                “Have a plan.”

                                                                                                Sam Burns

                                                                                                 

                                                                                                [spp-transcript]

                                                                                                 

                                                                                                Connect with Sam Burns

                                                                                                • LinkedIn
                                                                                                • Twitter
                                                                                                • YouTube
                                                                                                • Website
                                                                                                
                                                                                                

                                                                                                Andrew’s books

                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                • My Worst Investment Ever
                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                
                                                                                                

                                                                                                Andrew’s online programs

                                                                                                • Valuation Master Class
                                                                                                • The Become a Better Investor Community
                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                • Finance Made Ridiculously Simple
                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                • Achieve Your Goals
                                                                                                
                                                                                                

                                                                                                Connect with Andrew Stotz:

                                                                                                • astotz.com
                                                                                                • LinkedIn
                                                                                                • Facebook
                                                                                                • Instagram
                                                                                                • Threads
                                                                                                • Twitter
                                                                                                • YouTube
                                                                                                • My Worst Investment Ever Podcast
                                                                                                
                                                                                                ]]>6c4599ab-22be-43e3-b1a4-40d4b8ad24feMon, 30 Oct 2023 06:00:00 +070024:51falsefullJay Pelosky – You Can Be Right but at the Wrong TimeBIO: Jay Pelosky has over 35 years of both buy and sell side financial market experience. While at Morgan Stanley, he was ranked # 1 in Institutional Investor in Global Equity Strategy and Global Asset Allocation Strategy.

                                                                                                STORY: In the 90s, Jay was bullish about Mexico even though people were concerned about foreign currency debt and the country’s risk of devaluation. He remained adamant that people shouldn’t worry because Mexico wouldn’t devalue, and everything would be fine. Lo and behold, the Mexican government devalued in the middle of the night.

                                                                                                LEARNING: You can be right but at the wrong time. A forward-thinking approach is precious as an investor. You must have a thick skin to be an investor because you’ll get stuff wrong often.

                                                                                                 

                                                                                                “The only person who hasn’t struck out is the person who hasn’t swung the bat. In other words, if you’re going to be in this business, you’re going to make mistakes.”

                                                                                                Jay Pelosky

                                                                                                 

                                                                                                Guest profile

                                                                                                Jay Pelosky has over 35 years of both buy and sell side financial market experience. While at Morgan Stanley, he was ranked # 1 in Institutional Investor in Global Equity Strategy and Global Asset Allocation Strategy. He has over 20 years of global macro experience and has spent much of the past 20 years investing his own capital using US-listed ETFs.

                                                                                                TPW Advisory is a NYC-based, independent investment boutique offering global asset allocation and portfolio strategy advice to retail and institutional investors through its Model Portfolio Delivery Service (MPDS). Learn more at pelosky.com.

                                                                                                Worst investment ever

                                                                                                In the 1990s, Jay was the Latin American strategist at Morgan Stanley Asset Management and the research department head. He had hired many people and did a lot of IPO business because of the emerging market enthusiasm. Many S&P investors were peeling off 5% or 10% of their exposure and putting it in emerging markets to juice their returns relative to the S&P.

                                                                                                Jay was bullish about Mexico even though people were concerned about foreign currency debt and the country’s devaluation risk. He remained adamant that people shouldn’t worry because Mexico wouldn’t devalue, and everything would be fine. He encouraged people to stay invested.

                                                                                                Lo and behold, the Mexican government devalued in the middle of the night. Jay had to go in front of the sales force, admit that he had gotten it wrong, and articulate how he got it wrong. He became the poster child in the Wall Street Journal for how Wall Street got Mexico wrong.

                                                                                                Lessons learned

                                                                                                • You must have a thick skin to be an investor because you’ll get stuff wrong often.
                                                                                                • Learn to handle being wrong publicly, shake it off, and understand where you went wrong.
                                                                                                • A forward-thinking approach is precious as an investor.
                                                                                                
                                                                                                

                                                                                                Andrew’s takeaways

                                                                                                • You can be right but at the wrong time.
                                                                                                • If you’re taking risks, you’re definitely going to lose. Even the best people fail; it’s just part of the game.
                                                                                                
                                                                                                

                                                                                                Actionable advice

                                                                                                Talk with someone with more experience to give you an honest read on what their bullish view is. Ask them to help you identify some of the risks.

                                                                                                Jay’s recommendations

                                                                                                If you want to get into the business of Wall Street or invest in the capital markets, Jay recommends establishing your own portfolio. By showing that you’re willing to bet on yourself, you’ll go a long way toward encouraging others to bet on you.

                                                                                                No.1 goal for the next 12 months

                                                                                                Jay’s number one goal for the next 12 months is to have a good portfolio performance and continue to identify opportunities, avoid market pitfalls, and provide excellent service to his clients.

                                                                                                Parting words

                                                                                                 

                                                                                                “It’s been a great discussion. I appreciate your questions and the opportunity to tell some of my stories. It’s always fun.”

                                                                                                Jay Pelosky

                                                                                                 

                                                                                                [spp-transcript]

                                                                                                 

                                                                                                Connect with Jay Pelosky

                                                                                                • LinkedIn
                                                                                                • Twitter
                                                                                                • Website
                                                                                                
                                                                                                

                                                                                                Andrew’s books

                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                • My Worst Investment Ever
                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                
                                                                                                

                                                                                                Andrew’s online programs

                                                                                                • Valuation Master Class
                                                                                                • The Become a Better Investor Community
                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                • Finance Made Ridiculously Simple
                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                • Achieve Your Goals
                                                                                                
                                                                                                

                                                                                                Connect with Andrew Stotz:

                                                                                                • astotz.com
                                                                                                • LinkedIn
                                                                                                • Facebook
                                                                                                • Instagram
                                                                                                • Threads
                                                                                                • Twitter
                                                                                                • YouTube
                                                                                                • My Worst Investment Ever Podcast
                                                                                                
                                                                                                ]]>BIO: Jay Pelosky has over 35 years of both buy and sell side financial market experience. While at Morgan Stanley, he was ranked # 1 in Institutional Investor in Global Equity Strategy and Global Asset Allocation Strategy.

                                                                                                STORY: In the 90s, Jay was bullish about Mexico even though people were concerned about foreign currency debt and the country’s risk of devaluation. He remained adamant that people shouldn’t worry because Mexico wouldn’t devalue, and everything would be fine. Lo and behold, the Mexican government devalued in the middle of the night.

                                                                                                LEARNING: You can be right but at the wrong time. A forward-thinking approach is precious as an investor. You must have a thick skin to be an investor because you’ll get stuff wrong often.

                                                                                                 

                                                                                                “The only person who hasn’t struck out is the person who hasn’t swung the bat. In other words, if you’re going to be in this business, you’re going to make mistakes.”

                                                                                                Jay Pelosky

                                                                                                 

                                                                                                Guest profile

                                                                                                Jay Pelosky has over 35 years of both buy and sell side financial market experience. While at Morgan Stanley, he was ranked # 1 in Institutional Investor in Global Equity Strategy and Global Asset Allocation Strategy. He has over 20 years of global macro experience and has spent much of the past 20 years investing his own capital using US-listed ETFs.

                                                                                                TPW Advisory is a NYC-based, independent investment boutique offering global asset allocation and portfolio strategy advice to retail and institutional investors through its Model Portfolio Delivery Service (MPDS). Learn more at pelosky.com.

                                                                                                Worst investment ever

                                                                                                In the 1990s, Jay was the Latin American strategist at Morgan Stanley Asset Management and the research department head. He had hired many people and did a lot of IPO business because of the emerging market enthusiasm. Many S&P investors were peeling off 5% or 10% of their exposure and putting it in emerging markets to juice their returns relative to the S&P.

                                                                                                Jay was bullish about Mexico even though people were concerned about foreign currency debt and the country’s devaluation risk. He remained adamant that people shouldn’t worry because Mexico wouldn’t devalue, and everything would be fine. He encouraged people to stay invested.

                                                                                                Lo and behold, the Mexican government devalued in the middle of the night. Jay had to go in front of the sales force, admit that he had gotten it wrong, and articulate how he got it wrong. He became the poster child in the Wall Street Journal for how Wall Street got Mexico wrong.

                                                                                                Lessons learned

                                                                                                • You must have a thick skin to be an investor because you’ll get stuff wrong often.
                                                                                                • Learn to handle being wrong publicly, shake it off, and understand where you went wrong.
                                                                                                • A forward-thinking approach is precious as an investor.
                                                                                                
                                                                                                

                                                                                                Andrew’s takeaways

                                                                                                • You can be right but at the wrong time.
                                                                                                • If you’re taking risks, you’re definitely going to lose. Even the best people fail; it’s just part of the game.
                                                                                                
                                                                                                

                                                                                                Actionable advice

                                                                                                Talk with someone with more experience to give you an honest read on what their bullish view is. Ask them to help you identify some of the risks.

                                                                                                Jay’s recommendations

                                                                                                If you want to get into the business of Wall Street or invest in the capital markets, Jay recommends establishing your own portfolio. By showing that you’re willing to bet on yourself, you’ll go a long way toward encouraging others to bet on you.

                                                                                                No.1 goal for the next 12 months

                                                                                                Jay’s number one goal for the next 12 months is to have a good portfolio performance and continue to identify opportunities, avoid market pitfalls, and provide excellent service to his clients.

                                                                                                Parting words

                                                                                                 

                                                                                                “It’s been a great discussion. I appreciate your questions and the opportunity to tell some of my stories. It’s always fun.”

                                                                                                Jay Pelosky

                                                                                                 

                                                                                                [spp-transcript]

                                                                                                 

                                                                                                Connect with Jay Pelosky

                                                                                                • LinkedIn
                                                                                                • Twitter
                                                                                                • Website
                                                                                                
                                                                                                

                                                                                                Andrew’s books

                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                • My Worst Investment Ever
                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                
                                                                                                

                                                                                                Andrew’s online programs

                                                                                                • Valuation Master Class
                                                                                                • The Become a Better Investor Community
                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                • Finance Made Ridiculously Simple
                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                • Achieve Your Goals
                                                                                                
                                                                                                

                                                                                                Connect with Andrew Stotz:

                                                                                                • astotz.com
                                                                                                • LinkedIn
                                                                                                • Facebook
                                                                                                • Instagram
                                                                                                • Threads
                                                                                                • Twitter
                                                                                                • YouTube
                                                                                                • My Worst Investment Ever Podcast
                                                                                                
                                                                                                ]]>56f9732f-7eee-4d80-85e4-ee0f2fcd2062Thu, 26 Oct 2023 06:00:00 +070059:14falsefullJerry Parker – Understand Your Investing Capabilities and LimitationsBIO: Jerry Parker started his trading career in 1983 in the Richard Dennis Turtle Program. He started Chesapeake Capital in 1988. Chesapeake manages about $200M in private funds, mutual funds, ETFs, and managed accounts.

                                                                                                STORY: Jerry has had some stinker investments in real estate and gold over the years. Two things that have cost him money in his real estate investment are overpaying and not being patient. Often, Jerry would find himself buying homes by speculating and thinking that he knew what he was doing, only to realize that he didn’t.

                                                                                                LEARNING: Understand what you’re capable of and your limitations as well. Be afraid of situations you’re unfamiliar with and assume the worst.

                                                                                                 

                                                                                                “If you’re at a poker table and don’t know who the patsy is, it’s usually you.”

                                                                                                Jerry Parker

                                                                                                 

                                                                                                Guest profile

                                                                                                Jerry Parker started his trading career in 1983 in the Richard Dennis Turtle Program. He started Chesapeake Capital in 1988. Chesapeake manages about $200M in private funds, mutual funds, ETFs, and managed accounts. All of the trading is done using a Trend Following + Nothing approach. The funds are maximally diversified and include bond, commodity and currency futures, stocks, crypto, and FX forwards. Jerry is active on Twitter and Twitter Spaces at @rjparkerjr09.

                                                                                                Worst investment ever

                                                                                                Over the years, Jerry has had some stinker investments in real estate and gold. Two things that have cost him money in his real estate investment are overpaying and not being patient. Often, Jerry would find himself buying homes by speculating and thinking that he knew what he was doing, only to realize that he didn’t.

                                                                                                Lessons learned

                                                                                                • Understand what you’re capable of and your limitations as well.
                                                                                                • Be afraid of situations you’re unfamiliar with and assume the worst.
                                                                                                
                                                                                                

                                                                                                Andrew’s takeaways

                                                                                                • Do what feels right for you, but don’t feel pushed into something just because everybody else does it.
                                                                                                
                                                                                                

                                                                                                Actionable advice

                                                                                                Find a great mentor in a field you’re passionate about, and learn from them. Also, be ready for a big break.

                                                                                                Jerry’s recommendations

                                                                                                Jerry recommends finding people on Twitter and subjects you’re interested in and following them for great advice. He also recommends listening to podcasts and reading books to get information about things you can’t learn in college.

                                                                                                No.1 goal for the next 12 months

                                                                                                Jerry’s number one goal for the next 12 months is to stay disciplined, keep doing what he’s been doing, and continue improving his portfolio.

                                                                                                Parting words

                                                                                                 

                                                                                                “Thank you for having me. I will go back and listen to some of your old podcasts.”

                                                                                                Jerry Parker

                                                                                                 

                                                                                                [spp-transcript]

                                                                                                 

                                                                                                Connect with Jerry Parker

                                                                                                • LinkedIn
                                                                                                • Twitter
                                                                                                • Website
                                                                                                • Podcast
                                                                                                
                                                                                                

                                                                                                Andrew’s books

                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                • My Worst Investment Ever
                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                
                                                                                                

                                                                                                Andrew’s online programs

                                                                                                • Valuation Master Class
                                                                                                • The Become a Better Investor Community
                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                • Finance Made Ridiculously Simple
                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                • Achieve Your Goals
                                                                                                
                                                                                                

                                                                                                Connect with Andrew Stotz:

                                                                                                • astotz.com
                                                                                                • LinkedIn
                                                                                                • Facebook
                                                                                                • Instagram
                                                                                                • Threads
                                                                                                • Twitter
                                                                                                • YouTube
                                                                                                • My Worst Investment Ever Podcast
                                                                                                
                                                                                                ]]>BIO: Jerry Parker started his trading career in 1983 in the Richard Dennis Turtle Program. He started Chesapeake Capital in 1988. Chesapeake manages about $200M in private funds, mutual funds, ETFs, and managed accounts.

                                                                                                STORY: Jerry has had some stinker investments in real estate and gold over the years. Two things that have cost him money in his real estate investment are overpaying and not being patient. Often, Jerry would find himself buying homes by speculating and thinking that he knew what he was doing, only to realize that he didn’t.

                                                                                                LEARNING: Understand what you’re capable of and your limitations as well. Be afraid of situations you’re unfamiliar with and assume the worst.

                                                                                                 

                                                                                                “If you’re at a poker table and don’t know who the patsy is, it’s usually you.”

                                                                                                Jerry Parker

                                                                                                 

                                                                                                Guest profile

                                                                                                Jerry Parker started his trading career in 1983 in the Richard Dennis Turtle Program. He started Chesapeake Capital in 1988. Chesapeake manages about $200M in private funds, mutual funds, ETFs, and managed accounts. All of the trading is done using a Trend Following + Nothing approach. The funds are maximally diversified and include bond, commodity and currency futures, stocks, crypto, and FX forwards. Jerry is active on Twitter and Twitter Spaces at @rjparkerjr09.

                                                                                                Worst investment ever

                                                                                                Over the years, Jerry has had some stinker investments in real estate and gold. Two things that have cost him money in his real estate investment are overpaying and not being patient. Often, Jerry would find himself buying homes by speculating and thinking that he knew what he was doing, only to realize that he didn’t.

                                                                                                Lessons learned

                                                                                                • Understand what you’re capable of and your limitations as well.
                                                                                                • Be afraid of situations you’re unfamiliar with and assume the worst.
                                                                                                
                                                                                                

                                                                                                Andrew’s takeaways

                                                                                                • Do what feels right for you, but don’t feel pushed into something just because everybody else does it.
                                                                                                
                                                                                                

                                                                                                Actionable advice

                                                                                                Find a great mentor in a field you’re passionate about, and learn from them. Also, be ready for a big break.

                                                                                                Jerry’s recommendations

                                                                                                Jerry recommends finding people on Twitter and subjects you’re interested in and following them for great advice. He also recommends listening to podcasts and reading books to get information about things you can’t learn in college.

                                                                                                No.1 goal for the next 12 months

                                                                                                Jerry’s number one goal for the next 12 months is to stay disciplined, keep doing what he’s been doing, and continue improving his portfolio.

                                                                                                Parting words

                                                                                                 

                                                                                                “Thank you for having me. I will go back and listen to some of your old podcasts.”

                                                                                                Jerry Parker

                                                                                                 

                                                                                                [spp-transcript]

                                                                                                 

                                                                                                Connect with Jerry Parker

                                                                                                • LinkedIn
                                                                                                • Twitter
                                                                                                • Website
                                                                                                • Podcast
                                                                                                
                                                                                                

                                                                                                Andrew’s books

                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                • My Worst Investment Ever
                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                
                                                                                                

                                                                                                Andrew’s online programs

                                                                                                • Valuation Master Class
                                                                                                • The Become a Better Investor Community
                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                • Finance Made Ridiculously Simple
                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                • Achieve Your Goals
                                                                                                
                                                                                                

                                                                                                Connect with Andrew Stotz:

                                                                                                • astotz.com
                                                                                                • LinkedIn
                                                                                                • Facebook
                                                                                                • Instagram
                                                                                                • Threads
                                                                                                • Twitter
                                                                                                • YouTube
                                                                                                • My Worst Investment Ever Podcast
                                                                                                
                                                                                                ]]>1fad8640-b8dd-4afb-b1cf-be11c22f445bMon, 23 Oct 2023 06:00:00 +070035:19falsefullISMS 33: Fed Success! High LT Rates & Recession ComingFed Success! High LT Rates & Recession Coming
                                                                                                • World yield curve inversion is falling because of rising LT rates
                                                                                                • Rising LT rates are reducing yield curve inversion fastest in DM Americas and DM Europe
                                                                                                • Rates are high across EMs, crushing in FMs, and low in EM Asia
                                                                                                • France and Germany ST rates rising; DM countries have past peak yield curve inversion due to rising LT rates
                                                                                                • Rates are low in China, which, together with India, never inverted
                                                                                                
                                                                                                

                                                                                                Rates returning to normal?

                                                                                                
                                                                                                

                                                                                                Irving Fisher (1867 –1947) – One of the earliest American neoclassical economists

                                                                                                • Described as "the greatest economist the United States has ever produced"
                                                                                                • His reputation during his lifetime was irreparably harmed by his public statement, just nine days before the Wall Street Crash of 1929, that the stock market had reached "a permanently high plateau"
                                                                                                • His 1930 treatise, The Theory of Interest, summed up a lifetime's research into capital, capital budgeting, credit markets, and the factors (including inflation) that determine interest rates
                                                                                                • Some core concepts
                                                                                                • Time Preference – The idea that people generally prefer to have goods and services sooner rather than later
                                                                                                • Real Interest Rate – The real interest rate adjusts for the effects of inflation, allowing for a more accurate evaluation of the purchasing power of money over time
                                                                                                • Fisher Equation – Relates nominal interest rates to real interest rates and inflation
                                                                                                • Expressed as: Nominal Interest Rate = Real Interest Rate + Inflation Rate
                                                                                                • The Fisher Effect - Suggests that nominal interest rates adjust in response to expected changes in inflation
                                                                                                • In other words, if people anticipate higher inflation, nominal interest rates will rise to compensate
                                                                                                
                                                                                                

                                                                                                
                                                                                                

                                                                                                
                                                                                                

                                                                                                Jeremy Siegel (born 1945) Professor of finance at the Wharton School of the University of Penn.

                                                                                                • Comments extensively on the economy and financial markets
                                                                                                • Wrote two books, but most prominent is
                                                                                                • Stocks for the Long Run: The Definitive Guide to Financial Market Returns and Long-Term Investment Strategies
                                                                                                
                                                                                                

                                                                                                History of the real return on long-term US government bonds

                                                                                                
                                                                                                

                                                                                                
                                                                                                

                                                                                                Global Markets

                                                                                                World yield curve inversion is falling because of rising LT rates

                                                                                                Interest rate level – 5.4% world 3m yield, 10yr 4.4%; LT rates much higher in EM

                                                                                                • World 3m rates were 5.4% in Sept., DM rates were 4.4%, and EM rates were 6.9%, a 2.6ppt premium
                                                                                                • World 1yr rates were 5.1% in Sept., DM rates were 4.3%, and EM rates were 6.2%, a 1.9ppt premium
                                                                                                • World 10yr rates were 4.7% in Sept., DM rates were 3.8%, and EM rates were 5.9%, a 2ppt premium
                                                                                                
                                                                                                

                                                                                                Year-on-year changes – DM 3m yield rose from lower base; fast DM LT rate rise

                                                                                                • 3m yield had a large 2.2ppt YoY rise to 4.4% in DM; there was a smaller 1.4ppt rise in EM
                                                                                                • 1yr rates only increased 0.7ppts YoY in EM; but were up a large 1.4ppt YoY in DM
                                                                                                • 10yr EM rates up only 0.2ppts YoY, DM rates rose by a much higher 0.7ppts
                                                                                                
                                                                                                

                                                                                                Rate progression – DM tightening has stopped but continues in EM

                                                                                                • 3m rates were flat MoM in DM and are on the rise in EM
                                                                                                • A 0.5ppt MoM rise in EM 1yr yield is raising World yields; DM yield was flat
                                                                                                • Sept 10yr yield rose in both DM and EM, up about 0.4ppts MoM
                                                                                                
                                                                                                

                                                                                                Yield curve – Rising LT rates pushed world past August peak inversion

                                                                                                • August looks to have been World peak inversion as LT yields have been rising
                                                                                                • World 3m rates rose fast, but now LT rates have started to rise
                                                                                                • May looks to have been DM peak inversion as LT yields start to rise
                                                                                                • 3m DM rates have flattened, but LT rates have been rising, reducing yield curve inversion
                                                                                                • August looks to have been EM peak inversion as LT yields have been rising
                                                                                                • After a year of significant rises in EM ST rates, LT rates have started rising, reducing inversion
                                                                                                
                                                                                                

                                                                                                Key points and the bottom line

                                                                                                • 5.4% world 3m yield, 10yr 4.4%; LT rates much higher in EM
                                                                                                • DM 3m yield rose from lower base; fast DM LT rate rise
                                                                                                • DM tightening has stopped but continues in EM
                                                                                                • Rising LT rates pushed world past August peak inversion
                                                                                                • World yield curve inversion is falling because of rising LT rates
                                                                                                
                                                                                                

                                                                                                Developed Market Regions

                                                                                                Rising LT rates are reducing yield curve inversion fastest in DM Americas and DM Europe

                                                                                                Interest rate level – High DM Americas rates, EM Europe lower, and DM Pacific much lower

                                                                                                • DM Americas 3m rates were 5.4% in Sept, DM Europe rates were 4.0%, DM Pacific rates were 1.4%
                                                                                                • DM Americas 1yr rates were 5.5% in Sept, DM Europe rates were 3.7%, DM Pacific rates were 1.6%
                                                                                                • DM Americas 10yr rates were 4.5% in Sept, DM Europe rates were 3.6%, DM Pacific rates were 2.1%
                                                                                                
                                                                                                

                                                                                                Year-on-year changes – ST rates rising in DM Europe, LT rates rising in DM Americas

                                                                                                • 2.8ppts YoY 3m rate rise in DM Europe, to 4%; up only 0.5ppt to a low 1.4% in DM Pacific
                                                                                                • DM Americas and Europe had a high 1.5ppt rise in 1yr rate; 0.5ppt in DM Pacific to a low 1.6%
                                                                                                • DM Americas had the highest rise in 10yr yields, up 0.8ppts, but other regions are rising as well
                                                                                                
                                                                                                

                                                                                                Rate progression – Rates hardly moved MoM across all DM regions

                                                                                                • DM Europe central bank tightening drove fast 3m rate YoY rise; rates flat MoM in all DM regions
                                                                                                • 1yr rate barely moved MoM in all DM regions
                                                                                                • 10yr yield rising fastest MoM in DM Americas and Europe, slow MoM rise in DM Pacific
                                                                                                
                                                                                                

                                                                                                Yield curve – Rising LT rates in DM Americas and Europe flattening yield curve; normal in DM Pacific

                                                                                                • DM Americas inversion peaked in May 2023; LT rate rise reduced inversion by 0.5ppts MoM
                                                                                                • DM Europe yield curve inversion peaked a bit later, in August, and fell MoM due to LT rate rise
                                                                                                • DM Pacific yield curve never inverted as it never went through a US Fed-style hiking cycle
                                                                                                
                                                                                                

                                                                                                Key points and the bottom line

                                                                                                • High DM Americas rates, EM Europe lower, and DM Pacific much lower
                                                                                                • ST rates rising in DM Europe, LT rates rising in DM Americas
                                                                                                • Rates hardly moved MoM across all DM regions
                                                                                                • Rising LT rates in DM Americas and Europe flattening yield curve; normal in DM Pacific
                                                                                                • Rising LT rates are reducing yield curve inversion fastest in DM Americas and DM Europe
                                                                                                
                                                                                                

                                                                                                Emerging Market Regions

                                                                                                Rates are high across EMs, crushing in FMs, and low in EM Asia

                                                                                                Interest rate level – ST EM rates high, ranging from 12% to 35%, but a low 3.2% in EM Asia

                                                                                                • EM Americas 3m rates were 11.9% in Sept, EM Asia rates were 3.2%, EM Europe rates were 11.6%, EM ME&A rates were 15.7%, Frontier rates were 33.5%
                                                                                                • EM Americas 1yr rates were 11.3% in Sept, EM Asia rates were 3.1%, EM Europe rates were 15.2%, EM ME&A rates were 25.2%, Frontier rates were 16%
                                                                                                • EM Americas 10yr rates were 11% in Sept, EM Asia rates were 3.6%, EM Europe rates were 12.5%, EM ME&A rates were 17.5%, Frontier rates were 11%
                                                                                                
                                                                                                

                                                                                                Year-on-year changes – ST rates in FM and EM ME&A are up, LT rates are rising fast in EM Europe

                                                                                                • Biggest YoY rise of 3m yields in Frontier markets, up 10.6ppt, and EM ME&A up 4.6ppt
                                                                                                • 1yr yield rose most YoY in EM ME&A, up 7.4ppt and EM Europe up 5.2ppt
                                                                                                • 10yr yields flat YoY in EM Americas; 3.2ppt rise in EM Europe and 2.9ppt rise in EM ME&A
                                                                                                
                                                                                                

                                                                                                Rate progression – FM ST rates up massively, but flat MoM, LT rates rising in EM Europe

                                                                                                • 3m rates up MoM in EM Europe; down in super high FMs and high EM Americas; flat in EM Asia
                                                                                                • 1yr yields show significant rise in EM Europe; High in EM ME&A; Low in EM Asia
                                                                                                • LT rates are up across EMs, rising particularly fast MoM in EM Europe, low and flat in EM Asia
                                                                                                
                                                                                                

                                                                                                Yield curve – Inversion massive in FM, falling in EM Americas; normal in EM Asia, Europe, and EM ME&A

                                                                                                • EM Americas yield curve inverted slightly more than World; but peaked in June 2023
                                                                                                • EM ME&A yield curve never inverted as ST rates have always been high
                                                                                                • Frontier yield curve inversion peaked in August 2023, but crushing ST rates remain
                                                                                                
                                                                                                

                                                                                                Key points and the bottom line

                                                                                                • ST EM rates high, ranging from 12% to 35%, but a low 3.2% in EM Asia
                                                                                                • ST rates in FM and EM ME&A are up, LT rates are rising fast in EM Europe
                                                                                                • FM ST rates up massively, but flat MoM, LT rates rising in EM Europe
                                                                                                • Inversion massive in FM, falling in EM Americas; normal in EM Asia, Europe, and EM ME&A
                                                                                                • Rates are high across EMs, crushing in FMs, and low in EM Asia
                                                                                                
                                                                                                

                                                                                                Developed Countries

                                                                                                France and Germany ST rates rising; DM countries have past peak yield curve inversion due to rising LT rates

                                                                                                Interest rate level – US/UK have 5.5% ST and 4.6% LT rates, Germany and France lower at 3.6%

                                                                                                • US 3m rates were 5.5% in Sept, Japanese rates were 0.2%, German rates were 3.6%, UK rates were 5.4%, French rates were 3.8%
                                                                                                • US 1yr rates were 5.5% in Sept, Japanese rates were zero, German rates were 3.7%, UK rates were 5.1%,...]]>Fed Success! High LT Rates & Recession Coming
                                                                                                  • World yield curve inversion is falling because of rising LT rates
                                                                                                  • Rising LT rates are reducing yield curve inversion fastest in DM Americas and DM Europe
                                                                                                  • Rates are high across EMs, crushing in FMs, and low in EM Asia
                                                                                                  • France and Germany ST rates rising; DM countries have past peak yield curve inversion due to rising LT rates
                                                                                                  • Rates are low in China, which, together with India, never inverted
                                                                                                  
                                                                                                  

                                                                                                  Rates returning to normal?

                                                                                                  
                                                                                                  

                                                                                                  Irving Fisher (1867 –1947) – One of the earliest American neoclassical economists

                                                                                                  • Described as "the greatest economist the United States has ever produced"
                                                                                                  • His reputation during his lifetime was irreparably harmed by his public statement, just nine days before the Wall Street Crash of 1929, that the stock market had reached "a permanently high plateau"
                                                                                                  • His 1930 treatise, The Theory of Interest, summed up a lifetime's research into capital, capital budgeting, credit markets, and the factors (including inflation) that determine interest rates
                                                                                                  • Some core concepts
                                                                                                  • Time Preference – The idea that people generally prefer to have goods and services sooner rather than later
                                                                                                  • Real Interest Rate – The real interest rate adjusts for the effects of inflation, allowing for a more accurate evaluation of the purchasing power of money over time
                                                                                                  • Fisher Equation – Relates nominal interest rates to real interest rates and inflation
                                                                                                  • Expressed as: Nominal Interest Rate = Real Interest Rate + Inflation Rate
                                                                                                  • The Fisher Effect - Suggests that nominal interest rates adjust in response to expected changes in inflation
                                                                                                  • In other words, if people anticipate higher inflation, nominal interest rates will rise to compensate
                                                                                                  
                                                                                                  

                                                                                                  
                                                                                                  

                                                                                                  
                                                                                                  

                                                                                                  Jeremy Siegel (born 1945) Professor of finance at the Wharton School of the University of Penn.

                                                                                                  • Comments extensively on the economy and financial markets
                                                                                                  • Wrote two books, but most prominent is
                                                                                                  • Stocks for the Long Run: The Definitive Guide to Financial Market Returns and Long-Term Investment Strategies
                                                                                                  
                                                                                                  

                                                                                                  History of the real return on long-term US government bonds

                                                                                                  
                                                                                                  

                                                                                                  
                                                                                                  

                                                                                                  Global Markets

                                                                                                  World yield curve inversion is falling because of rising LT rates

                                                                                                  Interest rate level – 5.4% world 3m yield, 10yr 4.4%; LT rates much higher in EM

                                                                                                  • World 3m rates were 5.4% in Sept., DM rates were 4.4%, and EM rates were 6.9%, a 2.6ppt premium
                                                                                                  • World 1yr rates were 5.1% in Sept., DM rates were 4.3%, and EM rates were 6.2%, a 1.9ppt premium
                                                                                                  • World 10yr rates were 4.7% in Sept., DM rates were 3.8%, and EM rates were 5.9%, a 2ppt premium
                                                                                                  
                                                                                                  

                                                                                                  Year-on-year changes – DM 3m yield rose from lower base; fast DM LT rate rise

                                                                                                  • 3m yield had a large 2.2ppt YoY rise to 4.4% in DM; there was a smaller 1.4ppt rise in EM
                                                                                                  • 1yr rates only increased 0.7ppts YoY in EM; but were up a large 1.4ppt YoY in DM
                                                                                                  • 10yr EM rates up only 0.2ppts YoY, DM rates rose by a much higher 0.7ppts
                                                                                                  
                                                                                                  

                                                                                                  Rate progression – DM tightening has stopped but continues in EM

                                                                                                  • 3m rates were flat MoM in DM and are on the rise in EM
                                                                                                  • A 0.5ppt MoM rise in EM 1yr yield is raising World yields; DM yield was flat
                                                                                                  • Sept 10yr yield rose in both DM and EM, up about 0.4ppts MoM
                                                                                                  
                                                                                                  

                                                                                                  Yield curve – Rising LT rates pushed world past August peak inversion

                                                                                                  • August looks to have been World peak inversion as LT yields have been rising
                                                                                                  • World 3m rates rose fast, but now LT rates have started to rise
                                                                                                  • May looks to have been DM peak inversion as LT yields start to rise
                                                                                                  • 3m DM rates have flattened, but LT rates have been rising, reducing yield curve inversion
                                                                                                  • August looks to have been EM peak inversion as LT yields have been rising
                                                                                                  • After a year of significant rises in EM ST rates, LT rates have started rising, reducing inversion
                                                                                                  
                                                                                                  

                                                                                                  Key points and the bottom line

                                                                                                  • 5.4% world 3m yield, 10yr 4.4%; LT rates much higher in EM
                                                                                                  • DM 3m yield rose from lower base; fast DM LT rate rise
                                                                                                  • DM tightening has stopped but continues in EM
                                                                                                  • Rising LT rates pushed world past August peak inversion
                                                                                                  • World yield curve inversion is falling because of rising LT rates
                                                                                                  
                                                                                                  

                                                                                                  Developed Market Regions

                                                                                                  Rising LT rates are reducing yield curve inversion fastest in DM Americas and DM Europe

                                                                                                  Interest rate level – High DM Americas rates, EM Europe lower, and DM Pacific much lower

                                                                                                  • DM Americas 3m rates were 5.4% in Sept, DM Europe rates were 4.0%, DM Pacific rates were 1.4%
                                                                                                  • DM Americas 1yr rates were 5.5% in Sept, DM Europe rates were 3.7%, DM Pacific rates were 1.6%
                                                                                                  • DM Americas 10yr rates were 4.5% in Sept, DM Europe rates were 3.6%, DM Pacific rates were 2.1%
                                                                                                  
                                                                                                  

                                                                                                  Year-on-year changes – ST rates rising in DM Europe, LT rates rising in DM Americas

                                                                                                  • 2.8ppts YoY 3m rate rise in DM Europe, to 4%; up only 0.5ppt to a low 1.4% in DM Pacific
                                                                                                  • DM Americas and Europe had a high 1.5ppt rise in 1yr rate; 0.5ppt in DM Pacific to a low 1.6%
                                                                                                  • DM Americas had the highest rise in 10yr yields, up 0.8ppts, but other regions are rising as well
                                                                                                  
                                                                                                  

                                                                                                  Rate progression – Rates hardly moved MoM across all DM regions

                                                                                                  • DM Europe central bank tightening drove fast 3m rate YoY rise; rates flat MoM in all DM regions
                                                                                                  • 1yr rate barely moved MoM in all DM regions
                                                                                                  • 10yr yield rising fastest MoM in DM Americas and Europe, slow MoM rise in DM Pacific
                                                                                                  
                                                                                                  

                                                                                                  Yield curve – Rising LT rates in DM Americas and Europe flattening yield curve; normal in DM Pacific

                                                                                                  • DM Americas inversion peaked in May 2023; LT rate rise reduced inversion by 0.5ppts MoM
                                                                                                  • DM Europe yield curve inversion peaked a bit later, in August, and fell MoM due to LT rate rise
                                                                                                  • DM Pacific yield curve never inverted as it never went through a US Fed-style hiking cycle
                                                                                                  
                                                                                                  

                                                                                                  Key points and the bottom line

                                                                                                  • High DM Americas rates, EM Europe lower, and DM Pacific much lower
                                                                                                  • ST rates rising in DM Europe, LT rates rising in DM Americas
                                                                                                  • Rates hardly moved MoM across all DM regions
                                                                                                  • Rising LT rates in DM Americas and Europe flattening yield curve; normal in DM Pacific
                                                                                                  • Rising LT rates are reducing yield curve inversion fastest in DM Americas and DM Europe
                                                                                                  
                                                                                                  

                                                                                                  Emerging Market Regions

                                                                                                  Rates are high across EMs, crushing in FMs, and low in EM Asia

                                                                                                  Interest rate level – ST EM rates high, ranging from 12% to 35%, but a low 3.2% in EM Asia

                                                                                                  • EM Americas 3m rates were 11.9% in Sept, EM Asia rates were 3.2%, EM Europe rates were 11.6%, EM ME&A rates were 15.7%, Frontier rates were 33.5%
                                                                                                  • EM Americas 1yr rates were 11.3% in Sept, EM Asia rates were 3.1%, EM Europe rates were 15.2%, EM ME&A rates were 25.2%, Frontier rates were 16%
                                                                                                  • EM Americas 10yr rates were 11% in Sept, EM Asia rates were 3.6%, EM Europe rates were 12.5%, EM ME&A rates were 17.5%, Frontier rates were 11%
                                                                                                  
                                                                                                  

                                                                                                  Year-on-year changes – ST rates in FM and EM ME&A are up, LT rates are rising fast in EM Europe

                                                                                                  • Biggest YoY rise of 3m yields in Frontier markets, up 10.6ppt, and EM ME&A up 4.6ppt
                                                                                                  • 1yr yield rose most YoY in EM ME&A, up 7.4ppt and EM Europe up 5.2ppt
                                                                                                  • 10yr yields flat YoY in EM Americas; 3.2ppt rise in EM Europe and 2.9ppt rise in EM ME&A
                                                                                                  
                                                                                                  

                                                                                                  Rate progression – FM ST rates up massively, but flat MoM, LT rates rising in EM Europe

                                                                                                  • 3m rates up MoM in EM Europe; down in super high FMs and high EM Americas; flat in EM Asia
                                                                                                  • 1yr yields show significant rise in EM Europe; High in EM ME&A; Low in EM Asia
                                                                                                  • LT rates are up across EMs, rising particularly fast MoM in EM Europe, low and flat in EM Asia
                                                                                                  
                                                                                                  

                                                                                                  Yield curve – Inversion massive in FM, falling in EM Americas; normal in EM Asia, Europe, and EM ME&A

                                                                                                  • EM Americas yield curve inverted slightly more than World; but peaked in June 2023
                                                                                                  • EM ME&A yield curve never inverted as ST rates have always been high
                                                                                                  • Frontier yield curve inversion peaked in August 2023, but crushing ST rates remain
                                                                                                  
                                                                                                  

                                                                                                  Key points and the bottom line

                                                                                                  • ST EM rates high, ranging from 12% to 35%, but a low 3.2% in EM Asia
                                                                                                  • ST rates in FM and EM ME&A are up, LT rates are rising fast in EM Europe
                                                                                                  • FM ST rates up massively, but flat MoM, LT rates rising in EM Europe
                                                                                                  • Inversion massive in FM, falling in EM Americas; normal in EM Asia, Europe, and EM ME&A
                                                                                                  • Rates are high across EMs, crushing in FMs, and low in EM Asia
                                                                                                  
                                                                                                  

                                                                                                  Developed Countries

                                                                                                  France and Germany ST rates rising; DM countries have past peak yield curve inversion due to rising LT rates

                                                                                                  Interest rate level – US/UK have 5.5% ST and 4.6% LT rates, Germany and France lower at 3.6%

                                                                                                  • US 3m rates were 5.5% in Sept, Japanese rates were 0.2%, German rates were 3.6%, UK rates were 5.4%, French rates were 3.8%
                                                                                                  • US 1yr rates were 5.5% in Sept, Japanese rates were zero, German rates were 3.7%, UK rates were 5.1%, French rates were 3.8%
                                                                                                  • US 10yr rates were 4.6% in Sept, Japanese rates were 0.8%, German rates were 2.8%, UK rates were 4.4%, French rates were 3.4%
                                                                                                  
                                                                                                  

                                                                                                  Year-on-year changes – ST rates are rising fast in France and Germany, LT rates rising most in the US

                                                                                                  • Fastest YoY 3m yield rise in France and Germany, up about 3ppt; no change in Japan
                                                                                                  • 1yr yield up about 2ppts in France and Germany; Japan flat
                                                                                                  • Biggest 10yr yield rise in the US, followed by France and Germany
                                                                                                  
                                                                                                  

                                                                                                  Rate progression – MoM LT rates rising in the US, Germany, France, UK and Japan are flat MoM

                                                                                                  • 3m rates rose most in France and Germany; US and UK have steadied; Japan remains flat
                                                                                                  • 1yr rates rose most in France and Germany; US is rising MoM; Japan remains flat
                                                                                                  • LT rates are up half ppt in the US, Germany, and France; even Japan has been rising
                                                                                                  
                                                                                                  

                                                                                                  Yield curve – Germany, UK, and France passed peak inversion in Aug; US passed in May

                                                                                                  • US yield curve inversion peaked in May 2023; 10yr rates rose by 50bp MoM in Sep 2023
                                                                                                  • Japan had a tiny MoM 0.1ppt increase in both short and long-term rates, never inverted
                                                                                                  • The deepest inversion in Germany was Aug 2023; rising LT rates have reduced inversion
                                                                                                  • The deepest inversion in the UK was Aug 2023; tiny LT rate rise, and tiny ST rate fall MoM
                                                                                                  • The deepest inversion in France was Aug 2023; LT rates up 4bp MoM
                                                                                                  
                                                                                                  

                                                                                                  Key points and the bottom line

                                                                                                  • US/UK have 5.5% ST and 4.6% LT rates, Germany and France lower at 3.6%
                                                                                                  • ST rates are rising fast YoY in France and Germany, LT rates rising most in the US
                                                                                                  • LT rates rising MoM in the US, Germany, France; UK and Japan are flat MoM
                                                                                                  • Germany, UK, and France just passed peak inversion in Aug; US passed in May
                                                                                                  • France and Germany ST rates rising; DM countries have past peak yield curve inversion due to rising LT rates
                                                                                                  
                                                                                                  

                                                                                                  Emerging Countries

                                                                                                  Rates are low in China, which, together with India, never inverted

                                                                                                  Interest rate level – Low 2-4% rates in China and Korea, 7% in India, and 12% in Russia and Brazil

                                                                                                  • Chinese 3m rates were 2.3% in Sept, Indian rates were 6.9%, Korean rates were 3.6%, Russian rates were 12.4%, Brazilian rates were 12.3%
                                                                                                  • Chinese 1yr rates were 2.2% in Sept, Indian rates were 7%, Korean rates were 3.6%, Russian rates were 16.5%, Brazilian rates were 11%
                                                                                                  • Chinese 10yr rates were 2.7% in Sept, Indian rates were 7.2%, Korean rates were 4%, Russian rates were 12.9%, Brazilian rates were 11.7%
                                                                                                  
                                                                                                  

                                                                                                  Year-on-year changes – ST rates in China, India, and Korea up less than 1ppt, LT rates flat; rates rising in Russia

                                                                                                  • 3m yield up most YoY in India and Korea, followed by China; down in Brazil
                                                                                                  • 1yr yield was up most YoY in Russia, down in Brazil
                                                                                                  • 10yr yield was down a bit YoY in China, India, Korea, and Brazil; up only in Russia
                                                                                                  
                                                                                                  

                                                                                                  Rate progression – Yields are flat in China, India, and Korea, rising in Russia and falling in Brazil

                                                                                                  • 3m yield flat MoM in India, Korea, and Russia; rising a bit MoM in China, falling in Brazil
                                                                                                  • 1yr yield rising fast in Russia; down MoM in India and Brazil
                                                                                                  • 10yr yield was up YoY only in Russia but up MoM slightly in China, India, Korea, & Brazil
                                                                                                  
                                                                                                  

                                                                                                  Yield curve – Yield curves never inverted in China and India; Russia's inversion stopped; Brazil passed inversion peak

                                                                                                  • China never inverted; ST rates were up 30bps MoM, LT rates were up only 10bps
                                                                                                  • India never inverted; nearly flat yield curve has remained unchanged MoM
                                                                                                  • Korea saw a brief and mild inversion in Jan 2023; slight MoM steepening w/ LT rates up
                                                                                                  • Peak Russian inversion Oct 2022; LT rates up nearly 1ppt MoM
                                                                                                  • Peak Brazil yield curve inversion in Jun 2023; nearly equal MoM fall in ST rates and rise in LT
                                                                                                  
                                                                                                  

                                                                                                  Key points and the bottom line

                                                                                                  • Low 2-4% rates in China and Korea, 7% in India, and 12% in Russia and Brazil
                                                                                                  • ST rates in China, India, and Korea are up less than 1ppt, LT rates flat; rates rising in Russia
                                                                                                  • Yields are flat in China, India, and Korea, rising in Russia and falling in Brazil
                                                                                                  • Yield curves never inverted in China and India; Russia's inversion stopped; Brazil passed peak
                                                                                                  • Rates are low in China, which, together with India, never inverted
                                                                                                  
                                                                                                  

                                                                                                   

                                                                                                  Click here to get the PDF with all charts and graphs

                                                                                                   

                                                                                                  Andrew’s books

                                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                  • My Worst Investment Ever
                                                                                                  • 9 Valuation Mistakes and How to Avoid Them
                                                                                                  • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                  
                                                                                                  

                                                                                                  Andrew’s online programs

                                                                                                  • Valuation Master Class
                                                                                                  • The Become a Better Investor Community
                                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                  • Finance Made Ridiculously Simple
                                                                                                  • FVMR Investing: Quantamental Investing Across the World
                                                                                                  • Become a Great Presenter and Increase Your Influence
                                                                                                  • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                  • Achieve Your Goals
                                                                                                  
                                                                                                  

                                                                                                  Connect with Andrew Stotz:

                                                                                                  • astotz.com
                                                                                                  • LinkedIn
                                                                                                  • Facebook
                                                                                                  • Instagram
                                                                                                  • Threads
                                                                                                  • Twitter
                                                                                                  • YouTube
                                                                                                  • My Worst Investment Ever Podcast
                                                                                                  
                                                                                                  

                                                                                                  
                                                                                                  

                                                                                                  ]]>bdba7669-60c3-4cd0-9548-d01793c918bbThu, 19 Oct 2023 06:00:00 +070012:37falsefullWilliam Cohan – Get the Numbers Right Before You InvestBIO: William D. Cohan, a former senior Wall Street M&A investment banker for 17 years at Lazard Frères & Co., Merrill Lynch, and JPMorgan Chase, is the New York Times bestselling author of seven non-fiction narratives, including his most recent book called Power Failure: The Rise and Fall of an American Idol.

                                                                                                  STORY: In 1990, William asked a trader to buy him 10 shares in Berkshire Hathaway, thinking a share was selling at $1,200, only to be told it was $12,000. He decided to keep two shares and sold the other eight. Had William invested $120,000 for the 10 shares in Berkshire Hathaway in 1990, they would be worth $7.4 million today.

                                                                                                  LEARNING: Get the numbers right before you invest.

                                                                                                   

                                                                                                  “I decided to write this book for people who wanted to know about how Wall Street works but were afraid to ask how things work.”

                                                                                                  William Cohan

                                                                                                   

                                                                                                  Guest profile

                                                                                                  William D. Cohan, a former senior Wall Street M&A investment banker for 17 years at Lazard Frères & Co., Merrill Lynch, and JPMorgan Chase, is the New York Times bestselling author of seven non-fiction narratives, including his most recent book called Power Failure: The Rise and Fall of an American Idol.

                                                                                                  Worst investment ever

                                                                                                  In 1990, William was interested in buying some Berkshire Hathaway stock. The company he was working for at the time, Lazard, had a Quotron machine on each floor. William used the machine to get Berkshire’s stock price of the day and got $1,200 a share. William went down to the company’s trader and told him that he wanted to buy 10 shares of Berkshire Hathaway. William figured 1,200 x 10, that’s $12,000, and as a first-year associate, he didn’t have much money but figured he had 12,000 extra dollars to invest in Warren Buffett’s Berkshire Hathaway shares.

                                                                                                  Twenty minutes later, the trader called William back, and he said the trade was done and to pay $120,000. William was in shock because he thought he was supposed to pay $12,000 and not $120,000. The trader explained that the Quotron machine only goes to four decimal points, so he’d gotten $1,200.

                                                                                                  William didn’t have $120,000, so he decided to keep only two shares at $24,000. The trader sold the other eight back into the market. Now, 33 years later, the Berkshire Hathaway stock is trading for something like $540,000 a share. William’s two shares are now worth over a million dollars, and he only paid $24,000 for them, which is nice. But he also let go of eight shares. Had he invested $120,000 for the 10 shares in Berkshire Hathaway in 1990, they would be worth $7.4 million today.

                                                                                                  Lessons learned

                                                                                                  • Get the numbers right before you invest.
                                                                                                  
                                                                                                  

                                                                                                  William’s recommendations

                                                                                                  William recommends his books because he believes they’re great resources for learning about important events and companies on Wall Street.

                                                                                                  No.1 goal for the next 12 months

                                                                                                  William’s number one goal for the next 12 months is to continue writing his new book and the weekly writing assignments for POC.

                                                                                                  Parting words

                                                                                                   

                                                                                                  “Enjoy your life as much as you can. No one gets out alive.”

                                                                                                  William Cohan

                                                                                                   

                                                                                                  Connect with William Cohan

                                                                                                  • LinkedIn
                                                                                                  • Twitter
                                                                                                  • Website
                                                                                                  • Books
                                                                                                  
                                                                                                  

                                                                                                  Andrew’s books

                                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                  • My Worst Investment Ever
                                                                                                  • 9 Valuation Mistakes and How to Avoid Them
                                                                                                  • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                  
                                                                                                  

                                                                                                  Andrew’s online programs

                                                                                                  • Valuation Master Class
                                                                                                  • The Become a Better Investor Community
                                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                  • Finance Made Ridiculously Simple
                                                                                                  • FVMR Investing: Quantamental Investing Across the World
                                                                                                  • Become a Great Presenter and Increase Your Influence
                                                                                                  • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                  • Achieve Your Goals
                                                                                                  
                                                                                                  

                                                                                                  Connect with Andrew Stotz:

                                                                                                  • astotz.com
                                                                                                  • LinkedIn
                                                                                                  • Facebook
                                                                                                  • Instagram
                                                                                                  • Threads
                                                                                                  • Twitter
                                                                                                  • YouTube
                                                                                                  • My Worst Investment Ever Podcast
                                                                                                  
                                                                                                  ]]>BIO: William D. Cohan, a former senior Wall Street M&A investment banker for 17 years at Lazard Frères & Co., Merrill Lynch, and JPMorgan Chase, is the New York Times bestselling author of seven non-fiction narratives, including his most recent book called Power Failure: The Rise and Fall of an American Idol.

                                                                                                  STORY: In 1990, William asked a trader to buy him 10 shares in Berkshire Hathaway, thinking a share was selling at $1,200, only to be told it was $12,000. He decided to keep two shares and sold the other eight. Had William invested $120,000 for the 10 shares in Berkshire Hathaway in 1990, they would be worth $7.4 million today.

                                                                                                  LEARNING: Get the numbers right before you invest.

                                                                                                   

                                                                                                  “I decided to write this book for people who wanted to know about how Wall Street works but were afraid to ask how things work.”

                                                                                                  William Cohan

                                                                                                   

                                                                                                  Guest profile

                                                                                                  William D. Cohan, a former senior Wall Street M&A investment banker for 17 years at Lazard Frères & Co., Merrill Lynch, and JPMorgan Chase, is the New York Times bestselling author of seven non-fiction narratives, including his most recent book called Power Failure: The Rise and Fall of an American Idol.

                                                                                                  Worst investment ever

                                                                                                  In 1990, William was interested in buying some Berkshire Hathaway stock. The company he was working for at the time, Lazard, had a Quotron machine on each floor. William used the machine to get Berkshire’s stock price of the day and got $1,200 a share. William went down to the company’s trader and told him that he wanted to buy 10 shares of Berkshire Hathaway. William figured 1,200 x 10, that’s $12,000, and as a first-year associate, he didn’t have much money but figured he had 12,000 extra dollars to invest in Warren Buffett’s Berkshire Hathaway shares.

                                                                                                  Twenty minutes later, the trader called William back, and he said the trade was done and to pay $120,000. William was in shock because he thought he was supposed to pay $12,000 and not $120,000. The trader explained that the Quotron machine only goes to four decimal points, so he’d gotten $1,200.

                                                                                                  William didn’t have $120,000, so he decided to keep only two shares at $24,000. The trader sold the other eight back into the market. Now, 33 years later, the Berkshire Hathaway stock is trading for something like $540,000 a share. William’s two shares are now worth over a million dollars, and he only paid $24,000 for them, which is nice. But he also let go of eight shares. Had he invested $120,000 for the 10 shares in Berkshire Hathaway in 1990, they would be worth $7.4 million today.

                                                                                                  Lessons learned

                                                                                                  • Get the numbers right before you invest.
                                                                                                  
                                                                                                  

                                                                                                  William’s recommendations

                                                                                                  William recommends his books because he believes they’re great resources for learning about important events and companies on Wall Street.

                                                                                                  No.1 goal for the next 12 months

                                                                                                  William’s number one goal for the next 12 months is to continue writing his new book and the weekly writing assignments for POC.

                                                                                                  Parting words

                                                                                                   

                                                                                                  “Enjoy your life as much as you can. No one gets out alive.”

                                                                                                  William Cohan

                                                                                                   

                                                                                                  Connect with William Cohan

                                                                                                  • LinkedIn
                                                                                                  • Twitter
                                                                                                  • Website
                                                                                                  • Books
                                                                                                  
                                                                                                  

                                                                                                  Andrew’s books

                                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                  • My Worst Investment Ever
                                                                                                  • 9 Valuation Mistakes and How to Avoid Them
                                                                                                  • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                  
                                                                                                  

                                                                                                  Andrew’s online programs

                                                                                                  • Valuation Master Class
                                                                                                  • The Become a Better Investor Community
                                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                  • Finance Made Ridiculously Simple
                                                                                                  • FVMR Investing: Quantamental Investing Across the World
                                                                                                  • Become a Great Presenter and Increase Your Influence
                                                                                                  • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                  • Achieve Your Goals
                                                                                                  
                                                                                                  

                                                                                                  Connect with Andrew Stotz:

                                                                                                  • astotz.com
                                                                                                  • LinkedIn
                                                                                                  • Facebook
                                                                                                  • Instagram
                                                                                                  • Threads
                                                                                                  • Twitter
                                                                                                  • YouTube
                                                                                                  • My Worst Investment Ever Podcast
                                                                                                  
                                                                                                  ]]>6109b574-8205-4af5-b94b-031ee068c9fbWed, 18 Oct 2023 06:00:00 +070038:40falsefullNeil Johnson – Take the Profit When You CanBIO: Neil Johnson is a renowned finance expert with over 30 years of experience in investment banking, merchant banking, and research analysis in Canadian and UK capital markets.

                                                                                                  STORY: Neil invested in an internet company building website templates when the internet was just starting. The company filed to go public, but the financiers kept delaying the process and never went public. Six months later, the company went to zero. Neil lost his entire investment.

                                                                                                  LEARNING: Take the profit when you can. Take some money out and play with the rest. Do your due diligence.

                                                                                                   

                                                                                                  “Try not to be overly greedy. There’s something about leaving a little on the table for someone else.”

                                                                                                  Neil Johnson

                                                                                                   

                                                                                                  Guest profile

                                                                                                  Neil Johnson is a renowned finance expert with over 30 years of experience in investment banking, merchant banking, and research analysis in both Canadian and UK capital markets.

                                                                                                  He currently serves as the Executive Director and Chief Executive Officer of Duke Royalty. He is responsible for leading deal origination, due diligence, and structuring for Duke, a $300 million alternative finance investment company listed on the London Stock Exchange.

                                                                                                  Neil’s expertise as CEO of Duke Royalty and in his prior role as European Head of Investment Banking at Canaccord Genuity is invaluable for business owners of private companies and investors in public companies.

                                                                                                  He has played an instrumental role in the growth and success of companies, raising over $5 billion in funding for hundreds of companies during his 19-year tenure.

                                                                                                  Worst investment ever

                                                                                                  During the run-up to the.com one era, when the internet was starting, Neil was a young internet analyst with some exposure to some of the high-flying stocks of the day. He learned of a company that was creating website templates. The company was looking for investors, and Neil thought it was a good investment, so he invested his savings. Neil also charged the company an investment banking fee that he was taking in stock.

                                                                                                  Though the business had a good product, it was too early into the market, so no one paid attention. Neil was getting in at 50 cents a share. A few years later, the internet bubble enveloped the company. The founders got a call from one of the biggest internet financiers in Silicon Valley and got signed up to go public.

                                                                                                  They did a pre-public round, so they wanted to buy all the shares they could get. They tried to get Neil to sell his shares to them at $5 a share, which was ten times more than he paid for his shares. He, however, wasn’t interested in selling his shares as he believed the company would grow and the shares would be worth a lot more.

                                                                                                  The company filed to go public in March 2000, and now the shares were selling at $15. They kept delaying the process and never went public. They had ballooned the management team and company costs. The company had about $25 million on the balance sheet, but management blew through all of it. Six months later, the company went to zero. Neil lost his entire investment.

                                                                                                  Lessons learned

                                                                                                  • Take the profit when you can.
                                                                                                  • Take some money out and play with the rest.
                                                                                                  • Do your due diligence.
                                                                                                  
                                                                                                  

                                                                                                  Andrew’s takeaways

                                                                                                  • You’ve got to have a lot of bets lined up so that one decision doesn’t wipe you out.
                                                                                                  
                                                                                                  

                                                                                                  Actionable advice

                                                                                                  Don’t be overly greedy. There’s something about leaving a little on the table for someone else.

                                                                                                  Neil’s recommendations

                                                                                                  Neil recommends investing in Duke Royalty because cash flow is king.

                                                                                                  No.1 goal for the next 12 months

                                                                                                  Neil’s number one goal for the next 12 months is to continue investing in good companies, get that cash flow out to his investors in dividends, and look for new opportunities.

                                                                                                  Parting words

                                                                                                   

                                                                                                  “Stay safe out there. Investing is never 100%; you just have to win more than you lose.”

                                                                                                  Neil Johnson

                                                                                                   

                                                                                                  [spp-transcript]

                                                                                                   

                                                                                                  Connect with Neil Johnson

                                                                                                  • LinkedIn
                                                                                                  • Website
                                                                                                  
                                                                                                  

                                                                                                  Andrew’s books

                                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                  • My Worst Investment Ever
                                                                                                  • 9 Valuation Mistakes and How to Avoid Them
                                                                                                  • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                  
                                                                                                  

                                                                                                  Andrew’s online programs

                                                                                                  • Valuation Master Class
                                                                                                  • The Become a Better Investor Community
                                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                  • Finance Made Ridiculously Simple
                                                                                                  • FVMR Investing: Quantamental Investing Across the World
                                                                                                  • Become a Great Presenter and Increase Your Influence
                                                                                                  • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                  • Achieve Your Goals
                                                                                                  
                                                                                                  

                                                                                                  Connect with Andrew Stotz:

                                                                                                  • astotz.com
                                                                                                  • LinkedIn
                                                                                                  • Facebook
                                                                                                  • Instagram
                                                                                                  • Threads
                                                                                                  • Twitter
                                                                                                  • YouTube
                                                                                                  • My Worst Investment Ever Podcast
                                                                                                  
                                                                                                  ]]>BIO: Neil Johnson is a renowned finance expert with over 30 years of experience in investment banking, merchant banking, and research analysis in Canadian and UK capital markets.

                                                                                                  STORY: Neil invested in an internet company building website templates when the internet was just starting. The company filed to go public, but the financiers kept delaying the process and never went public. Six months later, the company went to zero. Neil lost his entire investment.

                                                                                                  LEARNING: Take the profit when you can. Take some money out and play with the rest. Do your due diligence.

                                                                                                   

                                                                                                  “Try not to be overly greedy. There’s something about leaving a little on the table for someone else.”

                                                                                                  Neil Johnson

                                                                                                   

                                                                                                  Guest profile

                                                                                                  Neil Johnson is a renowned finance expert with over 30 years of experience in investment banking, merchant banking, and research analysis in both Canadian and UK capital markets.

                                                                                                  He currently serves as the Executive Director and Chief Executive Officer of Duke Royalty. He is responsible for leading deal origination, due diligence, and structuring for Duke, a $300 million alternative finance investment company listed on the London Stock Exchange.

                                                                                                  Neil’s expertise as CEO of Duke Royalty and in his prior role as European Head of Investment Banking at Canaccord Genuity is invaluable for business owners of private companies and investors in public companies.

                                                                                                  He has played an instrumental role in the growth and success of companies, raising over $5 billion in funding for hundreds of companies during his 19-year tenure.

                                                                                                  Worst investment ever

                                                                                                  During the run-up to the.com one era, when the internet was starting, Neil was a young internet analyst with some exposure to some of the high-flying stocks of the day. He learned of a company that was creating website templates. The company was looking for investors, and Neil thought it was a good investment, so he invested his savings. Neil also charged the company an investment banking fee that he was taking in stock.

                                                                                                  Though the business had a good product, it was too early into the market, so no one paid attention. Neil was getting in at 50 cents a share. A few years later, the internet bubble enveloped the company. The founders got a call from one of the biggest internet financiers in Silicon Valley and got signed up to go public.

                                                                                                  They did a pre-public round, so they wanted to buy all the shares they could get. They tried to get Neil to sell his shares to them at $5 a share, which was ten times more than he paid for his shares. He, however, wasn’t interested in selling his shares as he believed the company would grow and the shares would be worth a lot more.

                                                                                                  The company filed to go public in March 2000, and now the shares were selling at $15. They kept delaying the process and never went public. They had ballooned the management team and company costs. The company had about $25 million on the balance sheet, but management blew through all of it. Six months later, the company went to zero. Neil lost his entire investment.

                                                                                                  Lessons learned

                                                                                                  • Take the profit when you can.
                                                                                                  • Take some money out and play with the rest.
                                                                                                  • Do your due diligence.
                                                                                                  
                                                                                                  

                                                                                                  Andrew’s takeaways

                                                                                                  • You’ve got to have a lot of bets lined up so that one decision doesn’t wipe you out.
                                                                                                  
                                                                                                  

                                                                                                  Actionable advice

                                                                                                  Don’t be overly greedy. There’s something about leaving a little on the table for someone else.

                                                                                                  Neil’s recommendations

                                                                                                  Neil recommends investing in Duke Royalty because cash flow is king.

                                                                                                  No.1 goal for the next 12 months

                                                                                                  Neil’s number one goal for the next 12 months is to continue investing in good companies, get that cash flow out to his investors in dividends, and look for new opportunities.

                                                                                                  Parting words

                                                                                                   

                                                                                                  “Stay safe out there. Investing is never 100%; you just have to win more than you lose.”

                                                                                                  Neil Johnson

                                                                                                   

                                                                                                  [spp-transcript]

                                                                                                   

                                                                                                  Connect with Neil Johnson

                                                                                                  • LinkedIn
                                                                                                  • Website
                                                                                                  
                                                                                                  

                                                                                                  Andrew’s books

                                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                  • My Worst Investment Ever
                                                                                                  • 9 Valuation Mistakes and How to Avoid Them
                                                                                                  • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                  
                                                                                                  

                                                                                                  Andrew’s online programs

                                                                                                  • Valuation Master Class
                                                                                                  • The Become a Better Investor Community
                                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                  • Finance Made Ridiculously Simple
                                                                                                  • FVMR Investing: Quantamental Investing Across the World
                                                                                                  • Become a Great Presenter and Increase Your Influence
                                                                                                  • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                  • Achieve Your Goals
                                                                                                  
                                                                                                  

                                                                                                  Connect with Andrew Stotz:

                                                                                                  • astotz.com
                                                                                                  • LinkedIn
                                                                                                  • Facebook
                                                                                                  • Instagram
                                                                                                  • Threads
                                                                                                  • Twitter
                                                                                                  • YouTube
                                                                                                  • My Worst Investment Ever Podcast
                                                                                                  
                                                                                                  ]]>9ef00936-e8a3-4070-a7c3-725832b16175Mon, 16 Oct 2023 06:00:00 +070030:23falsefullJeremy Deal – Use Differentiated Insight to Evaluate an InvestmentBIO: Jeremy Deal manages the Survivor & Thriver Fund LP, a private investment partnership for high-net-worth families globally.

                                                                                                  STORY: In 2012, Jeremy bought Tesla for about $2 a share and sold it eight months later for 50% more. He didn’t have a real differentiated insight to continue believing in Elon Musk’s ability to convince consumers to keep buying Teslas even though the product was of mediocre quality initially.

                                                                                                  LEARNING: Use differentiated insight to evaluate an investment. When evaluating a company, see the bigger picture and look at it for what it is, not just how expensive or cheap it is.

                                                                                                   

                                                                                                  “My mistake was not having any insight into the business other than why I think the OEM contracts made this business look relatively cheap.”

                                                                                                  Jeremy Deal

                                                                                                   

                                                                                                  Guest profile

                                                                                                  Jeremy Deal manages the Survivor & Thriver Fund LP, a private investment partnership for high-net-worth families globally. The fund makes multi-year investments in companies with substantial unrecognized earnings potential. Fund investment criteria are rooted in four basic tenets around business quality.

                                                                                                  Worst investment ever

                                                                                                  In 2012, Jeremy bought Tesla for roughly what would be about $2 a share today and sold it eight months later for 50% more. Looking back, Jeremy sold what would today be worth around $100 million for less than a million dollars.

                                                                                                  Jeremy didn’t understand how bad the competition was for Tesla at the time. He didn’t have a real differentiated insight to continue believing in Elon Musk’s ability to convince consumers to keep buying Teslas even though the product was mediocre to low quality initially and was falling apart.

                                                                                                  Lessons learned

                                                                                                  • Use differentiated insight to evaluate an investment.
                                                                                                  • When evaluating a company, see the bigger picture and look at it for what it is, not just how expensive or cheap it is.
                                                                                                  
                                                                                                  

                                                                                                  Parting words

                                                                                                   

                                                                                                  “When you think about a business over multiple years, consider the intangibles. Think about the competitive advantage of the business and its ability to evolve. Think about the disruption risk in the business you’re competing with.”

                                                                                                  Jeremy Deal

                                                                                                   

                                                                                                  [spp-transcript]

                                                                                                   

                                                                                                  Connect with Jeremy Deal

                                                                                                  • LinkedIn
                                                                                                  • Website
                                                                                                  • Book recommendation
                                                                                                  
                                                                                                  

                                                                                                  Andrew’s books

                                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                  • My Worst Investment Ever
                                                                                                  • 9 Valuation Mistakes and How to Avoid Them
                                                                                                  • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                  
                                                                                                  

                                                                                                  Andrew’s online programs

                                                                                                  • Valuation Master Class
                                                                                                  • The Become a Better Investor Community
                                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                  • Finance Made Ridiculously Simple
                                                                                                  • FVMR Investing: Quantamental Investing Across the World
                                                                                                  • Become a Great Presenter and Increase Your Influence
                                                                                                  • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                  • Achieve Your Goals
                                                                                                  
                                                                                                  

                                                                                                  Connect with Andrew Stotz:

                                                                                                  • astotz.com
                                                                                                  • LinkedIn
                                                                                                  • Facebook
                                                                                                  • Instagram
                                                                                                  • Threads
                                                                                                  • Twitter
                                                                                                  • YouTube
                                                                                                  • My Worst Investment Ever Podcast
                                                                                                  
                                                                                                  ]]>BIO: Jeremy Deal manages the Survivor & Thriver Fund LP, a private investment partnership for high-net-worth families globally.

                                                                                                  STORY: In 2012, Jeremy bought Tesla for about $2 a share and sold it eight months later for 50% more. He didn’t have a real differentiated insight to continue believing in Elon Musk’s ability to convince consumers to keep buying Teslas even though the product was of mediocre quality initially.

                                                                                                  LEARNING: Use differentiated insight to evaluate an investment. When evaluating a company, see the bigger picture and look at it for what it is, not just how expensive or cheap it is.

                                                                                                   

                                                                                                  “My mistake was not having any insight into the business other than why I think the OEM contracts made this business look relatively cheap.”

                                                                                                  Jeremy Deal

                                                                                                   

                                                                                                  Guest profile

                                                                                                  Jeremy Deal manages the Survivor & Thriver Fund LP, a private investment partnership for high-net-worth families globally. The fund makes multi-year investments in companies with substantial unrecognized earnings potential. Fund investment criteria are rooted in four basic tenets around business quality.

                                                                                                  Worst investment ever

                                                                                                  In 2012, Jeremy bought Tesla for roughly what would be about $2 a share today and sold it eight months later for 50% more. Looking back, Jeremy sold what would today be worth around $100 million for less than a million dollars.

                                                                                                  Jeremy didn’t understand how bad the competition was for Tesla at the time. He didn’t have a real differentiated insight to continue believing in Elon Musk’s ability to convince consumers to keep buying Teslas even though the product was mediocre to low quality initially and was falling apart.

                                                                                                  Lessons learned

                                                                                                  • Use differentiated insight to evaluate an investment.
                                                                                                  • When evaluating a company, see the bigger picture and look at it for what it is, not just how expensive or cheap it is.
                                                                                                  
                                                                                                  

                                                                                                  Parting words

                                                                                                   

                                                                                                  “When you think about a business over multiple years, consider the intangibles. Think about the competitive advantage of the business and its ability to evolve. Think about the disruption risk in the business you’re competing with.”

                                                                                                  Jeremy Deal

                                                                                                   

                                                                                                  [spp-transcript]

                                                                                                   

                                                                                                  Connect with Jeremy Deal

                                                                                                  • LinkedIn
                                                                                                  • Website
                                                                                                  • Book recommendation
                                                                                                  
                                                                                                  

                                                                                                  Andrew’s books

                                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                  • My Worst Investment Ever
                                                                                                  • 9 Valuation Mistakes and How to Avoid Them
                                                                                                  • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                  
                                                                                                  

                                                                                                  Andrew’s online programs

                                                                                                  • Valuation Master Class
                                                                                                  • The Become a Better Investor Community
                                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                  • Finance Made Ridiculously Simple
                                                                                                  • FVMR Investing: Quantamental Investing Across the World
                                                                                                  • Become a Great Presenter and Increase Your Influence
                                                                                                  • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                  • Achieve Your Goals
                                                                                                  
                                                                                                  

                                                                                                  Connect with Andrew Stotz:

                                                                                                  • astotz.com
                                                                                                  • LinkedIn
                                                                                                  • Facebook
                                                                                                  • Instagram
                                                                                                  • Threads
                                                                                                  • Twitter
                                                                                                  • YouTube
                                                                                                  • My Worst Investment Ever Podcast
                                                                                                  
                                                                                                  ]]>70416879-953b-4f79-877e-205be21f4125Thu, 12 Oct 2023 06:00:00 +070026:42falsefullWilliam Bernstein – Never Invest Based on the HeadlinesBIO: William Bernstein is a neurologist, a co-founder of Efficient Frontier Advisors – an investment management firm, and has written several titles on finance and economic history.

                                                                                                  STORY: William lost money after investing in palladium futures under the belief that a couple of physicists had perfected the technique of cold fusion to get helium.

                                                                                                  LEARNING: Never invest based on the headlines. Something that everyone knows isn’t worth knowing.

                                                                                                   

                                                                                                  “Something that everyone knows has already been pounded into the market, so it isn’t worth knowing.”

                                                                                                  William Bernstein

                                                                                                   

                                                                                                  Guest profile

                                                                                                  William Bernstein is a neurologist, a co-founder of Efficient Frontier Advisors – an investment management firm, and has written several titles on finance and economic history. He has contributed to the peer-reviewed finance literature and has written for several national publications, including Money Magazine and The Wall Street Journal.

                                                                                                  He has produced several finance titles and four volumes of history, The Birth of Plenty, A Splendid Exchange, Masters of the Word, and The Delusions of Crowds, about, respectively, the economic growth inflection of the early nineteenth century, the history of world trade, the effects of access to technology on human relations and politics, and the history and social psychology of mass manias. He was also the 2017 winner of the CFA Institute’s James R. Vertin Award.

                                                                                                  Worst investment ever

                                                                                                  About 35 years ago, a couple of physicists announced that they had perfected the technique of cold fusion, which enables you to take hydrogen atoms, smash them together, and get helium—the same thing that goes on in a hydrogen bomb. If that were the case, then it meant there was now a source of energy that was too cheap to meter. The limiting factor in that technique was palladium, which was the catalyst. So, palladium went from $100 to $400 an ounce. William thought it would be a good idea to buy palladium futures. He lost his money in that investment.

                                                                                                  Lessons learned

                                                                                                  • Never invest based on the headlines.
                                                                                                  • Something that everyone knows isn’t worth knowing.
                                                                                                  
                                                                                                  

                                                                                                  Andrew’s takeaways

                                                                                                  • Don’t be lured by the seductiveness of headlines.
                                                                                                  
                                                                                                  

                                                                                                  Actionable advice

                                                                                                  Start slow, see how you react to the bear market, and find out your actual risk tolerance in the real world because there’s a big gap between talking to talk and walking the walk.

                                                                                                  No.1 goal for the next 12 months

                                                                                                  William’s number one goal for the next 12 months is to read good nonfiction books and then write reviews.

                                                                                                  Parting words

                                                                                                   

                                                                                                  “Just keep buying.”

                                                                                                  William Bernstein

                                                                                                   

                                                                                                  [spp-transcript]

                                                                                                   

                                                                                                  Connect with William Bernstein

                                                                                                  • Website
                                                                                                  • Books
                                                                                                  
                                                                                                  

                                                                                                  Andrew’s books

                                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                  • My Worst Investment Ever
                                                                                                  • 9 Valuation Mistakes and How to Avoid Them
                                                                                                  • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                  
                                                                                                  

                                                                                                  Andrew’s online programs

                                                                                                  • Valuation Master Class
                                                                                                  • The Become a Better Investor Community
                                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                  • Finance Made Ridiculously Simple
                                                                                                  • FVMR Investing: Quantamental Investing Across the World
                                                                                                  • Become a Great Presenter and Increase Your Influence
                                                                                                  • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                  • Achieve Your Goals
                                                                                                  
                                                                                                  

                                                                                                  Connect with Andrew Stotz:

                                                                                                  • astotz.com
                                                                                                  • LinkedIn
                                                                                                  • Facebook
                                                                                                  • Instagram
                                                                                                  • Threads
                                                                                                  • Twitter
                                                                                                  • YouTube
                                                                                                  • My Worst Investment Ever Podcast
                                                                                                  
                                                                                                  

                                                                                                  Further reading mentioned

                                                                                                  • Angus Deaton, Economics in America: An Immigrant Economist Explores the Land of Inequality
                                                                                                  
                                                                                                  ]]>BIO: William Bernstein is a neurologist, a co-founder of Efficient Frontier Advisors – an investment management firm, and has written several titles on finance and economic history.

                                                                                                  STORY: William lost money after investing in palladium futures under the belief that a couple of physicists had perfected the technique of cold fusion to get helium.

                                                                                                  LEARNING: Never invest based on the headlines. Something that everyone knows isn’t worth knowing.

                                                                                                   

                                                                                                  “Something that everyone knows has already been pounded into the market, so it isn’t worth knowing.”

                                                                                                  William Bernstein

                                                                                                   

                                                                                                  Guest profile

                                                                                                  William Bernstein is a neurologist, a co-founder of Efficient Frontier Advisors – an investment management firm, and has written several titles on finance and economic history. He has contributed to the peer-reviewed finance literature and has written for several national publications, including Money Magazine and The Wall Street Journal.

                                                                                                  He has produced several finance titles and four volumes of history, The Birth of Plenty, A Splendid Exchange, Masters of the Word, and The Delusions of Crowds, about, respectively, the economic growth inflection of the early nineteenth century, the history of world trade, the effects of access to technology on human relations and politics, and the history and social psychology of mass manias. He was also the 2017 winner of the CFA Institute’s James R. Vertin Award.

                                                                                                  Worst investment ever

                                                                                                  About 35 years ago, a couple of physicists announced that they had perfected the technique of cold fusion, which enables you to take hydrogen atoms, smash them together, and get helium—the same thing that goes on in a hydrogen bomb. If that were the case, then it meant there was now a source of energy that was too cheap to meter. The limiting factor in that technique was palladium, which was the catalyst. So, palladium went from $100 to $400 an ounce. William thought it would be a good idea to buy palladium futures. He lost his money in that investment.

                                                                                                  Lessons learned

                                                                                                  • Never invest based on the headlines.
                                                                                                  • Something that everyone knows isn’t worth knowing.
                                                                                                  
                                                                                                  

                                                                                                  Andrew’s takeaways

                                                                                                  • Don’t be lured by the seductiveness of headlines.
                                                                                                  
                                                                                                  

                                                                                                  Actionable advice

                                                                                                  Start slow, see how you react to the bear market, and find out your actual risk tolerance in the real world because there’s a big gap between talking to talk and walking the walk.

                                                                                                  No.1 goal for the next 12 months

                                                                                                  William’s number one goal for the next 12 months is to read good nonfiction books and then write reviews.

                                                                                                  Parting words

                                                                                                   

                                                                                                  “Just keep buying.”

                                                                                                  William Bernstein

                                                                                                   

                                                                                                  [spp-transcript]

                                                                                                   

                                                                                                  Connect with William Bernstein

                                                                                                  • Website
                                                                                                  • Books
                                                                                                  
                                                                                                  

                                                                                                  Andrew’s books

                                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                  • My Worst Investment Ever
                                                                                                  • 9 Valuation Mistakes and How to Avoid Them
                                                                                                  • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                  
                                                                                                  

                                                                                                  Andrew’s online programs

                                                                                                  • Valuation Master Class
                                                                                                  • The Become a Better Investor Community
                                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                  • Finance Made Ridiculously Simple
                                                                                                  • FVMR Investing: Quantamental Investing Across the World
                                                                                                  • Become a Great Presenter and Increase Your Influence
                                                                                                  • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                  • Achieve Your Goals
                                                                                                  
                                                                                                  

                                                                                                  Connect with Andrew Stotz:

                                                                                                  • astotz.com
                                                                                                  • LinkedIn
                                                                                                  • Facebook
                                                                                                  • Instagram
                                                                                                  • Threads
                                                                                                  • Twitter
                                                                                                  • YouTube
                                                                                                  • My Worst Investment Ever Podcast
                                                                                                  
                                                                                                  

                                                                                                  Further reading mentioned

                                                                                                  • Angus Deaton, Economics in America: An Immigrant Economist Explores the Land of Inequality
                                                                                                  
                                                                                                  ]]>ca6f1609-d56c-431f-a3ff-2aea1eca1300Wed, 11 Oct 2023 06:00:00 +070048:55falsefullISMS 32: 5 Signs of Impending RecessionWarning Sign #1 - Inverted yield curve
                                                                                                  • It’s not the first time the Fed has fought inflation
                                                                                                  • Fed has been fighting inflation with its main tool
                                                                                                  • Steep rate hikes have historically preceded recessions
                                                                                                  • Fed’s tool to fight inflation is raising the federal funds rate
                                                                                                  • This is the fastest and most aggressive rate-hike cycle by the Fed since the 1980s
                                                                                                  • After the 0.25%-hike in Feb 2023, the current rate-hike cycle became the most aggressive since the 1980s
                                                                                                  • The Fed has hiked rates by 5.25% in the current cycle
                                                                                                  • This has resulted in short-term rates becoming higher than long-term (yield-cure inversion)
                                                                                                  • Yield-curve inversion signals 4Q23 US recession
                                                                                                  • All recessions in the US since 1968 were preceded by an inverted yield curve
                                                                                                  • As it turns, recession typically follows
                                                                                                  • Average time from inversion, until the recession started, was about 1 year (so 4Q23)
                                                                                                  
                                                                                                  

                                                                                                  Warning Sign #2 - Peak employment

                                                                                                  • US is now at peak employment
                                                                                                  • Peak employment precedes recession
                                                                                                  • Unemployment now at 3.8% (same as April 2000)
                                                                                                  • Puts upward pressure on wages, which is inflationary
                                                                                                  • On the flip side, a strong labor market can keep the recession at bay
                                                                                                  
                                                                                                  

                                                                                                  Warning Sign #3 - Slowdown in bank lending

                                                                                                  • Business lending has slowed; real estate and consumer loans flat
                                                                                                  • Warns about a slowdown in business activity
                                                                                                  
                                                                                                  

                                                                                                  Warning Sign #4 - Leading indicators falling & bankruptcies rising

                                                                                                  • Composite leading indicators falling but seen a slight rebound recently
                                                                                                  • The indicator looks at factors aimed at providing early signals of turns in the business cycle
                                                                                                  • While the indicator has given false signals before, recessions have typically followed large falls
                                                                                                  • 72 US bankruptcy filings in 1H23, more than the previous two years
                                                                                                  • Private and public companies with over US$100m in assets at the time of bankruptcy filing
                                                                                                  • “Filings in the first seven months of 2023 surpassed total filings for the previous year”
                                                                                                  • S&P Global Market Intelligence recorded 64 corporate bankruptcy filings in July, the largest monthly total since March and more filings than in any single month in 2021 or 2022
                                                                                                  
                                                                                                  

                                                                                                  Warning Sign #5 - Weakening consumer

                                                                                                  • Retail sales have been slowing, which typically precedes a recession
                                                                                                  • Consumer sentiment has fallen since 2020
                                                                                                  • Credit card debt at US$1trn and growing while past due bills are rising
                                                                                                  
                                                                                                  

                                                                                                   

                                                                                                  Click here to get the PDF with all charts and graphs

                                                                                                   

                                                                                                  Andrew’s books

                                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                  • My Worst Investment Ever
                                                                                                  • 9 Valuation Mistakes and How to Avoid Them
                                                                                                  • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                  
                                                                                                  

                                                                                                  Andrew’s online programs

                                                                                                  • Valuation Master Class
                                                                                                  • The Become a Better Investor Community
                                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                  • Finance Made Ridiculously Simple
                                                                                                  • FVMR Investing: Quantamental Investing Across the World
                                                                                                  • Become a Great Presenter and Increase Your Influence
                                                                                                  • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                  • Achieve Your Goals
                                                                                                  
                                                                                                  

                                                                                                  Connect with Andrew Stotz:

                                                                                                  • astotz.com
                                                                                                  • LinkedIn
                                                                                                  • Facebook
                                                                                                  • Instagram
                                                                                                  • Threads
                                                                                                  • Twitter
                                                                                                  • YouTube
                                                                                                  • My Worst Investment Ever Podcast
                                                                                                  
                                                                                                  ]]>Warning Sign #1 - Inverted yield curve
                                                                                                  • It’s not the first time the Fed has fought inflation
                                                                                                  • Fed has been fighting inflation with its main tool
                                                                                                  • Steep rate hikes have historically preceded recessions
                                                                                                  • Fed’s tool to fight inflation is raising the federal funds rate
                                                                                                  • This is the fastest and most aggressive rate-hike cycle by the Fed since the 1980s
                                                                                                  • After the 0.25%-hike in Feb 2023, the current rate-hike cycle became the most aggressive since the 1980s
                                                                                                  • The Fed has hiked rates by 5.25% in the current cycle
                                                                                                  • This has resulted in short-term rates becoming higher than long-term (yield-cure inversion)
                                                                                                  • Yield-curve inversion signals 4Q23 US recession
                                                                                                  • All recessions in the US since 1968 were preceded by an inverted yield curve
                                                                                                  • As it turns, recession typically follows
                                                                                                  • Average time from inversion, until the recession started, was about 1 year (so 4Q23)
                                                                                                  
                                                                                                  

                                                                                                  Warning Sign #2 - Peak employment

                                                                                                  • US is now at peak employment
                                                                                                  • Peak employment precedes recession
                                                                                                  • Unemployment now at 3.8% (same as April 2000)
                                                                                                  • Puts upward pressure on wages, which is inflationary
                                                                                                  • On the flip side, a strong labor market can keep the recession at bay
                                                                                                  
                                                                                                  

                                                                                                  Warning Sign #3 - Slowdown in bank lending

                                                                                                  • Business lending has slowed; real estate and consumer loans flat
                                                                                                  • Warns about a slowdown in business activity
                                                                                                  
                                                                                                  

                                                                                                  Warning Sign #4 - Leading indicators falling & bankruptcies rising

                                                                                                  • Composite leading indicators falling but seen a slight rebound recently
                                                                                                  • The indicator looks at factors aimed at providing early signals of turns in the business cycle
                                                                                                  • While the indicator has given false signals before, recessions have typically followed large falls
                                                                                                  • 72 US bankruptcy filings in 1H23, more than the previous two years
                                                                                                  • Private and public companies with over US$100m in assets at the time of bankruptcy filing
                                                                                                  • “Filings in the first seven months of 2023 surpassed total filings for the previous year”
                                                                                                  • S&P Global Market Intelligence recorded 64 corporate bankruptcy filings in July, the largest monthly total since March and more filings than in any single month in 2021 or 2022
                                                                                                  
                                                                                                  

                                                                                                  Warning Sign #5 - Weakening consumer

                                                                                                  • Retail sales have been slowing, which typically precedes a recession
                                                                                                  • Consumer sentiment has fallen since 2020
                                                                                                  • Credit card debt at US$1trn and growing while past due bills are rising
                                                                                                  
                                                                                                  

                                                                                                   

                                                                                                  Click here to get the PDF with all charts and graphs

                                                                                                   

                                                                                                  Andrew’s books

                                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                  • My Worst Investment Ever
                                                                                                  • 9 Valuation Mistakes and How to Avoid Them
                                                                                                  • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                  
                                                                                                  

                                                                                                  Andrew’s online programs

                                                                                                  • Valuation Master Class
                                                                                                  • The Become a Better Investor Community
                                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                  • Finance Made Ridiculously Simple
                                                                                                  • FVMR Investing: Quantamental Investing Across the World
                                                                                                  • Become a Great Presenter and Increase Your Influence
                                                                                                  • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                  • Achieve Your Goals
                                                                                                  
                                                                                                  

                                                                                                  Connect with Andrew Stotz:

                                                                                                  • astotz.com
                                                                                                  • LinkedIn
                                                                                                  • Facebook
                                                                                                  • Instagram
                                                                                                  • Threads
                                                                                                  • Twitter
                                                                                                  • YouTube
                                                                                                  • My Worst Investment Ever Podcast
                                                                                                  
                                                                                                  ]]>73f3868f-bbdd-4b35-be6f-fa10be823a94Mon, 09 Oct 2023 06:00:00 +070009:36falsefullISMS 31: Global CPI saw 2nd MoM uptick in AugustWill the global CPI slowdown continue? Or will it rebound?

                                                                                                  Global Markets

                                                                                                  Global CPI saw 2nd monthly uptick in August, DM remains below Global; DM and EM are now on the rise

                                                                                                  • Economies across the world have a GDP of about US$97trn and an average CPI of 5.1%
                                                                                                  • DM has US$55trn GDP, and CPI was 4.3%
                                                                                                  • EM has US$42trn GDP, and CPI was 6.1%
                                                                                                  
                                                                                                  

                                                                                                  World CPI was 5.1%, down 3ppts from one year ago; MoM it was up 0.3ppt, a 2nd monthly uptick

                                                                                                  • DM CPI was 4.3%, down 3.3 ppts from one year ago; MoM it was up 0.2ppts
                                                                                                  • It has moved from a 0.5ppts discount to World CPI last year to the current 0.8ppt discount
                                                                                                  • EM CPI was 6.1%, down 2.6 ppts from one year ago; MoM it was up 0.6ppts
                                                                                                  • It has moved from a 0.7ppts premium to World CPI last year to the current 1ppt premium
                                                                                                  
                                                                                                  

                                                                                                  Developed Regions

                                                                                                  DM Americas CPI had 2nd uptick, DM Europe continues its slide, while DM Pacific stays flat at 4%

                                                                                                  • DM Americas is the largest region, with US$28trn of GDP and 3.7% CPI
                                                                                                  • DM Europe has US$15trn GDP and 5.2% CPI
                                                                                                  • DM Pacific has US$8trn GDP and 3.9% CPI
                                                                                                  
                                                                                                  

                                                                                                  DM Americas CPI had 2nd uptick, DM Europe continues its slide, while DM Pacific stays flat at 4%

                                                                                                  • DM Americas CPI was 3.7%, down 4.4ppts from one year ago; MoM it was up 0.4ppts
                                                                                                  • It has moved from a 0.1ppts premium to World CPI last year to the current 1.4ppt discount
                                                                                                  • DM Europe CPI was 5.2%, down 2.9ppts from one year ago; MoM it was down 0.1ppts
                                                                                                  • It has moved from a 0.1ppts premium to World CPI last year to the current 0.1ppt premium
                                                                                                  • DM Pacific CPI was 3.9%, down 0.3ppts from one year ago; MoM it was down 0.1ppts
                                                                                                  • It has moved from a 3.9ppts discount to World CPI last year to the current 1.2ppt discount
                                                                                                  
                                                                                                  

                                                                                                  Emerging Regions

                                                                                                  CPI in EM Asia and Frontier markets re-igniting, EM Europe continues its rise

                                                                                                  • EM Americas had a small GDP of US$4trn and CPI of 5.4%
                                                                                                  • EM Asia had a massive GDP of US$29trn and 1.4% CPI
                                                                                                  • EM Europe had a small US$4trn GDP and a massive 16.5% CPI
                                                                                                  • Emerging Middle East & Africa had a tiny US$2trn GDP and a high 10.9% CPI
                                                                                                  • Frontier markets had a US$3trn GDP and an extremely high 32.3% CPI
                                                                                                  
                                                                                                  

                                                                                                  CPI in EM Asia and Frontier markets re-igniting, EM Europe continues its rise

                                                                                                  • EM Americas CPI was 5.4%, down 3.9ppts from one year ago; MoM it was up 0.1ppts
                                                                                                  • It has moved from a 1.3ppts premium to World CPI last year to the current 0.3ppt premium
                                                                                                  • EM Asia CPI was 1.4%, down 2.1ppts from one year ago; MoM it was up 0.3ppts
                                                                                                  • It has moved from a 4.5ppts discount to World CPI last year to the current 3.6ppt discount
                                                                                                  • EM Europe CPI was 16.5%, down 11.8ppts from one year ago; MoM it was up 2.1ppts
                                                                                                  • It has moved from a 20.3ppts premium to World CPI last year to the current 11.4ppt premium
                                                                                                  • EM ME&A CPI was 10.9%, up 3.9ppts from one year ago; MoM it was flat
                                                                                                  • It has moved from a 1ppts discount to World CPI last year to the current 5.8ppt premium
                                                                                                  • Frontier CPI was 32.3%, up 6ppts from one year ago; MoM it was up 2ppts
                                                                                                  • It has moved from a 18.3ppts premium to World CPI last year to the current 27.2ppt premium
                                                                                                  
                                                                                                  

                                                                                                  Developed Countries

                                                                                                  2nd US CPI uptick; strong 1st uptick in France; Japan and UK steady slide; Germany flat

                                                                                                  • Top five DM countries
                                                                                                  • US GDP was US$25trn, CPI of 3.7%
                                                                                                  • Japan US$5trn and 3.1% CPI
                                                                                                  • Germany US$4.3trn and 6.2% CPI
                                                                                                  • UK: US$3.4trn, 6.8%
                                                                                                  • France: US$3trn/4.6%
                                                                                                  • USA CPI was 3.7%, down 4.5ppts from one year ago; MoM it was up 0.4ppts
                                                                                                  • It has moved from a 0.2ppts premium to World CPI last year to the current 1.4ppt discount
                                                                                                  • Japan CPI was 3.1%, up 0.1ppts from one year ago; MoM it was down 0.1ppts
                                                                                                  • It has moved from a 5ppts discount to World CPI last year to the current 2ppt discount
                                                                                                  • Germany CPI was 6.2%, down 0.9ppts from one year ago; MoM it was flat
                                                                                                  • It has moved from a 0.9ppts discount to World CPI last year to the current 1.1ppt premium
                                                                                                  • UK CPI was 6.8%, down 3.2ppts from one year ago; MoM it was down 0.2ppts
                                                                                                  • It has moved from a 1.9ppts premium to World CPI last year to the current 1.7ppt premium
                                                                                                  • France CPI was 4.6%, down 1.2ppts from one year ago; MoM it was up 0.5ppts
                                                                                                  • It has moved from a 2.2ppts discount to World CPI last year to the current 0.5ppt discount
                                                                                                  
                                                                                                  

                                                                                                  Emerging Countries

                                                                                                  China CPI flat after July deflation; India slows; strong rise in Korea; rising in Russia and Brazil

                                                                                                  • China: US$20trn/0.1%
                                                                                                  • India: US$3.5trn/6.8%
                                                                                                  • Korea: US$1.8trn/3.5%
                                                                                                  • Russia: US$1.8trn/5.2%
                                                                                                  • Brazil: US$1.8trn/4.7%
                                                                                                  • China CPI was 0.1%, down 2.3ppts from one year ago; MoM it was up 0.4ppts
                                                                                                  • It has moved from a 5.7ppts discount to World CPI last year to the current 5ppt discount
                                                                                                  • India CPI was 6.8%, down 0.1ppts from one year ago; MoM it was down 0.6ppts
                                                                                                  • It has moved from a 1.1ppts discount to World CPI last year to the current 1.7ppt premium
                                                                                                  • Korea CPI was 3.5%, down 2.2ppts from one year ago; MoM it was up 1.2ppts
                                                                                                  • It has moved from a 2.4ppts discount to World CPI last year to the current 1.6ppt discount
                                                                                                  • Russia CPI was 5.2%, down 9.2ppts from one year ago; MoM it was up 0.9ppts
                                                                                                  • It has moved from a 6.3ppts premium to World CPI last year to the current 0.1ppt premium
                                                                                                  • Brazil CPI was 4.7%, down 4.1ppts from one year ago; MoM it was up 0.6ppts
                                                                                                  • It has moved from a 0.8ppts premium to World CPI last year to the current 0.4ppt discount
                                                                                                  
                                                                                                  

                                                                                                  Developed Countries

                                                                                                  Highest CPI

                                                                                                  • Sweden CPI was 7.6%, down 2.2ppts from one year ago; MoM it was down 1.8ppts
                                                                                                  • It has moved from a 1.7ppts premium to World CPI last year to the current 2.5ppt premium
                                                                                                  • Austria CPI was 7.5%, down 1.8ppts from one year ago; MoM it was up 0.4ppts
                                                                                                  • It has doubled its 1.2ppts premium to World CPI last year to the current 2.4ppt premium
                                                                                                  • UK CPI was 6.8%, down 3.2ppts from one year ago; MoM it was down 0.2ppts
                                                                                                  • It has moved from a 1.9ppts premium to World CPI last year to the current 1.7ppt premium
                                                                                                  • Ireland CPI was 6.4%, down 2.4ppts from one year ago; MoM it was up 0.5ppts
                                                                                                  • It has moved from a 0.7ppts premium to World CPI last year to the current 1.3ppt premium
                                                                                                  • Germany CPI was 6.2%, down 0.9ppts from one year ago; MoM it was flat
                                                                                                  • It has moved from a 0.9ppts discount to World CPI last year to the current 1.1ppt premium
                                                                                                  
                                                                                                  

                                                                                                  Emerging Countries

                                                                                                  Highest CPI

                                                                                                  • Argentina* CPI was 124.4%, up 45.9ppts from one year ago; MoM it was up 11ppts
                                                                                                  • It has moved from a 70.4ppts premium to World CPI last year to the current 119.3ppt premium
                                                                                                  • Turkey CPI was 60.9%, down 19.6ppts from one year ago; MoM it was up 11.3ppts
                                                                                                  • It has moved from a 72.4ppts premium to World CPI last year to the current 55.8ppt premium
                                                                                                  • Egypt CPI was 38.2%, up 23.3ppts from one year ago; MoM it was up 1ppts
                                                                                                  • It has moved from a 6.9ppts premium to World CPI last year to the current 33.2ppt premium
                                                                                                  • Pakistan* CPI was 28%, up 0.8ppts from one year ago; MoM it was down 0.9ppts
                                                                                                  • It has moved from a 19.1ppts premium to World CPI last year to the current 22.9ppt premium
                                                                                                  • Nigeria* CPI was 26.2%, up 5.6ppts from one year ago; MoM it was up 1.7ppts
                                                                                                  • It has moved from a 12.5ppts premium to World CPI last year to the current 21.1ppt premium
                                                                                                  
                                                                                                  

                                                                                                  *denotes Frontier market

                                                                                                  Developed Countries

                                                                                                  Lowest CPI

                                                                                                  • Switzerland CPI was 1.6%, down 1.8ppts from one year ago; MoM it was down 0.1ppts
                                                                                                  • It has moved from a 4.6ppts discount to World CPI last year to the current 3.5ppt discount
                                                                                                  • Hong Kong CPI was 1.8%, down 0.2ppts from one year ago; MoM it was down 0.1ppts
                                                                                                  • It has moved from a 6.1ppts discount to World CPI last year to the current 3.3ppt discount
                                                                                                  • Denmark CPI was 2.4%, down 6.5ppts from one year ago; MoM it was down 0.7ppts
                                                                                                  • It has moved from a 0.9ppts premium to World CPI last year to the current 2.6ppt discount
                                                                                                  • Spain CPI was 2.7%, down 7.8ppts from one year ago; MoM it was up 0.3ppts
                                                                                                  • It has moved from a 2.4ppts premium to World CPI last year to the current 2.4ppt discount
                                                                                                  • Netherlands CPI was 3%, down 9.1ppts from one year ago; MoM it was down 1.5ppts
                                                                                                  • It has moved from a 4ppts premium to World CPI last year to the current 2.1ppt discount
                                                                                                  
                                                                                                  

                                                                                                  Emerging Countries

                                                                                                  Lowest CPI

                                                                                                  • China CPI was 0.1%, down 2.3ppts from one year ago; MoM it was up 0.4ppts
                                                                                                  • It has moved from a 5.7ppts discount to World CPI last year to the current 5ppt discount
                                                                                                  • Jordan* CPI was 0.9%, down 4.5ppts from one year ago; MoM it was flat
                                                                                                  • It has moved from a 2.6ppts discount to World CPI last year to the current 4.2ppt discount
                                                                                                  • Thailand CPI was 0.9%, down 6.9ppts from one year ago; MoM it was up 0.5ppts
                                                                                                  • It has moved from a 0.2ppts discount to World CPI last year to the current 4.2ppt discount
                                                                                                  • Saudi Arabia CPI was 2%, down 0.9ppts from one year ago; MoM it was down 0.4ppts
                                                                                                  • It has moved from a 5.2ppts discount to World CPI last year to the current 3.1ppt discount
                                                                                                  • Malaysia CPI was 2.1%, down 2.5ppts from one year ago; MoM it was flat
                                                                                                  • It has moved from a...]]>Will the global CPI slowdown continue? Or will it rebound?

                                                                                                    Global Markets

                                                                                                    Global CPI saw 2nd monthly uptick in August, DM remains below Global; DM and EM are now on the rise

                                                                                                    • Economies across the world have a GDP of about US$97trn and an average CPI of 5.1%
                                                                                                    • DM has US$55trn GDP, and CPI was 4.3%
                                                                                                    • EM has US$42trn GDP, and CPI was 6.1%
                                                                                                    
                                                                                                    

                                                                                                    World CPI was 5.1%, down 3ppts from one year ago; MoM it was up 0.3ppt, a 2nd monthly uptick

                                                                                                    • DM CPI was 4.3%, down 3.3 ppts from one year ago; MoM it was up 0.2ppts
                                                                                                    • It has moved from a 0.5ppts discount to World CPI last year to the current 0.8ppt discount
                                                                                                    • EM CPI was 6.1%, down 2.6 ppts from one year ago; MoM it was up 0.6ppts
                                                                                                    • It has moved from a 0.7ppts premium to World CPI last year to the current 1ppt premium
                                                                                                    
                                                                                                    

                                                                                                    Developed Regions

                                                                                                    DM Americas CPI had 2nd uptick, DM Europe continues its slide, while DM Pacific stays flat at 4%

                                                                                                    • DM Americas is the largest region, with US$28trn of GDP and 3.7% CPI
                                                                                                    • DM Europe has US$15trn GDP and 5.2% CPI
                                                                                                    • DM Pacific has US$8trn GDP and 3.9% CPI
                                                                                                    
                                                                                                    

                                                                                                    DM Americas CPI had 2nd uptick, DM Europe continues its slide, while DM Pacific stays flat at 4%

                                                                                                    • DM Americas CPI was 3.7%, down 4.4ppts from one year ago; MoM it was up 0.4ppts
                                                                                                    • It has moved from a 0.1ppts premium to World CPI last year to the current 1.4ppt discount
                                                                                                    • DM Europe CPI was 5.2%, down 2.9ppts from one year ago; MoM it was down 0.1ppts
                                                                                                    • It has moved from a 0.1ppts premium to World CPI last year to the current 0.1ppt premium
                                                                                                    • DM Pacific CPI was 3.9%, down 0.3ppts from one year ago; MoM it was down 0.1ppts
                                                                                                    • It has moved from a 3.9ppts discount to World CPI last year to the current 1.2ppt discount
                                                                                                    
                                                                                                    

                                                                                                    Emerging Regions

                                                                                                    CPI in EM Asia and Frontier markets re-igniting, EM Europe continues its rise

                                                                                                    • EM Americas had a small GDP of US$4trn and CPI of 5.4%
                                                                                                    • EM Asia had a massive GDP of US$29trn and 1.4% CPI
                                                                                                    • EM Europe had a small US$4trn GDP and a massive 16.5% CPI
                                                                                                    • Emerging Middle East & Africa had a tiny US$2trn GDP and a high 10.9% CPI
                                                                                                    • Frontier markets had a US$3trn GDP and an extremely high 32.3% CPI
                                                                                                    
                                                                                                    

                                                                                                    CPI in EM Asia and Frontier markets re-igniting, EM Europe continues its rise

                                                                                                    • EM Americas CPI was 5.4%, down 3.9ppts from one year ago; MoM it was up 0.1ppts
                                                                                                    • It has moved from a 1.3ppts premium to World CPI last year to the current 0.3ppt premium
                                                                                                    • EM Asia CPI was 1.4%, down 2.1ppts from one year ago; MoM it was up 0.3ppts
                                                                                                    • It has moved from a 4.5ppts discount to World CPI last year to the current 3.6ppt discount
                                                                                                    • EM Europe CPI was 16.5%, down 11.8ppts from one year ago; MoM it was up 2.1ppts
                                                                                                    • It has moved from a 20.3ppts premium to World CPI last year to the current 11.4ppt premium
                                                                                                    • EM ME&A CPI was 10.9%, up 3.9ppts from one year ago; MoM it was flat
                                                                                                    • It has moved from a 1ppts discount to World CPI last year to the current 5.8ppt premium
                                                                                                    • Frontier CPI was 32.3%, up 6ppts from one year ago; MoM it was up 2ppts
                                                                                                    • It has moved from a 18.3ppts premium to World CPI last year to the current 27.2ppt premium
                                                                                                    
                                                                                                    

                                                                                                    Developed Countries

                                                                                                    2nd US CPI uptick; strong 1st uptick in France; Japan and UK steady slide; Germany flat

                                                                                                    • Top five DM countries
                                                                                                    • US GDP was US$25trn, CPI of 3.7%
                                                                                                    • Japan US$5trn and 3.1% CPI
                                                                                                    • Germany US$4.3trn and 6.2% CPI
                                                                                                    • UK: US$3.4trn, 6.8%
                                                                                                    • France: US$3trn/4.6%
                                                                                                    • USA CPI was 3.7%, down 4.5ppts from one year ago; MoM it was up 0.4ppts
                                                                                                    • It has moved from a 0.2ppts premium to World CPI last year to the current 1.4ppt discount
                                                                                                    • Japan CPI was 3.1%, up 0.1ppts from one year ago; MoM it was down 0.1ppts
                                                                                                    • It has moved from a 5ppts discount to World CPI last year to the current 2ppt discount
                                                                                                    • Germany CPI was 6.2%, down 0.9ppts from one year ago; MoM it was flat
                                                                                                    • It has moved from a 0.9ppts discount to World CPI last year to the current 1.1ppt premium
                                                                                                    • UK CPI was 6.8%, down 3.2ppts from one year ago; MoM it was down 0.2ppts
                                                                                                    • It has moved from a 1.9ppts premium to World CPI last year to the current 1.7ppt premium
                                                                                                    • France CPI was 4.6%, down 1.2ppts from one year ago; MoM it was up 0.5ppts
                                                                                                    • It has moved from a 2.2ppts discount to World CPI last year to the current 0.5ppt discount
                                                                                                    
                                                                                                    

                                                                                                    Emerging Countries

                                                                                                    China CPI flat after July deflation; India slows; strong rise in Korea; rising in Russia and Brazil

                                                                                                    • China: US$20trn/0.1%
                                                                                                    • India: US$3.5trn/6.8%
                                                                                                    • Korea: US$1.8trn/3.5%
                                                                                                    • Russia: US$1.8trn/5.2%
                                                                                                    • Brazil: US$1.8trn/4.7%
                                                                                                    • China CPI was 0.1%, down 2.3ppts from one year ago; MoM it was up 0.4ppts
                                                                                                    • It has moved from a 5.7ppts discount to World CPI last year to the current 5ppt discount
                                                                                                    • India CPI was 6.8%, down 0.1ppts from one year ago; MoM it was down 0.6ppts
                                                                                                    • It has moved from a 1.1ppts discount to World CPI last year to the current 1.7ppt premium
                                                                                                    • Korea CPI was 3.5%, down 2.2ppts from one year ago; MoM it was up 1.2ppts
                                                                                                    • It has moved from a 2.4ppts discount to World CPI last year to the current 1.6ppt discount
                                                                                                    • Russia CPI was 5.2%, down 9.2ppts from one year ago; MoM it was up 0.9ppts
                                                                                                    • It has moved from a 6.3ppts premium to World CPI last year to the current 0.1ppt premium
                                                                                                    • Brazil CPI was 4.7%, down 4.1ppts from one year ago; MoM it was up 0.6ppts
                                                                                                    • It has moved from a 0.8ppts premium to World CPI last year to the current 0.4ppt discount
                                                                                                    
                                                                                                    

                                                                                                    Developed Countries

                                                                                                    Highest CPI

                                                                                                    • Sweden CPI was 7.6%, down 2.2ppts from one year ago; MoM it was down 1.8ppts
                                                                                                    • It has moved from a 1.7ppts premium to World CPI last year to the current 2.5ppt premium
                                                                                                    • Austria CPI was 7.5%, down 1.8ppts from one year ago; MoM it was up 0.4ppts
                                                                                                    • It has doubled its 1.2ppts premium to World CPI last year to the current 2.4ppt premium
                                                                                                    • UK CPI was 6.8%, down 3.2ppts from one year ago; MoM it was down 0.2ppts
                                                                                                    • It has moved from a 1.9ppts premium to World CPI last year to the current 1.7ppt premium
                                                                                                    • Ireland CPI was 6.4%, down 2.4ppts from one year ago; MoM it was up 0.5ppts
                                                                                                    • It has moved from a 0.7ppts premium to World CPI last year to the current 1.3ppt premium
                                                                                                    • Germany CPI was 6.2%, down 0.9ppts from one year ago; MoM it was flat
                                                                                                    • It has moved from a 0.9ppts discount to World CPI last year to the current 1.1ppt premium
                                                                                                    
                                                                                                    

                                                                                                    Emerging Countries

                                                                                                    Highest CPI

                                                                                                    • Argentina* CPI was 124.4%, up 45.9ppts from one year ago; MoM it was up 11ppts
                                                                                                    • It has moved from a 70.4ppts premium to World CPI last year to the current 119.3ppt premium
                                                                                                    • Turkey CPI was 60.9%, down 19.6ppts from one year ago; MoM it was up 11.3ppts
                                                                                                    • It has moved from a 72.4ppts premium to World CPI last year to the current 55.8ppt premium
                                                                                                    • Egypt CPI was 38.2%, up 23.3ppts from one year ago; MoM it was up 1ppts
                                                                                                    • It has moved from a 6.9ppts premium to World CPI last year to the current 33.2ppt premium
                                                                                                    • Pakistan* CPI was 28%, up 0.8ppts from one year ago; MoM it was down 0.9ppts
                                                                                                    • It has moved from a 19.1ppts premium to World CPI last year to the current 22.9ppt premium
                                                                                                    • Nigeria* CPI was 26.2%, up 5.6ppts from one year ago; MoM it was up 1.7ppts
                                                                                                    • It has moved from a 12.5ppts premium to World CPI last year to the current 21.1ppt premium
                                                                                                    
                                                                                                    

                                                                                                    *denotes Frontier market

                                                                                                    Developed Countries

                                                                                                    Lowest CPI

                                                                                                    • Switzerland CPI was 1.6%, down 1.8ppts from one year ago; MoM it was down 0.1ppts
                                                                                                    • It has moved from a 4.6ppts discount to World CPI last year to the current 3.5ppt discount
                                                                                                    • Hong Kong CPI was 1.8%, down 0.2ppts from one year ago; MoM it was down 0.1ppts
                                                                                                    • It has moved from a 6.1ppts discount to World CPI last year to the current 3.3ppt discount
                                                                                                    • Denmark CPI was 2.4%, down 6.5ppts from one year ago; MoM it was down 0.7ppts
                                                                                                    • It has moved from a 0.9ppts premium to World CPI last year to the current 2.6ppt discount
                                                                                                    • Spain CPI was 2.7%, down 7.8ppts from one year ago; MoM it was up 0.3ppts
                                                                                                    • It has moved from a 2.4ppts premium to World CPI last year to the current 2.4ppt discount
                                                                                                    • Netherlands CPI was 3%, down 9.1ppts from one year ago; MoM it was down 1.5ppts
                                                                                                    • It has moved from a 4ppts premium to World CPI last year to the current 2.1ppt discount
                                                                                                    
                                                                                                    

                                                                                                    Emerging Countries

                                                                                                    Lowest CPI

                                                                                                    • China CPI was 0.1%, down 2.3ppts from one year ago; MoM it was up 0.4ppts
                                                                                                    • It has moved from a 5.7ppts discount to World CPI last year to the current 5ppt discount
                                                                                                    • Jordan* CPI was 0.9%, down 4.5ppts from one year ago; MoM it was flat
                                                                                                    • It has moved from a 2.6ppts discount to World CPI last year to the current 4.2ppt discount
                                                                                                    • Thailand CPI was 0.9%, down 6.9ppts from one year ago; MoM it was up 0.5ppts
                                                                                                    • It has moved from a 0.2ppts discount to World CPI last year to the current 4.2ppt discount
                                                                                                    • Saudi Arabia CPI was 2%, down 0.9ppts from one year ago; MoM it was down 0.4ppts
                                                                                                    • It has moved from a 5.2ppts discount to World CPI last year to the current 3.1ppt discount
                                                                                                    • Malaysia CPI was 2.1%, down 2.5ppts from one year ago; MoM it was flat
                                                                                                    • It has moved from a 3.4ppt discount to World CPI last year to the current 3ppt discount
                                                                                                    
                                                                                                    

                                                                                                    *denotes Frontier market

                                                                                                    Developed Countries

                                                                                                    Largest rise/Least fall

                                                                                                    • Japan CPI was 3.1%, up 0.1ppts from one year ago; MoM it was down 0.1ppts
                                                                                                    • It has moved from a 5ppt discount to World CPI last year to the current 2ppt discount
                                                                                                    • Hong Kong CPI was 1.8%, down 0.2ppts from one year ago; MoM it was down 0.1ppts
                                                                                                    • It has moved from a 6.1ppt discount to World CPI last year to the current 3.3ppt discount
                                                                                                    • Israel CPI was 4.2%, down 0.4ppts from one year ago; MoM it was up 0.8ppts
                                                                                                    • It has moved from a 3.5ppt discount to World CPI last year to the current 0.9ppt discount
                                                                                                    • Australia CPI was 6.1%, down 0.8ppts from one year ago; MoM it was flat
                                                                                                    • It has moved from a 1.1ppt discount to World CPI last year to the current 1ppt premium
                                                                                                    • Germany CPI was 6.2%, down 0.9ppts from one year ago; MoM it was flat
                                                                                                    • It has moved from a 0.9ppt discount to World CPI last year to the current 1.1ppt premium
                                                                                                    
                                                                                                    

                                                                                                    Emerging Countries

                                                                                                    Largest rise/Least fall

                                                                                                    • Argentina* CPI was 124.4%, up 45.9ppts from one year ago; MoM it was up 11ppts
                                                                                                    • It has moved from a 70.4ppts premium to World CPI last year to the current 119.3ppt premium
                                                                                                    • Egypt CPI was 38.2%, up 23.3ppts from one year ago; MoM it was up 1ppts
                                                                                                    • It has moved from a 6.9ppts premium to World CPI last year to the current 33.2ppt premium
                                                                                                    • Nigeria* CPI was 26.2%, up 5.6ppts from one year ago; MoM it was up 1.7ppts
                                                                                                    • It has moved from a 12.5ppts premium to World CPI last year to the current 21.1ppt premium
                                                                                                    • Hungary CPI was 16.6%, up 1ppts from one year ago; MoM it was down 1.3ppts
                                                                                                    • It has moved from a 7.5ppts premium to World CPI last year to the current 11.5ppt premium
                                                                                                    • Pakistan* CPI was 28%, up 0.8ppts from one year ago; MoM it was down 0.9ppts
                                                                                                    • It has moved from a 19.1ppts premium to World CPI last year to the current 22.9ppt premium
                                                                                                    
                                                                                                    

                                                                                                    *denotes Frontier market

                                                                                                    Developed Countries

                                                                                                    Smallest rise/Biggest fall

                                                                                                    • Netherlands CPI was 3%, down 9.1ppts from one year ago; MoM it was down 1.5ppts
                                                                                                    • It has moved from a 4ppts premium to World CPI last year to the current 2.1ppt discount
                                                                                                    • Spain CPI was 2.7%, down 7.8ppts from one year ago; MoM it was up 0.3ppts
                                                                                                    • It has moved from a 2.4ppts premium to World CPI last year to the current 2.4ppt discount
                                                                                                    • Denmark CPI was 2.4%, down 6.5ppts from one year ago; MoM it was down 0.7ppts
                                                                                                    • It has moved from a 0.9ppts premium to World CPI last year to the current 2.6ppt discount
                                                                                                    • Belgium CPI was 4.1%, down 5.9ppts from one year ago; MoM it was flat
                                                                                                    • It has moved from a 1.9ppts premium to World CPI last year to the current 1ppt discount
                                                                                                    • Portugal CPI was 3.8%, down 5.2ppts from one year ago; MoM it was up 0.6ppts
                                                                                                    • It has moved from a 0.9ppts premium to World CPI last year to the current 1.3ppt discount
                                                                                                    
                                                                                                    

                                                                                                    Emerging Countries

                                                                                                    Smallest rise/Biggest fall

                                                                                                    • Sri Lanka* CPI was 4%, down 57.9ppts from one year ago; MoM it was down 2.3ppts
                                                                                                    • It has moved from a 53.8ppts premium to World CPI last year to the current 1.1ppt discount
                                                                                                    • Estonia* CPI was 4.8%, down 19.8ppts from one year ago; MoM it was down 1.8ppts
                                                                                                    • It has moved from a 16.6ppts premium to World CPI last year to the current 0.3ppt discount
                                                                                                    • Turkey CPI was 60.9%, down 19.6ppts from one year ago; MoM it was up 11.3ppts
                                                                                                    • It has moved from a 72.4ppts premium to World CPI last year to the current 55.8ppt premium
                                                                                                    • Lithuania* CPI was 6.3%, down 16ppts from one year ago; MoM it was down 1.3ppts
                                                                                                    • It has moved from a 14.2ppts premium to World CPI last year to the current 1.2ppt premium
                                                                                                    • Bulgaria* CPI was 7.8%, down 9.9ppts from one year ago; MoM it was down 0.8ppts
                                                                                                    • It has moved from a 9.6ppts premium to World CPI last year to the current 2.7ppt premium
                                                                                                    
                                                                                                    

                                                                                                    *denotes Frontier market

                                                                                                     

                                                                                                    Click here to get the PDF with all charts and graphs

                                                                                                     

                                                                                                    Andrew’s books

                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                    • My Worst Investment Ever
                                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s online programs

                                                                                                    • Valuation Master Class
                                                                                                    • The Become a Better Investor Community
                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                    • Finance Made Ridiculously Simple
                                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                    • Achieve Your Goals
                                                                                                    
                                                                                                    

                                                                                                    Connect with Andrew Stotz:

                                                                                                    • astotz.com
                                                                                                    • LinkedIn
                                                                                                    • Facebook
                                                                                                    • Instagram
                                                                                                    • Threads
                                                                                                    • Twitter
                                                                                                    • YouTube
                                                                                                    • My Worst Investment Ever Podcast
                                                                                                    
                                                                                                    ]]>8c57dcc2-86c6-43ca-805c-07d03f046f70Fri, 06 Oct 2023 06:00:00 +070020:05falsefullSwen Lorenz – Carefully Consider Liquidity in Your PortfolioBIO: Swen Lorenz is a passionate public equity investor and the face of Undervalued-Shares.com. With over 30 years of experience in investing, Swen has a knack for finding exciting investment opportunities in very unexpected places, which he discovers while traveling the globe.

                                                                                                    STORY: Swen had a 12.5% stake in a German fund manager performing well. A competitor wanted to buy up companies in that space and approached Swen to ask other shareholders if they would sell. The company didn’t like this, asked the regulator to look into Swen’s affairs, and accused him of all sorts of things. It ended with Swen narrowly losing a contentious proxy battle.

                                                                                                    LEARNING: Carefully consider the liquidity of the investments you’re holding. Going above the disclosure threshold as an investor is dangerous.

                                                                                                     

                                                                                                    “I’m a big proponent of investing into stuff that’s liquid and where you can get in and out quite easily, even under extreme circumstances.”

                                                                                                    Swen Lorenz

                                                                                                     

                                                                                                    Guest profile

                                                                                                    Swen Lorenz is a passionate public equity investor and the face of Undervalued-Shares.com. With over 30 years of experience in investing, Swen has a knack for finding exciting investment opportunities in very unexpected places, which he discovers while traveling the globe. His trademarks include extensive investigative reports, which give investors plenty of inspiration and ideas to work with.

                                                                                                    Worst investment ever

                                                                                                    Swen invested in a German wealth and fund manager. The company fitted his investment profile; it seemed appealing to his common sense and had huge potential. Swen felt that he was ahead of everyone.

                                                                                                    The company was listed in the late 1990s through a quiet listing. Swen liked that because there were virtually no headlines about this listing. The company came with excellent fundamentals, had superb dividend yield growth prospects, and growth rates from the past were excellent. So Swen was basically buying growth at value prices. The company’s market cap was just 50 million euros, but it set out to conquer the German market for independent fund managers and wealth managers and take away market share from the banks. That was the big idea. And that was something Swen believed in.

                                                                                                    In 2003, during the Dotcom crash, a major investor was forced to liquidate. Swen bought as many shares as possible and got a 10% stake in the company, eventually 12.5%. That meant that suddenly, he was on the public register. It also meant that he was highly visible. Swen had bought most of the stock at a pretty low price.

                                                                                                    The investment went great until a competitor wanted to buy up companies in that space. The competitor felt it was a great idea not to approach the CEO, the major shareholder, but to instead call Swen first. He asked him to do a survey as an independent entity and speak to shareholders to see if they were willing to sell.

                                                                                                    Little did Swen know what he would kick off by having that conversation with other shareholders. He informally approached the CEO and a variety of other large shareholders. The CEO Swen spoke to was not entirely straightforward. He said he wanted to sell, but that was not the case. The other stakeholders, however, wanted to sell. For most of them, it was just a matter of receiving the highest offer possible. But it all became complicated and contentious.

                                                                                                    The company eventually asked the regulator to look into Swen’s affairs and accused him of all sorts of things. It ended with Swen narrowly losing a contentious proxy battle. He spent half a million euros on lawyers. He was in the public and had the regulator looking into him. As a result, many personal things also happened, like losing friendships. Taking up the competitor’s request was a complete waste of Swen’s time and reputation.

                                                                                                    Lessons learned

                                                                                                    • Carefully consider the liquidity of the investments you’re holding.
                                                                                                    • Going above the disclosure threshold (3%) as an investor is dangerous because it influences your thinking, and your ego gets involved.
                                                                                                    • Carefully consider whether you want to be involved in activism because it’s complicated, time-consuming, and expensive.
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s takeaways

                                                                                                    • Learn to spot narcissists and psychopaths, and educate yourself about that.
                                                                                                    • Be very careful about the size of your liquidity, and expect that you will get a huge upside for taking on that liquidity risk.
                                                                                                    • You must be able to outlast an irrational market when it’s not behaving as you think it should be.
                                                                                                    
                                                                                                    

                                                                                                    Swen’s recommendations

                                                                                                    Swen recommends checking out The Activist Investor (TAI), a news aggregation website. Join the email list, and you’ll occasionally receive emails with the most recent articles about activist investing. You’ll also get academic research and quirky articles from niche publications that you wouldn’t usually come across—all for free.

                                                                                                    Swen also publishes a free weekly newsletter, Weekly Dispatches. It helps its readers shape their worldview, teaches new investment strategies, and gives new ideas that can be researched further.

                                                                                                    No.1 goal for the next 12 months

                                                                                                    Swen’s number one goal for the next 12 months is to become a better writer and write more for his website while having fun.

                                                                                                    Parting words

                                                                                                     

                                                                                                    “Keep listening to podcasts like this one because, as an investor, you never stop learning, and you have to learn from others.”

                                                                                                    Swen Lorenz

                                                                                                     

                                                                                                    [spp-transcript]

                                                                                                     

                                                                                                    Connect with Swen Lorenz

                                                                                                    • LinkedIn
                                                                                                    • Twitter
                                                                                                    • Website
                                                                                                    • Books
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s books

                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                    • My Worst Investment Ever
                                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s online programs

                                                                                                    • Valuation Master Class
                                                                                                    • The Become a Better Investor Community
                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                    • Finance Made Ridiculously Simple
                                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                    • Achieve Your Goals
                                                                                                    
                                                                                                    

                                                                                                    Connect with Andrew Stotz:

                                                                                                    • astotz.com
                                                                                                    • LinkedIn
                                                                                                    • Facebook
                                                                                                    • Instagram
                                                                                                    • Threads
                                                                                                    • Twitter
                                                                                                    • YouTube
                                                                                                    • My Worst Investment Ever Podcast
                                                                                                    
                                                                                                    ]]>BIO: Swen Lorenz is a passionate public equity investor and the face of Undervalued-Shares.com. With over 30 years of experience in investing, Swen has a knack for finding exciting investment opportunities in very unexpected places, which he discovers while traveling the globe.

                                                                                                    STORY: Swen had a 12.5% stake in a German fund manager performing well. A competitor wanted to buy up companies in that space and approached Swen to ask other shareholders if they would sell. The company didn’t like this, asked the regulator to look into Swen’s affairs, and accused him of all sorts of things. It ended with Swen narrowly losing a contentious proxy battle.

                                                                                                    LEARNING: Carefully consider the liquidity of the investments you’re holding. Going above the disclosure threshold as an investor is dangerous.

                                                                                                     

                                                                                                    “I’m a big proponent of investing into stuff that’s liquid and where you can get in and out quite easily, even under extreme circumstances.”

                                                                                                    Swen Lorenz

                                                                                                     

                                                                                                    Guest profile

                                                                                                    Swen Lorenz is a passionate public equity investor and the face of Undervalued-Shares.com. With over 30 years of experience in investing, Swen has a knack for finding exciting investment opportunities in very unexpected places, which he discovers while traveling the globe. His trademarks include extensive investigative reports, which give investors plenty of inspiration and ideas to work with.

                                                                                                    Worst investment ever

                                                                                                    Swen invested in a German wealth and fund manager. The company fitted his investment profile; it seemed appealing to his common sense and had huge potential. Swen felt that he was ahead of everyone.

                                                                                                    The company was listed in the late 1990s through a quiet listing. Swen liked that because there were virtually no headlines about this listing. The company came with excellent fundamentals, had superb dividend yield growth prospects, and growth rates from the past were excellent. So Swen was basically buying growth at value prices. The company’s market cap was just 50 million euros, but it set out to conquer the German market for independent fund managers and wealth managers and take away market share from the banks. That was the big idea. And that was something Swen believed in.

                                                                                                    In 2003, during the Dotcom crash, a major investor was forced to liquidate. Swen bought as many shares as possible and got a 10% stake in the company, eventually 12.5%. That meant that suddenly, he was on the public register. It also meant that he was highly visible. Swen had bought most of the stock at a pretty low price.

                                                                                                    The investment went great until a competitor wanted to buy up companies in that space. The competitor felt it was a great idea not to approach the CEO, the major shareholder, but to instead call Swen first. He asked him to do a survey as an independent entity and speak to shareholders to see if they were willing to sell.

                                                                                                    Little did Swen know what he would kick off by having that conversation with other shareholders. He informally approached the CEO and a variety of other large shareholders. The CEO Swen spoke to was not entirely straightforward. He said he wanted to sell, but that was not the case. The other stakeholders, however, wanted to sell. For most of them, it was just a matter of receiving the highest offer possible. But it all became complicated and contentious.

                                                                                                    The company eventually asked the regulator to look into Swen’s affairs and accused him of all sorts of things. It ended with Swen narrowly losing a contentious proxy battle. He spent half a million euros on lawyers. He was in the public and had the regulator looking into him. As a result, many personal things also happened, like losing friendships. Taking up the competitor’s request was a complete waste of Swen’s time and reputation.

                                                                                                    Lessons learned

                                                                                                    • Carefully consider the liquidity of the investments you’re holding.
                                                                                                    • Going above the disclosure threshold (3%) as an investor is dangerous because it influences your thinking, and your ego gets involved.
                                                                                                    • Carefully consider whether you want to be involved in activism because it’s complicated, time-consuming, and expensive.
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s takeaways

                                                                                                    • Learn to spot narcissists and psychopaths, and educate yourself about that.
                                                                                                    • Be very careful about the size of your liquidity, and expect that you will get a huge upside for taking on that liquidity risk.
                                                                                                    • You must be able to outlast an irrational market when it’s not behaving as you think it should be.
                                                                                                    
                                                                                                    

                                                                                                    Swen’s recommendations

                                                                                                    Swen recommends checking out The Activist Investor (TAI), a news aggregation website. Join the email list, and you’ll occasionally receive emails with the most recent articles about activist investing. You’ll also get academic research and quirky articles from niche publications that you wouldn’t usually come across—all for free.

                                                                                                    Swen also publishes a free weekly newsletter, Weekly Dispatches. It helps its readers shape their worldview, teaches new investment strategies, and gives new ideas that can be researched further.

                                                                                                    No.1 goal for the next 12 months

                                                                                                    Swen’s number one goal for the next 12 months is to become a better writer and write more for his website while having fun.

                                                                                                    Parting words

                                                                                                     

                                                                                                    “Keep listening to podcasts like this one because, as an investor, you never stop learning, and you have to learn from others.”

                                                                                                    Swen Lorenz

                                                                                                     

                                                                                                    [spp-transcript]

                                                                                                     

                                                                                                    Connect with Swen Lorenz

                                                                                                    • LinkedIn
                                                                                                    • Twitter
                                                                                                    • Website
                                                                                                    • Books
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s books

                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                    • My Worst Investment Ever
                                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s online programs

                                                                                                    • Valuation Master Class
                                                                                                    • The Become a Better Investor Community
                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                    • Finance Made Ridiculously Simple
                                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                    • Achieve Your Goals
                                                                                                    
                                                                                                    

                                                                                                    Connect with Andrew Stotz:

                                                                                                    • astotz.com
                                                                                                    • LinkedIn
                                                                                                    • Facebook
                                                                                                    • Instagram
                                                                                                    • Threads
                                                                                                    • Twitter
                                                                                                    • YouTube
                                                                                                    • My Worst Investment Ever Podcast
                                                                                                    
                                                                                                    ]]>f66f2cb6-96f8-4ea9-8530-946b5d565883Thu, 05 Oct 2023 06:00:00 +070039:31falsefullPaul Merriman – What You Do When You Are Young, Is GoldenBIO: Paul Merriman is a nationally recognized authority on mutual funds, index investing, and asset allocation. After retiring in 2012 from Merriman Wealth Management, which he founded in 1983, Paul created The Merriman Financial Education Foundation, dedicated to providing investors of all ages with free information and tools to make better investment decisions.

                                                                                                    STORY: Paul has had a series of bad investments, and they were all driven by emotions. It wasn’t until Paul got the emotion out of that process that his money started to grow.

                                                                                                    LEARNING: The first five years of the money you put away can, theoretically, represent 40% of the value of your portfolio over the long term. Start investing early so that you can benefit from the compounding effect.

                                                                                                     

                                                                                                    “It was not until I got the emotion out of the investing process that I started to get the money to truly grow. And to realize that the greatest success in this process is time.”

                                                                                                    Paul Merriman

                                                                                                     

                                                                                                    Guest profile

                                                                                                    Paul Merriman is a nationally recognized authority on mutual funds, index investing, and asset allocation.

                                                                                                    After retiring in 2012 from Merriman Wealth Management, which he founded in 1983, Paul created The Merriman Financial Education Foundation, dedicated to providing investors of all ages with free information and tools to make better investment decisions.

                                                                                                    Paul is the author of eight books, including We’re Talking Millions! 12 Simple Ways to Supercharge Your Retirement.

                                                                                                    At his website, he provides over 700 articles, podcasts, and videos, plus recommended mutual fund and Best-In-Class ETF portfolios at Vanguard, Fidelity, and Schwab.

                                                                                                    Worst investment ever

                                                                                                    Paul has had several bad investments, and they all look alike. Some of these mistakes were in the commodities market, others were loaning money to friends, and some were investing in early small companies. Other mistakes involved trying to trade the market and make quick money. Though different, all these mistakes had one thing in common: they were driven by emotions. It wasn’t until Paul got emotions out of that process that his money started to grow.

                                                                                                    Lessons learned

                                                                                                    • The first five years of the money you put away can, theoretically, represent 40% of the value of your portfolio over the long term.
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s takeaways

                                                                                                    • If you don’t get it right at a young age, your time will run out and you won’t get the value of compounding.
                                                                                                    
                                                                                                    

                                                                                                    Paul’s recommendations

                                                                                                    Paul recommends reading his free book We’re Talking Millions! 12 Simple Ways to Supercharge Your Retirement. He also recommends checking out BootCamp for Investors on his website, where you’ll find eight topics that will teach you the essential things you need to know, including how much you need in bonds, what equity asset classes you should have, how to take money out of your investments at retirement, and more.

                                                                                                    No.1 goal for the next 12 months

                                                                                                    Paul’s number one goal for the next 12 months is to get his new program at Western Washington University up and running.

                                                                                                    Parting words

                                                                                                     

                                                                                                    “The payoff for getting a good education is the biggest return you’re ever going to get. So find yourself some good teachers.”

                                                                                                    Paul Merriman

                                                                                                     

                                                                                                    [spp-transcript]

                                                                                                     

                                                                                                    Connect with Paul Merriman

                                                                                                    • LinkedIn
                                                                                                    • Facebook
                                                                                                    • Twitter
                                                                                                    • YouTube
                                                                                                    • Website
                                                                                                    • Podcast
                                                                                                    • Books
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s books

                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                    • My Worst Investment Ever
                                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s online programs

                                                                                                    • Valuation Master Class
                                                                                                    • The Become a Better Investor Community
                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                    • Finance Made Ridiculously Simple
                                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                    • Achieve Your Goals
                                                                                                    
                                                                                                    

                                                                                                    Connect with Andrew Stotz:

                                                                                                    • astotz.com
                                                                                                    • LinkedIn
                                                                                                    • Facebook
                                                                                                    • Instagram
                                                                                                    • Threads
                                                                                                    • Twitter
                                                                                                    • YouTube
                                                                                                    • My Worst Investment Ever Podcast
                                                                                                    
                                                                                                    ]]>BIO: Paul Merriman is a nationally recognized authority on mutual funds, index investing, and asset allocation. After retiring in 2012 from Merriman Wealth Management, which he founded in 1983, Paul created The Merriman Financial Education Foundation, dedicated to providing investors of all ages with free information and tools to make better investment decisions.

                                                                                                    STORY: Paul has had a series of bad investments, and they were all driven by emotions. It wasn’t until Paul got the emotion out of that process that his money started to grow.

                                                                                                    LEARNING: The first five years of the money you put away can, theoretically, represent 40% of the value of your portfolio over the long term. Start investing early so that you can benefit from the compounding effect.

                                                                                                     

                                                                                                    “It was not until I got the emotion out of the investing process that I started to get the money to truly grow. And to realize that the greatest success in this process is time.”

                                                                                                    Paul Merriman

                                                                                                     

                                                                                                    Guest profile

                                                                                                    Paul Merriman is a nationally recognized authority on mutual funds, index investing, and asset allocation.

                                                                                                    After retiring in 2012 from Merriman Wealth Management, which he founded in 1983, Paul created The Merriman Financial Education Foundation, dedicated to providing investors of all ages with free information and tools to make better investment decisions.

                                                                                                    Paul is the author of eight books, including We’re Talking Millions! 12 Simple Ways to Supercharge Your Retirement.

                                                                                                    At his website, he provides over 700 articles, podcasts, and videos, plus recommended mutual fund and Best-In-Class ETF portfolios at Vanguard, Fidelity, and Schwab.

                                                                                                    Worst investment ever

                                                                                                    Paul has had several bad investments, and they all look alike. Some of these mistakes were in the commodities market, others were loaning money to friends, and some were investing in early small companies. Other mistakes involved trying to trade the market and make quick money. Though different, all these mistakes had one thing in common: they were driven by emotions. It wasn’t until Paul got emotions out of that process that his money started to grow.

                                                                                                    Lessons learned

                                                                                                    • The first five years of the money you put away can, theoretically, represent 40% of the value of your portfolio over the long term.
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s takeaways

                                                                                                    • If you don’t get it right at a young age, your time will run out and you won’t get the value of compounding.
                                                                                                    
                                                                                                    

                                                                                                    Paul’s recommendations

                                                                                                    Paul recommends reading his free book We’re Talking Millions! 12 Simple Ways to Supercharge Your Retirement. He also recommends checking out BootCamp for Investors on his website, where you’ll find eight topics that will teach you the essential things you need to know, including how much you need in bonds, what equity asset classes you should have, how to take money out of your investments at retirement, and more.

                                                                                                    No.1 goal for the next 12 months

                                                                                                    Paul’s number one goal for the next 12 months is to get his new program at Western Washington University up and running.

                                                                                                    Parting words

                                                                                                     

                                                                                                    “The payoff for getting a good education is the biggest return you’re ever going to get. So find yourself some good teachers.”

                                                                                                    Paul Merriman

                                                                                                     

                                                                                                    [spp-transcript]

                                                                                                     

                                                                                                    Connect with Paul Merriman

                                                                                                    • LinkedIn
                                                                                                    • Facebook
                                                                                                    • Twitter
                                                                                                    • YouTube
                                                                                                    • Website
                                                                                                    • Podcast
                                                                                                    • Books
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s books

                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                    • My Worst Investment Ever
                                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s online programs

                                                                                                    • Valuation Master Class
                                                                                                    • The Become a Better Investor Community
                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                    • Finance Made Ridiculously Simple
                                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                    • Achieve Your Goals
                                                                                                    
                                                                                                    

                                                                                                    Connect with Andrew Stotz:

                                                                                                    • astotz.com
                                                                                                    • LinkedIn
                                                                                                    • Facebook
                                                                                                    • Instagram
                                                                                                    • Threads
                                                                                                    • Twitter
                                                                                                    • YouTube
                                                                                                    • My Worst Investment Ever Podcast
                                                                                                    
                                                                                                    ]]>b7394c62-0205-401a-88a7-6df2e9879a0eWed, 04 Oct 2023 06:00:00 +070041:12falsefullVikram Mansharamani – Liquidity Will Not Always Be ThereBIO: Dr. Vikram Mansharamani is a global trend-watcher who shows people how to anticipate the future, manage risk, and spot opportunities.

                                                                                                    STORY: Vikram invested in a small commercial condo that he hoped to rent to Ph.D. students, but they weren’t interested. He had to sell it after a few years of no income. He took a 50% loss.

                                                                                                    LEARNING: Liquidity is not a constant. If the timing of your thesis is off, then you’re wrong. The market can stay irrational longer than you can remain liquid.

                                                                                                     

                                                                                                    “As long as you have liquidity available, or the option to redeploy or invest more, then you’re going to be fine because, over time, investments work out. It’s just getting caught at the wrong time and the wrong illiquid investment that could really hurt you.”

                                                                                                    Vikram Mansharamani

                                                                                                     

                                                                                                    Guest profile

                                                                                                    Dr Vikram Mansharamani is a global trend-watcher who shows people how to anticipate the future, manage risk, and spot opportunities. He is the author of THINK FOR YOURSELF: Restoring Common Sense in an Age of Experts and Artificial Intelligence and BOOMBUSTOLOGY: Spotting Financial Bubbles Before They Burst.

                                                                                                    He is a frequent commentator on issues driving disruption in the global business environment.

                                                                                                    Vikram’s ideas and writings have also appeared in Bloomberg, Fortune, Forbes, The New York Times, and many other publications.

                                                                                                    LinkedIn twice listed him as their #1 Top Voice for Money, Finance and Global Economics and Worth and profiled him as one of the 100 most powerful people in global finance.

                                                                                                    Millions of readers have enjoyed his unique multi-lens approach to connecting seemingly irrelevant dots.

                                                                                                    Worst investment ever

                                                                                                    In 2008, Vikram invested in a small commercial condo in Southern Maine. He had done a lot of analysis on the investment, and his thesis was that this was an increasingly valuable asset.

                                                                                                    At the time, Vikram was working on his Ph.D. and figured he would rent the space to other students. He was sure demand would be excessive. Unfortunately, things didn’t go as Vikram had planned. Vikram was stuck with an illiquid asset that brought no income. Yet, he was paying condo fees and other recurring expenses. Vikram lost faith in the condo and sold it in 2015 at a 50% loss. What was worse than the loss is that the property is now worth about 5x what he paid. So, Vikram’s thesis was correct. If only he’d believed and stuck with it.

                                                                                                    Lessons learned

                                                                                                    • Liquidity is not a constant. Something that you think is liquid may become highly illiquid at certain points in time.
                                                                                                    • You won’t always have the duration for holding you think you do, so have enough flexibility.
                                                                                                    • If the timing of your thesis is off, then you’re wrong.
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s takeaways

                                                                                                    • The market can stay irrational longer than you can remain liquid.
                                                                                                    • An asset’s liquidity and your need for liquidity change over time.
                                                                                                    • First, you must have a thesis, then invest in that thesis, and stay in that thesis, and most importantly, the thesis needs to be right for you to be successful.
                                                                                                    • Be careful when investing in illiquid assets, such as property, because you can’t get out of it that easily.
                                                                                                    
                                                                                                    

                                                                                                    Actionable advice

                                                                                                    Maintain optionality when you’re younger. You may think you have the greatest investment, and it’s illiquid, but you get stuck in it. And if things go down, you lose the option value of buying something else at a lower price.

                                                                                                    Vikram’s recommendations

                                                                                                    If you want to get up to speed on Vikram’s current views and the complete archive of all his writings, check out his substack.

                                                                                                    No.1 goal for the next 12 months

                                                                                                    Vikram’s number one goal for the next 12 months is to write another book, particularly about the lessons of being a generalist in a land of specialists.

                                                                                                    Parting words

                                                                                                     

                                                                                                    “At the end of the day, the world is filled with specialists, and there could be a lot of value in being a generalist. So look broad, as much as you take the time to look deep.”

                                                                                                    Vikram Mansharamani

                                                                                                     

                                                                                                    [spp-transcript]

                                                                                                     

                                                                                                    Connect with Vikram Mansharamani

                                                                                                    • LinkedIn
                                                                                                    • Twitter
                                                                                                    • Website
                                                                                                    • Books
                                                                                                    • Substack
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s books

                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                    • My Worst Investment Ever
                                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s online programs

                                                                                                    • Valuation Master Class
                                                                                                    • The Become a Better Investor Community
                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                    • Finance Made Ridiculously Simple
                                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                    • Achieve Your Goals
                                                                                                    
                                                                                                    

                                                                                                    Connect with Andrew Stotz:

                                                                                                    • astotz.com
                                                                                                    • LinkedIn
                                                                                                    • Facebook
                                                                                                    • Instagram
                                                                                                    • Threads
                                                                                                    • Twitter
                                                                                                    • YouTube
                                                                                                    • My Worst Investment Ever Podcast
                                                                                                    
                                                                                                    ]]>BIO: Dr. Vikram Mansharamani is a global trend-watcher who shows people how to anticipate the future, manage risk, and spot opportunities.

                                                                                                    STORY: Vikram invested in a small commercial condo that he hoped to rent to Ph.D. students, but they weren’t interested. He had to sell it after a few years of no income. He took a 50% loss.

                                                                                                    LEARNING: Liquidity is not a constant. If the timing of your thesis is off, then you’re wrong. The market can stay irrational longer than you can remain liquid.

                                                                                                     

                                                                                                    “As long as you have liquidity available, or the option to redeploy or invest more, then you’re going to be fine because, over time, investments work out. It’s just getting caught at the wrong time and the wrong illiquid investment that could really hurt you.”

                                                                                                    Vikram Mansharamani

                                                                                                     

                                                                                                    Guest profile

                                                                                                    Dr Vikram Mansharamani is a global trend-watcher who shows people how to anticipate the future, manage risk, and spot opportunities. He is the author of THINK FOR YOURSELF: Restoring Common Sense in an Age of Experts and Artificial Intelligence and BOOMBUSTOLOGY: Spotting Financial Bubbles Before They Burst.

                                                                                                    He is a frequent commentator on issues driving disruption in the global business environment.

                                                                                                    Vikram’s ideas and writings have also appeared in Bloomberg, Fortune, Forbes, The New York Times, and many other publications.

                                                                                                    LinkedIn twice listed him as their #1 Top Voice for Money, Finance and Global Economics and Worth and profiled him as one of the 100 most powerful people in global finance.

                                                                                                    Millions of readers have enjoyed his unique multi-lens approach to connecting seemingly irrelevant dots.

                                                                                                    Worst investment ever

                                                                                                    In 2008, Vikram invested in a small commercial condo in Southern Maine. He had done a lot of analysis on the investment, and his thesis was that this was an increasingly valuable asset.

                                                                                                    At the time, Vikram was working on his Ph.D. and figured he would rent the space to other students. He was sure demand would be excessive. Unfortunately, things didn’t go as Vikram had planned. Vikram was stuck with an illiquid asset that brought no income. Yet, he was paying condo fees and other recurring expenses. Vikram lost faith in the condo and sold it in 2015 at a 50% loss. What was worse than the loss is that the property is now worth about 5x what he paid. So, Vikram’s thesis was correct. If only he’d believed and stuck with it.

                                                                                                    Lessons learned

                                                                                                    • Liquidity is not a constant. Something that you think is liquid may become highly illiquid at certain points in time.
                                                                                                    • You won’t always have the duration for holding you think you do, so have enough flexibility.
                                                                                                    • If the timing of your thesis is off, then you’re wrong.
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s takeaways

                                                                                                    • The market can stay irrational longer than you can remain liquid.
                                                                                                    • An asset’s liquidity and your need for liquidity change over time.
                                                                                                    • First, you must have a thesis, then invest in that thesis, and stay in that thesis, and most importantly, the thesis needs to be right for you to be successful.
                                                                                                    • Be careful when investing in illiquid assets, such as property, because you can’t get out of it that easily.
                                                                                                    
                                                                                                    

                                                                                                    Actionable advice

                                                                                                    Maintain optionality when you’re younger. You may think you have the greatest investment, and it’s illiquid, but you get stuck in it. And if things go down, you lose the option value of buying something else at a lower price.

                                                                                                    Vikram’s recommendations

                                                                                                    If you want to get up to speed on Vikram’s current views and the complete archive of all his writings, check out his substack.

                                                                                                    No.1 goal for the next 12 months

                                                                                                    Vikram’s number one goal for the next 12 months is to write another book, particularly about the lessons of being a generalist in a land of specialists.

                                                                                                    Parting words

                                                                                                     

                                                                                                    “At the end of the day, the world is filled with specialists, and there could be a lot of value in being a generalist. So look broad, as much as you take the time to look deep.”

                                                                                                    Vikram Mansharamani

                                                                                                     

                                                                                                    [spp-transcript]

                                                                                                     

                                                                                                    Connect with Vikram Mansharamani

                                                                                                    • LinkedIn
                                                                                                    • Twitter
                                                                                                    • Website
                                                                                                    • Books
                                                                                                    • Substack
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s books

                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                    • My Worst Investment Ever
                                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s online programs

                                                                                                    • Valuation Master Class
                                                                                                    • The Become a Better Investor Community
                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                    • Finance Made Ridiculously Simple
                                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                    • Achieve Your Goals
                                                                                                    
                                                                                                    

                                                                                                    Connect with Andrew Stotz:

                                                                                                    • astotz.com
                                                                                                    • LinkedIn
                                                                                                    • Facebook
                                                                                                    • Instagram
                                                                                                    • Threads
                                                                                                    • Twitter
                                                                                                    • YouTube
                                                                                                    • My Worst Investment Ever Podcast
                                                                                                    
                                                                                                    ]]>e196a6d0-1b58-48aa-a7f2-0e5714434bc6Mon, 02 Oct 2023 06:00:00 +070043:40falsefullGino Barbaro – Buy Right, Finance Right and Manage RightBIO: Gino Barbaro is the co-founder of Jake & Gino. He is an investor, business owner, author and entrepreneur. As an entrepreneur, he has grown his real estate portfolio to over 2,120 multifamily units & $280,000,000 in assets under management.

                                                                                                    STORY: Gino invested and lost $172,000 in mobile home parks that he didn’t even know what they looked like or where they were.

                                                                                                    LEARNING: Know your values before you form a business partnership with anyone. Do due diligence to understand what you’re investing in.

                                                                                                     

                                                                                                    “A person with money needs a person with experience. The person with the experience gets the money. The person with the money gets the experience.”

                                                                                                    Gino Barbaro

                                                                                                     

                                                                                                    Guest profile

                                                                                                    Gino Barbaro is the co-founder of Jake & Gino. He is an investor, business owner, author and entrepreneur. As an entrepreneur, he has grown his real estate portfolio to over 2,120 multifamily units & $280,000,000 in assets under management.

                                                                                                    Gino and his partner, Jake, are teaching others how to do the same through Jake &​ Gino, the premier multifamily real estate education community. Their students have closed over 71,000 units and have $4 Billion in deal volume!

                                                                                                    Gino is the best-selling author of three books, “Wheelbarrow Profits,” “The Honey Bee,” and “Family, Food and the Friars.” He currently resides in St. Augustine, Florida, with his beautiful wife Julia and their six children.

                                                                                                    Worst investment ever

                                                                                                    In 2005, Gino had $172,000 sitting in the bank. His friend and accountant told him of an investment from a gentleman he’d been investing with for years. The gentleman was doing mobile home parks.

                                                                                                    Though Gino knew nothing about mobile home parks, he was interested in the investment. He met the gentleman, who came driving a gold Maserati. He pitched him this syndicated deal. The parks were in Florida, but Gino never went to see them. He believed the gentleman’s word.

                                                                                                    The first six months were great, and Gino was getting distribution checks. Six months later, the checks stopped. Gino and his accountant decided to find out what was happening. They searched the parks online, and what they saw was awful. The parks were in the middle of nowhere. No one would want to buy them.

                                                                                                    Lessons learned

                                                                                                    • Buy right, manage right, and finance right.
                                                                                                    • Know your values before you form a business partnership with anyone.
                                                                                                    • Do due diligence to understand what you’re investing in. If you don’t know how to do it, hire an attorney or find a company to help you.
                                                                                                    • Learn each process before you invest in it.
                                                                                                    • Learn how to underwrite an asset to see if the numbers make sense.
                                                                                                    • Decide your investment goals and what you are trying to accomplish with each investment because it’s not always about chasing the highest yield. Ask yourself if each investment aligns with your goals,
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s takeaways

                                                                                                    • Never invest with somebody who approaches you with an investment. Do your own research.
                                                                                                    • Illiquid types of investments require much more due diligence than liquid ones.
                                                                                                    
                                                                                                    

                                                                                                    Actionable advice

                                                                                                    Get on the plane and fly down to the property. Take some pictures, then make your decision whether to invest or not.

                                                                                                    Gino’s recommendations

                                                                                                    Gino recommends listening to podcasts on his website to listen to interviews of thought leaders, people who think outside the box, and entrepreneurs. The website also has a ton of other valuable resources.

                                                                                                    No.1 goal for the next 12 months

                                                                                                    Gino’s number one goal for the next 12 months is to close another 300 real estate deals. He also hopes to continue to scale the education company and bring more students on.

                                                                                                    Parting words

                                                                                                     

                                                                                                    “Continue to listen to this podcast because you’re going to hear a lot more horror stories in the weeks, months, and years to follow. It’s only beginning.”

                                                                                                    Gino Barbaro

                                                                                                     

                                                                                                    [spp-transcript]

                                                                                                     

                                                                                                    Connect with Gino Barbaro

                                                                                                    • LinkedIn
                                                                                                    • Twitter
                                                                                                    • Facebook
                                                                                                    • Instagram
                                                                                                    • Website
                                                                                                    • Books
                                                                                                    • Podcast
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s books

                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                    • My Worst Investment Ever
                                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s online programs

                                                                                                    • Valuation Master Class
                                                                                                    • The Become a Better Investor Community
                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                    • Finance Made Ridiculously Simple
                                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                    • Achieve Your Goals
                                                                                                    
                                                                                                    

                                                                                                    Connect with Andrew Stotz:

                                                                                                    • astotz.com
                                                                                                    • LinkedIn
                                                                                                    • Facebook
                                                                                                    • Instagram
                                                                                                    • Threads
                                                                                                    • Twitter
                                                                                                    • YouTube
                                                                                                    • My Worst Investment Ever Podcast
                                                                                                    
                                                                                                    

                                                                                                    Further reading mentioned

                                                                                                    • Morgan Housel, The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness
                                                                                                    • Vicki Robin, Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence
                                                                                                    
                                                                                                    ]]>BIO: Gino Barbaro is the co-founder of Jake & Gino. He is an investor, business owner, author and entrepreneur. As an entrepreneur, he has grown his real estate portfolio to over 2,120 multifamily units & $280,000,000 in assets under management.

                                                                                                    STORY: Gino invested and lost $172,000 in mobile home parks that he didn’t even know what they looked like or where they were.

                                                                                                    LEARNING: Know your values before you form a business partnership with anyone. Do due diligence to understand what you’re investing in.

                                                                                                     

                                                                                                    “A person with money needs a person with experience. The person with the experience gets the money. The person with the money gets the experience.”

                                                                                                    Gino Barbaro

                                                                                                     

                                                                                                    Guest profile

                                                                                                    Gino Barbaro is the co-founder of Jake & Gino. He is an investor, business owner, author and entrepreneur. As an entrepreneur, he has grown his real estate portfolio to over 2,120 multifamily units & $280,000,000 in assets under management.

                                                                                                    Gino and his partner, Jake, are teaching others how to do the same through Jake &​ Gino, the premier multifamily real estate education community. Their students have closed over 71,000 units and have $4 Billion in deal volume!

                                                                                                    Gino is the best-selling author of three books, “Wheelbarrow Profits,” “The Honey Bee,” and “Family, Food and the Friars.” He currently resides in St. Augustine, Florida, with his beautiful wife Julia and their six children.

                                                                                                    Worst investment ever

                                                                                                    In 2005, Gino had $172,000 sitting in the bank. His friend and accountant told him of an investment from a gentleman he’d been investing with for years. The gentleman was doing mobile home parks.

                                                                                                    Though Gino knew nothing about mobile home parks, he was interested in the investment. He met the gentleman, who came driving a gold Maserati. He pitched him this syndicated deal. The parks were in Florida, but Gino never went to see them. He believed the gentleman’s word.

                                                                                                    The first six months were great, and Gino was getting distribution checks. Six months later, the checks stopped. Gino and his accountant decided to find out what was happening. They searched the parks online, and what they saw was awful. The parks were in the middle of nowhere. No one would want to buy them.

                                                                                                    Lessons learned

                                                                                                    • Buy right, manage right, and finance right.
                                                                                                    • Know your values before you form a business partnership with anyone.
                                                                                                    • Do due diligence to understand what you’re investing in. If you don’t know how to do it, hire an attorney or find a company to help you.
                                                                                                    • Learn each process before you invest in it.
                                                                                                    • Learn how to underwrite an asset to see if the numbers make sense.
                                                                                                    • Decide your investment goals and what you are trying to accomplish with each investment because it’s not always about chasing the highest yield. Ask yourself if each investment aligns with your goals,
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s takeaways

                                                                                                    • Never invest with somebody who approaches you with an investment. Do your own research.
                                                                                                    • Illiquid types of investments require much more due diligence than liquid ones.
                                                                                                    
                                                                                                    

                                                                                                    Actionable advice

                                                                                                    Get on the plane and fly down to the property. Take some pictures, then make your decision whether to invest or not.

                                                                                                    Gino’s recommendations

                                                                                                    Gino recommends listening to podcasts on his website to listen to interviews of thought leaders, people who think outside the box, and entrepreneurs. The website also has a ton of other valuable resources.

                                                                                                    No.1 goal for the next 12 months

                                                                                                    Gino’s number one goal for the next 12 months is to close another 300 real estate deals. He also hopes to continue to scale the education company and bring more students on.

                                                                                                    Parting words

                                                                                                     

                                                                                                    “Continue to listen to this podcast because you’re going to hear a lot more horror stories in the weeks, months, and years to follow. It’s only beginning.”

                                                                                                    Gino Barbaro

                                                                                                     

                                                                                                    [spp-transcript]

                                                                                                     

                                                                                                    Connect with Gino Barbaro

                                                                                                    • LinkedIn
                                                                                                    • Twitter
                                                                                                    • Facebook
                                                                                                    • Instagram
                                                                                                    • Website
                                                                                                    • Books
                                                                                                    • Podcast
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s books

                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                    • My Worst Investment Ever
                                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s online programs

                                                                                                    • Valuation Master Class
                                                                                                    • The Become a Better Investor Community
                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                    • Finance Made Ridiculously Simple
                                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                    • Achieve Your Goals
                                                                                                    
                                                                                                    

                                                                                                    Connect with Andrew Stotz:

                                                                                                    • astotz.com
                                                                                                    • LinkedIn
                                                                                                    • Facebook
                                                                                                    • Instagram
                                                                                                    • Threads
                                                                                                    • Twitter
                                                                                                    • YouTube
                                                                                                    • My Worst Investment Ever Podcast
                                                                                                    
                                                                                                    

                                                                                                    Further reading mentioned

                                                                                                    • Morgan Housel, The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness
                                                                                                    • Vicki Robin, Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence
                                                                                                    
                                                                                                    ]]>3a3d9487-d028-4470-81b0-5564981d9202Thu, 28 Sep 2023 06:00:00 +070035:28falsefullRobin Wigglesworth – You Can’t Outsmart the MarketsBIO: Robin Wigglesworth is the editor of Alphaville, the FT’s financial blog. From Oslo, Norway, he leads a team of writers who dig into anything deeply nerdy or plain delightful that they spot in markets, business, or the global economy.

                                                                                                    STORY: Robin invested in an ETF in Norway, a consumer durables company, and a fertilizer company after the 2008 financial crisis. These companies did incredibly well. Unfortunately, Robin reacted to short-term headlines when the European crisis started erupting and sold out.

                                                                                                    LEARNING: You can’t outsmart the markets. Always let your winners ride.

                                                                                                     

                                                                                                    “Always let your winners ride.”

                                                                                                    Robin Wigglesworth

                                                                                                     

                                                                                                    Guest profile

                                                                                                    Robin Wigglesworth is the editor of Alphaville, the FT’s financial blog. From Oslo, Norway, he leads a team of writers who dig into anything deeply nerdy or plain delightful that they spot in markets, business, or the global economy. He is also the author of Trillions, a book on the past, present, and future of passive investing and how it is reshaping financial markets.

                                                                                                    Worst investment ever

                                                                                                    Robin was a Middle East correspondent for The Financial Times after the financial crisis. The crisis hit later in the Middle East because of the oil price boom. Until the collapse of Lehman, the Gulf was partying. Robin was impressed with how quickly central banks reacted in the last quarter of 2008 after the Lehman collapse.

                                                                                                    As a journalist, Robin couldn’t invest in any company he covered, even if it was a broad index fund. But because Robin was in the Middle East, there was a lot of this stuff that he didn’t cover.

                                                                                                    In the Gulf, the dirham was pegged to the dollar, so it was suddenly worth a lot more. Robin didn’t have much money, but he had banked the odd few special payments he’d received for special reports on the FT. He put that money in an ETF in Norway, a consumer durables company called Orkla, and a fertilizer company called Yara.

                                                                                                    Robin’s choice of investments was brilliant because these companies did incredibly well. Unfortunately, Robin reacted to short-term headlines when the European crisis started erupting and sold out. However, he kept Yara because he figured the world would always need fertilizers to grow food. But Yara got embroiled in a corruption scandal.

                                                                                                    Had Robin kept that small pot of money running to date, he’d now have a far larger pot of money.

                                                                                                    Lessons learned

                                                                                                    • You can’t outsmart the markets as a whole.
                                                                                                    • If you want to trade, you must find something you know and nobody else has discovered.
                                                                                                    • Always let your winners ride.
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s takeaways

                                                                                                    • The average investor in America destroys 30 to 50% of the value that they could have captured in, for example, an index fund simply because of their timing decisions.
                                                                                                    • First, you have to be able to see the opportunity, then have cash and the flexibility to invest in it, and finally, have the guts to actually pull the trigger and do it and let it ride.
                                                                                                    
                                                                                                    

                                                                                                    Robin’s recommendations

                                                                                                    Robin recommends reading his book Trillions and registering for free to read Alphaville and learn about passive investing.

                                                                                                    No.1 goal for the next 12 months

                                                                                                    Robin’s number one goal for the next 12 months is to write another book on the history of the bond market.

                                                                                                    Parting words

                                                                                                     

                                                                                                    “Buy my book, buy index funds, and most of all, stay boring. I think keeping it simple is the best thing.”

                                                                                                    Robin Wigglesworth

                                                                                                     

                                                                                                    [spp-transcript]

                                                                                                     

                                                                                                    Connect with Robin Wigglesworth

                                                                                                    • LinkedIn
                                                                                                    • Twitter
                                                                                                    • Website
                                                                                                    • Books
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s books

                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                    • My Worst Investment Ever
                                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s online programs

                                                                                                    • Valuation Master Class
                                                                                                    • The Become a Better Investor Community
                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                    • Finance Made Ridiculously Simple
                                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                    • Achieve Your Goals
                                                                                                    
                                                                                                    

                                                                                                    Connect with Andrew Stotz:

                                                                                                    • astotz.com
                                                                                                    • LinkedIn
                                                                                                    • Facebook
                                                                                                    • Instagram
                                                                                                    • Threads
                                                                                                    • Twitter
                                                                                                    • YouTube
                                                                                                    • My Worst Investment Ever Podcast
                                                                                                    
                                                                                                    ]]>BIO: Robin Wigglesworth is the editor of Alphaville, the FT’s financial blog. From Oslo, Norway, he leads a team of writers who dig into anything deeply nerdy or plain delightful that they spot in markets, business, or the global economy.

                                                                                                    STORY: Robin invested in an ETF in Norway, a consumer durables company, and a fertilizer company after the 2008 financial crisis. These companies did incredibly well. Unfortunately, Robin reacted to short-term headlines when the European crisis started erupting and sold out.

                                                                                                    LEARNING: You can’t outsmart the markets. Always let your winners ride.

                                                                                                     

                                                                                                    “Always let your winners ride.”

                                                                                                    Robin Wigglesworth

                                                                                                     

                                                                                                    Guest profile

                                                                                                    Robin Wigglesworth is the editor of Alphaville, the FT’s financial blog. From Oslo, Norway, he leads a team of writers who dig into anything deeply nerdy or plain delightful that they spot in markets, business, or the global economy. He is also the author of Trillions, a book on the past, present, and future of passive investing and how it is reshaping financial markets.

                                                                                                    Worst investment ever

                                                                                                    Robin was a Middle East correspondent for The Financial Times after the financial crisis. The crisis hit later in the Middle East because of the oil price boom. Until the collapse of Lehman, the Gulf was partying. Robin was impressed with how quickly central banks reacted in the last quarter of 2008 after the Lehman collapse.

                                                                                                    As a journalist, Robin couldn’t invest in any company he covered, even if it was a broad index fund. But because Robin was in the Middle East, there was a lot of this stuff that he didn’t cover.

                                                                                                    In the Gulf, the dirham was pegged to the dollar, so it was suddenly worth a lot more. Robin didn’t have much money, but he had banked the odd few special payments he’d received for special reports on the FT. He put that money in an ETF in Norway, a consumer durables company called Orkla, and a fertilizer company called Yara.

                                                                                                    Robin’s choice of investments was brilliant because these companies did incredibly well. Unfortunately, Robin reacted to short-term headlines when the European crisis started erupting and sold out. However, he kept Yara because he figured the world would always need fertilizers to grow food. But Yara got embroiled in a corruption scandal.

                                                                                                    Had Robin kept that small pot of money running to date, he’d now have a far larger pot of money.

                                                                                                    Lessons learned

                                                                                                    • You can’t outsmart the markets as a whole.
                                                                                                    • If you want to trade, you must find something you know and nobody else has discovered.
                                                                                                    • Always let your winners ride.
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s takeaways

                                                                                                    • The average investor in America destroys 30 to 50% of the value that they could have captured in, for example, an index fund simply because of their timing decisions.
                                                                                                    • First, you have to be able to see the opportunity, then have cash and the flexibility to invest in it, and finally, have the guts to actually pull the trigger and do it and let it ride.
                                                                                                    
                                                                                                    

                                                                                                    Robin’s recommendations

                                                                                                    Robin recommends reading his book Trillions and registering for free to read Alphaville and learn about passive investing.

                                                                                                    No.1 goal for the next 12 months

                                                                                                    Robin’s number one goal for the next 12 months is to write another book on the history of the bond market.

                                                                                                    Parting words

                                                                                                     

                                                                                                    “Buy my book, buy index funds, and most of all, stay boring. I think keeping it simple is the best thing.”

                                                                                                    Robin Wigglesworth

                                                                                                     

                                                                                                    [spp-transcript]

                                                                                                     

                                                                                                    Connect with Robin Wigglesworth

                                                                                                    • LinkedIn
                                                                                                    • Twitter
                                                                                                    • Website
                                                                                                    • Books
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s books

                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                    • My Worst Investment Ever
                                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s online programs

                                                                                                    • Valuation Master Class
                                                                                                    • The Become a Better Investor Community
                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                    • Finance Made Ridiculously Simple
                                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                    • Achieve Your Goals
                                                                                                    
                                                                                                    

                                                                                                    Connect with Andrew Stotz:

                                                                                                    • astotz.com
                                                                                                    • LinkedIn
                                                                                                    • Facebook
                                                                                                    • Instagram
                                                                                                    • Threads
                                                                                                    • Twitter
                                                                                                    • YouTube
                                                                                                    • My Worst Investment Ever Podcast
                                                                                                    
                                                                                                    ]]>7f6e8ca5-197b-45be-b4b6-ce46b27c4e86Mon, 25 Sep 2023 06:00:00 +070041:57falsefullSheryl Garratt – Shove Your Ideas Out There and See What HappensBIO: Sheryl Garratt is a coach who helps creative professionals do their best work - while also living their best lives. She was a journalist for more than 30 years, the editor of The Face and The Observer magazines, and has published several books, including Adventures In Wonderland, a history of British nightclubs.

                                                                                                    STORY: Sheryl’s perfectionism, which she wore as a badge of honor, has made her miss out on great opportunities over the last couple of years.

                                                                                                    LEARNING: Shove your ideas out there and see what happens. In business, you should be iterating often.

                                                                                                     

                                                                                                    “Shove your ideas out there and see what happens. If you just sit there reworking the same thing repeatedly, you’ll overwork it and kill the life out of it.”

                                                                                                    Sheryl Garratt

                                                                                                     

                                                                                                    Guest profile

                                                                                                    Sheryl Garratt is a coach who helps creative professionals do their best work - while also living their best lives. She was a journalist for more than 30 years, the editor of The Face and The Observer magazines, and has published several books, including Adventures In Wonderland, a history of British nightclubs.

                                                                                                    Sheryl has a free 10-day course to help writers, artists, musicians, designers, makers, and creatives of all kinds grow their creative business. Sign up for it at free 10-day course.

                                                                                                    Worst investment ever

                                                                                                    Sheryl’s perfectionism has been her worst investment over the years. She used to wear her perfectionism as a badge of honor and thought that meant something exceptional. But it only cost Sheryl dearly. It stopped her from doing things that might have been fun and wasted a lot of her time over the years.

                                                                                                    The ideas that Sheryl spent so much time trying to perfect are the ones she never completed. She must have had over 100 book ideas she never wrote because she couldn’t perfect them. At one point, a major publisher offered Sheryl quite a lot of money for a nonfiction book and asked her to pitch them ideas. By the time Sheryl had honed all those ideas, that editor had moved on and wasn’t working at the publishing house anymore. Sheryl has also had prestigious magazines ask her to send ideas so she can work for them. She’d take too long to work on the ideas, and the magazines would change direction.

                                                                                                    Lessons learned

                                                                                                    • Shove your ideas out there and see what happens.
                                                                                                    • Pitch to people you think are way out of your league and see what happens.
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s takeaways

                                                                                                    • In business, you should be iterating often.
                                                                                                    
                                                                                                    

                                                                                                    Actionable advice

                                                                                                    Do it quickly and set restraints on whatever you’re trying to do. For example, if you’re trying to write something, give yourself an hour to write it, and then put it out in some reasonably low-risk outlet such as a blog or Medium. Then do it again the next week, the week after that, and the week after that, and you’ll get better. But if you just sit there rewriting the same thing repeatedly, you’ll overwork it and kill the life out of it.

                                                                                                    Sheryl’s recommendations

                                                                                                    Sheryl recommends her free 10-day course that outlines how to set up and grow a creative business. The course is relevant for those starting out and also for more established business owners who want a business health check. The course is just 10 emails in 10 days.

                                                                                                    No.1 goal for the next 12 months

                                                                                                    Sheryl’s number one goal is to finish her book by the 31st of December this year. Ready or not, she’ll publish the book next March.

                                                                                                    Parting words

                                                                                                     

                                                                                                    “Just do it.”

                                                                                                    Sheryl Garratt

                                                                                                     

                                                                                                    [spp-transcript]

                                                                                                     

                                                                                                    Connect with Sheryl Garratt

                                                                                                    • LinkedIn
                                                                                                    • Instagram
                                                                                                    • Facebook
                                                                                                    • Twitter
                                                                                                    • Website
                                                                                                    • Books
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s books

                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                    • My Worst Investment Ever
                                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s online programs

                                                                                                    • Valuation Master Class
                                                                                                    • The Become a Better Investor Community
                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                    • Finance Made Ridiculously Simple
                                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                    • Achieve Your Goals
                                                                                                    
                                                                                                    

                                                                                                    Connect with Andrew Stotz:

                                                                                                    • astotz.com
                                                                                                    • LinkedIn
                                                                                                    • Facebook
                                                                                                    • Instagram
                                                                                                    • Threads
                                                                                                    • Twitter
                                                                                                    • YouTube
                                                                                                    • My Worst Investment Ever Podcast
                                                                                                    
                                                                                                    ]]>BIO: Sheryl Garratt is a coach who helps creative professionals do their best work - while also living their best lives. She was a journalist for more than 30 years, the editor of The Face and The Observer magazines, and has published several books, including Adventures In Wonderland, a history of British nightclubs.

                                                                                                    STORY: Sheryl’s perfectionism, which she wore as a badge of honor, has made her miss out on great opportunities over the last couple of years.

                                                                                                    LEARNING: Shove your ideas out there and see what happens. In business, you should be iterating often.

                                                                                                     

                                                                                                    “Shove your ideas out there and see what happens. If you just sit there reworking the same thing repeatedly, you’ll overwork it and kill the life out of it.”

                                                                                                    Sheryl Garratt

                                                                                                     

                                                                                                    Guest profile

                                                                                                    Sheryl Garratt is a coach who helps creative professionals do their best work - while also living their best lives. She was a journalist for more than 30 years, the editor of The Face and The Observer magazines, and has published several books, including Adventures In Wonderland, a history of British nightclubs.

                                                                                                    Sheryl has a free 10-day course to help writers, artists, musicians, designers, makers, and creatives of all kinds grow their creative business. Sign up for it at free 10-day course.

                                                                                                    Worst investment ever

                                                                                                    Sheryl’s perfectionism has been her worst investment over the years. She used to wear her perfectionism as a badge of honor and thought that meant something exceptional. But it only cost Sheryl dearly. It stopped her from doing things that might have been fun and wasted a lot of her time over the years.

                                                                                                    The ideas that Sheryl spent so much time trying to perfect are the ones she never completed. She must have had over 100 book ideas she never wrote because she couldn’t perfect them. At one point, a major publisher offered Sheryl quite a lot of money for a nonfiction book and asked her to pitch them ideas. By the time Sheryl had honed all those ideas, that editor had moved on and wasn’t working at the publishing house anymore. Sheryl has also had prestigious magazines ask her to send ideas so she can work for them. She’d take too long to work on the ideas, and the magazines would change direction.

                                                                                                    Lessons learned

                                                                                                    • Shove your ideas out there and see what happens.
                                                                                                    • Pitch to people you think are way out of your league and see what happens.
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s takeaways

                                                                                                    • In business, you should be iterating often.
                                                                                                    
                                                                                                    

                                                                                                    Actionable advice

                                                                                                    Do it quickly and set restraints on whatever you’re trying to do. For example, if you’re trying to write something, give yourself an hour to write it, and then put it out in some reasonably low-risk outlet such as a blog or Medium. Then do it again the next week, the week after that, and the week after that, and you’ll get better. But if you just sit there rewriting the same thing repeatedly, you’ll overwork it and kill the life out of it.

                                                                                                    Sheryl’s recommendations

                                                                                                    Sheryl recommends her free 10-day course that outlines how to set up and grow a creative business. The course is relevant for those starting out and also for more established business owners who want a business health check. The course is just 10 emails in 10 days.

                                                                                                    No.1 goal for the next 12 months

                                                                                                    Sheryl’s number one goal is to finish her book by the 31st of December this year. Ready or not, she’ll publish the book next March.

                                                                                                    Parting words

                                                                                                     

                                                                                                    “Just do it.”

                                                                                                    Sheryl Garratt

                                                                                                     

                                                                                                    [spp-transcript]

                                                                                                     

                                                                                                    Connect with Sheryl Garratt

                                                                                                    • LinkedIn
                                                                                                    • Instagram
                                                                                                    • Facebook
                                                                                                    • Twitter
                                                                                                    • Website
                                                                                                    • Books
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s books

                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                    • My Worst Investment Ever
                                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s online programs

                                                                                                    • Valuation Master Class
                                                                                                    • The Become a Better Investor Community
                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                    • Finance Made Ridiculously Simple
                                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                    • Achieve Your Goals
                                                                                                    
                                                                                                    

                                                                                                    Connect with Andrew Stotz:

                                                                                                    • astotz.com
                                                                                                    • LinkedIn
                                                                                                    • Facebook
                                                                                                    • Instagram
                                                                                                    • Threads
                                                                                                    • Twitter
                                                                                                    • YouTube
                                                                                                    • My Worst Investment Ever Podcast
                                                                                                    
                                                                                                    ]]>3ec39078-4d33-441a-895f-e24c697b85f2Wed, 20 Sep 2023 06:00:00 +070026:28falsefullKim Ades – Slow It DownBIO: Kim Ades is the Founder of Frame of Mind Coaching™ and Co-Founder of The Journal That Talks Back™. Recognized as a pioneer in leadership coaching and thought mastery, Kim uses her unique philosophy and quirky coaching style to help leaders identify their blind spots and learn to direct their thinking to achieve extraordinary results.

                                                                                                    STORY: Kim had partnered with a friend and her ex-husband to start a business, but as her marriage unraveled, the partnership became hard. Kim decided to sell the company to her husband but didn't take the time to understand the deal. Three years later, Kim learned that she owed the government $300,000 in taxes from the business she'd sold.

                                                                                                    LEARNING: When things are very stressful, it's a good idea to slow down instead of speeding up. Don't be forced into a decision without understanding all the elements.

                                                                                                     

                                                                                                    "If you don't understand what's going on, don't just quickly make a decision. Slow it down, get your information, and make sure you understand fully what's going on."

                                                                                                    Kim Ades

                                                                                                     

                                                                                                    Guest profile

                                                                                                    Kim Ades is the Founder of Frame of Mind Coaching™ and Co-Founder of The Journal That Talks Back™. Recognized as a pioneer in the field of leadership coaching and thought mastery, Kim uses her unique philosophy and quirky coaching style to help leaders identify their blind spots and learn to direct their thinking to achieve extraordinary results. Author, speaker, entrepreneur, coach, and mom of five, Kim's claim to fame is teaching her powerful coaching process to leaders, executives, and entrepreneurs worldwide.

                                                                                                    Worst investment ever

                                                                                                    When Kim started her first company, Upward Motion, she had two business partners. One was a good friend, and the other was her ex-husband. The company built simulation-based assessments to help people make better hiring decisions.

                                                                                                    As Kim's marriage was unraveling, maintaining the partnership became harder and harder. She ended up selling her business to her ex-husband. The problem is that Kim didn't know anything about selling businesses. She was pretty young and didn't know about taxes or tax law. Kim was in a state of upheaval and just wanted to get out and have peace in my life. So, Kim made a deal without really understanding it. All she knew was she was getting out of the mess with a lot of money. It was still hard for Kim because she was very attached to the business.

                                                                                                    About three years later, Kim was contacted by Revenue Canada, notifying her that she hadn't paid her tax bill and owed $300,000. Kim's hastily made decision had led her to this point.

                                                                                                    Lessons learned

                                                                                                    • When things are very stressful, it's a good idea to slow down instead of speeding up.
                                                                                                    • Don't be forced into a decision without understanding all the elements.
                                                                                                    • If you don't know what's happening, slow it down, get your information, and make sure you know entirely what's happening.
                                                                                                    • Don't be pressured into something that is not the right fit for you.
                                                                                                    
                                                                                                    

                                                                                                    Andrew's takeaways

                                                                                                    • If you can sit through the pressure, you will win.
                                                                                                    
                                                                                                    

                                                                                                    Actionable advice

                                                                                                    If you're feeling pressured to make a decision, first ask yourself why, what's the rush, and what's the belief you have that makes you feel like there's an urgency to making this decision. Find out where the pressure is coming from and the facts around it. When does this decision need to be made? Are you prepared to make the decision?

                                                                                                    Kim's recommendations

                                                                                                    Kim recommends journaling because it allows you to put your thoughts down and look at them and see if this thinking leads you to where you want to go. Kim believes journaling is beneficial to help guide you toward your destination.

                                                                                                    No.1 goal for the next 12 months

                                                                                                    Kim's number one goal for the next 12 months is to create a journal-based coaching course for the coaching community.

                                                                                                    Parting words

                                                                                                     

                                                                                                    "Andrew, thank you for all the work that you do. I hope to meet some of your listeners face-to-face at some point."

                                                                                                    Kim Ades

                                                                                                     

                                                                                                    [spp-transcript]

                                                                                                     

                                                                                                    Connect with Kim Ades

                                                                                                    • LinkedIn
                                                                                                    • Instagram
                                                                                                    • Facebook
                                                                                                    • Twitter
                                                                                                    • YouTube
                                                                                                    • Website
                                                                                                    • Podcast
                                                                                                    • Book
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s books

                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                    • My Worst Investment Ever
                                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s online programs

                                                                                                    • Valuation Master Class
                                                                                                    • The Become a Better Investor Community
                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                    • Finance Made Ridiculously Simple
                                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                    • Achieve Your Goals
                                                                                                    
                                                                                                    

                                                                                                    Connect with Andrew Stotz:

                                                                                                    • astotz.com
                                                                                                    • LinkedIn
                                                                                                    • Facebook
                                                                                                    • Instagram
                                                                                                    • Threads
                                                                                                    • Twitter
                                                                                                    • YouTube
                                                                                                    • My Worst Investment Ever Podcast
                                                                                                    
                                                                                                    ]]>BIO: Kim Ades is the Founder of Frame of Mind Coaching™ and Co-Founder of The Journal That Talks Back™. Recognized as a pioneer in leadership coaching and thought mastery, Kim uses her unique philosophy and quirky coaching style to help leaders identify their blind spots and learn to direct their thinking to achieve extraordinary results.

                                                                                                    STORY: Kim had partnered with a friend and her ex-husband to start a business, but as her marriage unraveled, the partnership became hard. Kim decided to sell the company to her husband but didn't take the time to understand the deal. Three years later, Kim learned that she owed the government $300,000 in taxes from the business she'd sold.

                                                                                                    LEARNING: When things are very stressful, it's a good idea to slow down instead of speeding up. Don't be forced into a decision without understanding all the elements.

                                                                                                     

                                                                                                    "If you don't understand what's going on, don't just quickly make a decision. Slow it down, get your information, and make sure you understand fully what's going on."

                                                                                                    Kim Ades

                                                                                                     

                                                                                                    Guest profile

                                                                                                    Kim Ades is the Founder of Frame of Mind Coaching™ and Co-Founder of The Journal That Talks Back™. Recognized as a pioneer in the field of leadership coaching and thought mastery, Kim uses her unique philosophy and quirky coaching style to help leaders identify their blind spots and learn to direct their thinking to achieve extraordinary results. Author, speaker, entrepreneur, coach, and mom of five, Kim's claim to fame is teaching her powerful coaching process to leaders, executives, and entrepreneurs worldwide.

                                                                                                    Worst investment ever

                                                                                                    When Kim started her first company, Upward Motion, she had two business partners. One was a good friend, and the other was her ex-husband. The company built simulation-based assessments to help people make better hiring decisions.

                                                                                                    As Kim's marriage was unraveling, maintaining the partnership became harder and harder. She ended up selling her business to her ex-husband. The problem is that Kim didn't know anything about selling businesses. She was pretty young and didn't know about taxes or tax law. Kim was in a state of upheaval and just wanted to get out and have peace in my life. So, Kim made a deal without really understanding it. All she knew was she was getting out of the mess with a lot of money. It was still hard for Kim because she was very attached to the business.

                                                                                                    About three years later, Kim was contacted by Revenue Canada, notifying her that she hadn't paid her tax bill and owed $300,000. Kim's hastily made decision had led her to this point.

                                                                                                    Lessons learned

                                                                                                    • When things are very stressful, it's a good idea to slow down instead of speeding up.
                                                                                                    • Don't be forced into a decision without understanding all the elements.
                                                                                                    • If you don't know what's happening, slow it down, get your information, and make sure you know entirely what's happening.
                                                                                                    • Don't be pressured into something that is not the right fit for you.
                                                                                                    
                                                                                                    

                                                                                                    Andrew's takeaways

                                                                                                    • If you can sit through the pressure, you will win.
                                                                                                    
                                                                                                    

                                                                                                    Actionable advice

                                                                                                    If you're feeling pressured to make a decision, first ask yourself why, what's the rush, and what's the belief you have that makes you feel like there's an urgency to making this decision. Find out where the pressure is coming from and the facts around it. When does this decision need to be made? Are you prepared to make the decision?

                                                                                                    Kim's recommendations

                                                                                                    Kim recommends journaling because it allows you to put your thoughts down and look at them and see if this thinking leads you to where you want to go. Kim believes journaling is beneficial to help guide you toward your destination.

                                                                                                    No.1 goal for the next 12 months

                                                                                                    Kim's number one goal for the next 12 months is to create a journal-based coaching course for the coaching community.

                                                                                                    Parting words

                                                                                                     

                                                                                                    "Andrew, thank you for all the work that you do. I hope to meet some of your listeners face-to-face at some point."

                                                                                                    Kim Ades

                                                                                                     

                                                                                                    [spp-transcript]

                                                                                                     

                                                                                                    Connect with Kim Ades

                                                                                                    • LinkedIn
                                                                                                    • Instagram
                                                                                                    • Facebook
                                                                                                    • Twitter
                                                                                                    • YouTube
                                                                                                    • Website
                                                                                                    • Podcast
                                                                                                    • Book
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s books

                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                    • My Worst Investment Ever
                                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s online programs

                                                                                                    • Valuation Master Class
                                                                                                    • The Become a Better Investor Community
                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                    • Finance Made Ridiculously Simple
                                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                    • Achieve Your Goals
                                                                                                    
                                                                                                    

                                                                                                    Connect with Andrew Stotz:

                                                                                                    • astotz.com
                                                                                                    • LinkedIn
                                                                                                    • Facebook
                                                                                                    • Instagram
                                                                                                    • Threads
                                                                                                    • Twitter
                                                                                                    • YouTube
                                                                                                    • My Worst Investment Ever Podcast
                                                                                                    
                                                                                                    ]]>5547e53c-1dcc-4dea-9a78-20f0a8d649ebMon, 18 Sep 2023 06:00:00 +070030:29falsefullNick Hutchison – Have a Proof of Concept Before You Dive Into the Big IdeaBIO: Nick Hutchison is the author of Rise of the Reader: Strategies for Mastering Your Reading Habits and Applying What You Learn and the founder of BookThinkers. This growing 7-figure digital marketing agency serves mission-driven authors.

                                                                                                    STORY: Nick envisioned the first iteration of BookThinkers to be a grand mobile application. He got partners together, and they started working on the idea. Without much research or due diligence, the partners contracted an Argentinian company to build the app. Unfortunately, the company in Argentina went out of business under a year later.

                                                                                                    LEARNING: Failure is a great thing. Before you dive into a big idea, have a proof of concept and spend tens of thousands of dollars on it. Do more due diligence and understand the process before jumping into it.

                                                                                                     

                                                                                                    “I think that failure is a great thing. You should fail often and fast. Then make iterations and change.”

                                                                                                    Nick Hutchison

                                                                                                     

                                                                                                    Guest profile

                                                                                                    Nick Hutchison is the author of Rise of the Reader: Strategies for Mastering Your Reading Habits and Applying What You Learn and founder of BookThinkers, a growing 7-figure digital marketing agency that serves mission-driven authors.

                                                                                                    At the age of 20, Nick discovered the world of personal development and quickly used the books he was reading to improve every aspect of his personal and professional life. Now, Nick has dedicated his life to helping millions of readers take action on the information they learn and rise to their potential.

                                                                                                    Nick’s podcast, BookThinkers: Life-Changing Books, features captivating interviews with world-class authors such as Grant Cardone, Lewis Howes, and Alex Hormozi. During these insightful discussions, Nick delves into the pages of their books, uncovering practical and transformative takeaways for his motivated audience.

                                                                                                    Worst investment ever

                                                                                                    As Nick was getting ready to graduate college, he knew he wanted to start a business and make a splash in entrepreneurship. Luckily, Nick had a safety net—a software sales rep full-time job that allowed him to make a lot of money right after graduating. So Nick had a bit of cash to spend on a side hustle idea he’d had for a while.

                                                                                                    The first iteration of BookThinkers was supposed to be a grand mobile application that readers could use to categorize their favorite takeaways from each book they read, follow each other, and see the trending books within the platform. It was supposed to be a much better version of what Good Reads is today.

                                                                                                    Nick connected with a couple of friends and started this business. The first order of business was how to build a mobile application. They found a firm in Argentina that would create the mobile application for them. They put all of their money that we’ve got into this mobile app.

                                                                                                    The company in Argentina went out of business under a year later. The tech built so far wasn’t working, so they couldn’t test it. Nick and his partners never found a product market fit and had no successful monetization after spending tens of thousands of dollars on the mobile app.

                                                                                                    Lessons learned

                                                                                                    • Failure is a great thing. Fail often and fast, then make iterations and changes.
                                                                                                    • Have a proof of concept before you dive into a big idea and spend tons of money on it.
                                                                                                    • Do more due diligence and understand the process before jumping into it.
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s takeaways

                                                                                                    • If you have to have a mobile app, the best way to do it is to create a tiny MVP that does one small thing and then release it to an audience.
                                                                                                    
                                                                                                    

                                                                                                    Actionable advice

                                                                                                    Speak to potential mentors or people who have severally done what you want to do and have also helped other people do it as well. Have them show you the roadmap.

                                                                                                    Nick’s recommendations

                                                                                                    Nick recommends reading $100M Offers: How To Make Offers So Good People Feel Stupid Saying No. In the book, the author Alex Hormozi talks about how 20% of your customers are willing to pay five times more if you could provide more value. He teaches how to have the same revenue but work with 1/5 of your clientele, serve them better, work slower, and offer more value.

                                                                                                    Nick also recommends pre-ordering his book Rise of the Reader: Strategies for Mastering Your Reading Habits and Applying What You Learn. The book has the power to help readers rise to their potential.

                                                                                                    No.1 goal for the next 12 months

                                                                                                    Nick’s number one goal for the next 12 months is to make seven figures in revenue. He also plans to have a kid in the next 12 months.

                                                                                                    Parting words

                                                                                                     

                                                                                                    “The right book at the right time can change your life if you can apply it the right way. So, just remember that our life experiences aren’t as unique as we think they are. Billions of people have lived before us; millions of them have written books, and thousands of those books might be able to solve your problems.”

                                                                                                    Nick Hutchison

                                                                                                     

                                                                                                    [spp-transcript]

                                                                                                     

                                                                                                    Connect with Nick Hutchison

                                                                                                    • LinkedIn
                                                                                                    • Instagram
                                                                                                    • Website
                                                                                                    • Podcast
                                                                                                    • Book
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s books

                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                    • My Worst Investment Ever
                                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s online programs

                                                                                                    • Valuation Master Class
                                                                                                    • The Become a Better Investor Community
                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                    • Finance Made Ridiculously Simple
                                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                    • Achieve Your Goals
                                                                                                    
                                                                                                    

                                                                                                    Connect with Andrew Stotz:

                                                                                                    • astotz.com
                                                                                                    • LinkedIn
                                                                                                    • Facebook
                                                                                                    • Instagram
                                                                                                    • Threads
                                                                                                    • Twitter
                                                                                                    • YouTube
                                                                                                    • My Worst Investment Ever Podcast
                                                                                                    
                                                                                                    ]]>BIO: Nick Hutchison is the author of Rise of the Reader: Strategies for Mastering Your Reading Habits and Applying What You Learn and the founder of BookThinkers. This growing 7-figure digital marketing agency serves mission-driven authors.

                                                                                                    STORY: Nick envisioned the first iteration of BookThinkers to be a grand mobile application. He got partners together, and they started working on the idea. Without much research or due diligence, the partners contracted an Argentinian company to build the app. Unfortunately, the company in Argentina went out of business under a year later.

                                                                                                    LEARNING: Failure is a great thing. Before you dive into a big idea, have a proof of concept and spend tens of thousands of dollars on it. Do more due diligence and understand the process before jumping into it.

                                                                                                     

                                                                                                    “I think that failure is a great thing. You should fail often and fast. Then make iterations and change.”

                                                                                                    Nick Hutchison

                                                                                                     

                                                                                                    Guest profile

                                                                                                    Nick Hutchison is the author of Rise of the Reader: Strategies for Mastering Your Reading Habits and Applying What You Learn and founder of BookThinkers, a growing 7-figure digital marketing agency that serves mission-driven authors.

                                                                                                    At the age of 20, Nick discovered the world of personal development and quickly used the books he was reading to improve every aspect of his personal and professional life. Now, Nick has dedicated his life to helping millions of readers take action on the information they learn and rise to their potential.

                                                                                                    Nick’s podcast, BookThinkers: Life-Changing Books, features captivating interviews with world-class authors such as Grant Cardone, Lewis Howes, and Alex Hormozi. During these insightful discussions, Nick delves into the pages of their books, uncovering practical and transformative takeaways for his motivated audience.

                                                                                                    Worst investment ever

                                                                                                    As Nick was getting ready to graduate college, he knew he wanted to start a business and make a splash in entrepreneurship. Luckily, Nick had a safety net—a software sales rep full-time job that allowed him to make a lot of money right after graduating. So Nick had a bit of cash to spend on a side hustle idea he’d had for a while.

                                                                                                    The first iteration of BookThinkers was supposed to be a grand mobile application that readers could use to categorize their favorite takeaways from each book they read, follow each other, and see the trending books within the platform. It was supposed to be a much better version of what Good Reads is today.

                                                                                                    Nick connected with a couple of friends and started this business. The first order of business was how to build a mobile application. They found a firm in Argentina that would create the mobile application for them. They put all of their money that we’ve got into this mobile app.

                                                                                                    The company in Argentina went out of business under a year later. The tech built so far wasn’t working, so they couldn’t test it. Nick and his partners never found a product market fit and had no successful monetization after spending tens of thousands of dollars on the mobile app.

                                                                                                    Lessons learned

                                                                                                    • Failure is a great thing. Fail often and fast, then make iterations and changes.
                                                                                                    • Have a proof of concept before you dive into a big idea and spend tons of money on it.
                                                                                                    • Do more due diligence and understand the process before jumping into it.
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s takeaways

                                                                                                    • If you have to have a mobile app, the best way to do it is to create a tiny MVP that does one small thing and then release it to an audience.
                                                                                                    
                                                                                                    

                                                                                                    Actionable advice

                                                                                                    Speak to potential mentors or people who have severally done what you want to do and have also helped other people do it as well. Have them show you the roadmap.

                                                                                                    Nick’s recommendations

                                                                                                    Nick recommends reading $100M Offers: How To Make Offers So Good People Feel Stupid Saying No. In the book, the author Alex Hormozi talks about how 20% of your customers are willing to pay five times more if you could provide more value. He teaches how to have the same revenue but work with 1/5 of your clientele, serve them better, work slower, and offer more value.

                                                                                                    Nick also recommends pre-ordering his book Rise of the Reader: Strategies for Mastering Your Reading Habits and Applying What You Learn. The book has the power to help readers rise to their potential.

                                                                                                    No.1 goal for the next 12 months

                                                                                                    Nick’s number one goal for the next 12 months is to make seven figures in revenue. He also plans to have a kid in the next 12 months.

                                                                                                    Parting words

                                                                                                     

                                                                                                    “The right book at the right time can change your life if you can apply it the right way. So, just remember that our life experiences aren’t as unique as we think they are. Billions of people have lived before us; millions of them have written books, and thousands of those books might be able to solve your problems.”

                                                                                                    Nick Hutchison

                                                                                                     

                                                                                                    [spp-transcript]

                                                                                                     

                                                                                                    Connect with Nick Hutchison

                                                                                                    • LinkedIn
                                                                                                    • Instagram
                                                                                                    • Website
                                                                                                    • Podcast
                                                                                                    • Book
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s books

                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                    • My Worst Investment Ever
                                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s online programs

                                                                                                    • Valuation Master Class
                                                                                                    • The Become a Better Investor Community
                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                    • Finance Made Ridiculously Simple
                                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                    • Achieve Your Goals
                                                                                                    
                                                                                                    

                                                                                                    Connect with Andrew Stotz:

                                                                                                    • astotz.com
                                                                                                    • LinkedIn
                                                                                                    • Facebook
                                                                                                    • Instagram
                                                                                                    • Threads
                                                                                                    • Twitter
                                                                                                    • YouTube
                                                                                                    • My Worst Investment Ever Podcast
                                                                                                    
                                                                                                    ]]>91570c75-8b31-43eb-92c2-2dc8dc92959cFri, 15 Sep 2023 06:00:00 +070023:21falsefullISMS 30: Larry Swedroe – Do You Believe Your Fortune Is in the Stars or Rely on Misleading Information?In this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Today, they discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this tenth series, they discuss mistake number 18: Do you believe your fortune is in the stars? And mistake number 19: Do you rely on misleading information?

                                                                                                    LEARNING: Stop thinking about having your fortune in the stars. Avoid actively managed funds. Be cautious when evaluating claims about fund performance.

                                                                                                     

                                                                                                    “Stop thinking about having your fortune in the stars. Morningstar won’t help you.”

                                                                                                    Larry Swedroe

                                                                                                     

                                                                                                    In today’s episode, Andrew continues his discussion with Larry Swedroe, head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                                                    Larry deeply understands the world of academic research and investing, especially risk. Today Andrew and Larry discuss a chapter of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this tenth series, they discuss mistake number 18: 18: Do you believe your fortune is in the stars? And mistake number 19: Do you rely on misleading information?

                                                                                                    Did you miss out on previous mistakes? Check them out:

                                                                                                    • ISMS 8: Larry Swedroe – Are You Overconfident in Your Skills?
                                                                                                    • ISMS 17: Larry Swedroe – Do You Project Recent Trends Indefinitely Into the Future?
                                                                                                    • ISMS 20: Larry Swedroe – Do You Extrapolate From Small Samples and Trust Your Intuition?
                                                                                                    • ISMS 23: Larry Swedroe – Do You Allow Yourself to Be Influenced by Your Ego and Herd Mentality?
                                                                                                    • ISMS 24: Larry Swedroe – Confusing Skill and Luck Can Stop You From Investing Wisely
                                                                                                    • ISMS 25: Larry Swedroe – Admit Your Mistakes and Don’t Listen to Fake Experts
                                                                                                    • ISMS 26: Larry Swedroe – Are You Subject to the Endowment Effect or the Hot Streak Fallacy?
                                                                                                    • ISMS 27: Larry Swedroe – Familiar Doesn’t Make It Safe and You’re Not Playing With the House’s Money
                                                                                                    • ISMS 29: Larry Swedroe – The Shiny Apple is Poisonous and Information is Not Knowledge
                                                                                                    
                                                                                                    

                                                                                                    Mistake number 18: Do you believe your fortune is in the stars?

                                                                                                    According to Larry, people are still relying heavily on Morningstar ratings. When Morningstar increases its rating, cash tends to flow in, and money flows out when it lowers its rating. Morningstar’s ratings, similar to film critics’ ratings, are widely used by investors to determine fund performance and which funds to invest in.

                                                                                                    However, these ratings are not a reliable way to choose your investment. Even Morningstar eventually reported in a study that they found that the fund’s expense ratio was a better predictor than Morningstar’s ratings. According to Larry, that’s precisely what you would expect if markets are efficient, which means that good stock pickers can’t exploit the market.

                                                                                                    So, people who rely on Morningstar ratings are just fooling themselves. There’s no informational value in Morningstar’s rating system.

                                                                                                    Larry says that investors are best served by simply avoiding actively managed funds. Choose the asset classes you want to invest in, then do some research. Look for low-cost funds/instruments that give you the most exposure per unit of cost. Stop thinking about having your fortune in the stars. Morningstar won’t help you. Neither will an advisor who’s recommending actively managed funds.

                                                                                                    Mistake number 19: Do you rely on misleading information?

                                                                                                    In this chapter, Larry discusses the issue of misleading information in the investment industry, particularly concerning mutual fund returns, and highlights two biases that distort reported returns.

                                                                                                    According to Larry, survivorship bias is where poorly performing funds disappear over time through mergers with better-performing funds. However, the reported performance of the merged funds doesn’t reflect the poor returns of the disappearing funds. This bias leads to an overestimation of average fund returns, as demonstrated by an example from 1986 to 1996, where the disappearance of underperforming funds led to an apparent improvement in overall returns.

                                                                                                    Larry mentions a second bias, incubator funds. These are newly created funds that mutual fund families seed with their capital and keep away from public scrutiny. Fund companies often bring public only the fund with the best performance from a group of incubator funds, effectively hiding the underperforming ones. The SEC’s allowance for not reporting the pre-public performance of incubator funds leads to potential distortions in reported returns. Examples of abuse, such as allocating hot initial public offerings (IPOs) to small incubator funds to enhance their returns, further exacerbate this bias.

                                                                                                    Larry recommends prohibiting advertising returns before a fund is available to the public. This could help mitigate the potential for biased reporting. Additionally, he advises investors to be cautious when evaluating claims about fund performance and to ensure that reported data doesn’t contain the two biases he’s mentioned.

                                                                                                    About Larry Swedroe

                                                                                                    Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                                                    Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                                                    Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                                                    Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                                                     

                                                                                                    [spp-transcript]

                                                                                                     

                                                                                                    Connect with Larry Swedroe

                                                                                                    • LinkedIn
                                                                                                    • Twitter
                                                                                                    • Website
                                                                                                    • Books
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s books

                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                    • My Worst Investment Ever
                                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                    
                                                                                                    

                                                                                                    Andrew’s online programs

                                                                                                    • In this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Today, they discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this tenth series, they discuss mistake number 18: Do you believe your fortune is in the stars? And mistake number 19: Do you rely on misleading information?

                                                                                                      LEARNING: Stop thinking about having your fortune in the stars. Avoid actively managed funds. Be cautious when evaluating claims about fund performance.

                                                                                                       

                                                                                                      “Stop thinking about having your fortune in the stars. Morningstar won’t help you.”

                                                                                                      Larry Swedroe

                                                                                                       

                                                                                                      In today’s episode, Andrew continues his discussion with Larry Swedroe, head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                                                      Larry deeply understands the world of academic research and investing, especially risk. Today Andrew and Larry discuss a chapter of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this tenth series, they discuss mistake number 18: 18: Do you believe your fortune is in the stars? And mistake number 19: Do you rely on misleading information?

                                                                                                      Did you miss out on previous mistakes? Check them out:

                                                                                                      • ISMS 8: Larry Swedroe – Are You Overconfident in Your Skills?
                                                                                                      • ISMS 17: Larry Swedroe – Do You Project Recent Trends Indefinitely Into the Future?
                                                                                                      • ISMS 20: Larry Swedroe – Do You Extrapolate From Small Samples and Trust Your Intuition?
                                                                                                      • ISMS 23: Larry Swedroe – Do You Allow Yourself to Be Influenced by Your Ego and Herd Mentality?
                                                                                                      • ISMS 24: Larry Swedroe – Confusing Skill and Luck Can Stop You From Investing Wisely
                                                                                                      • ISMS 25: Larry Swedroe – Admit Your Mistakes and Don’t Listen to Fake Experts
                                                                                                      • ISMS 26: Larry Swedroe – Are You Subject to the Endowment Effect or the Hot Streak Fallacy?
                                                                                                      • ISMS 27: Larry Swedroe – Familiar Doesn’t Make It Safe and You’re Not Playing With the House’s Money
                                                                                                      • ISMS 29: Larry Swedroe – The Shiny Apple is Poisonous and Information is Not Knowledge
                                                                                                      
                                                                                                      

                                                                                                      Mistake number 18: Do you believe your fortune is in the stars?

                                                                                                      According to Larry, people are still relying heavily on Morningstar ratings. When Morningstar increases its rating, cash tends to flow in, and money flows out when it lowers its rating. Morningstar’s ratings, similar to film critics’ ratings, are widely used by investors to determine fund performance and which funds to invest in.

                                                                                                      However, these ratings are not a reliable way to choose your investment. Even Morningstar eventually reported in a study that they found that the fund’s expense ratio was a better predictor than Morningstar’s ratings. According to Larry, that’s precisely what you would expect if markets are efficient, which means that good stock pickers can’t exploit the market.

                                                                                                      So, people who rely on Morningstar ratings are just fooling themselves. There’s no informational value in Morningstar’s rating system.

                                                                                                      Larry says that investors are best served by simply avoiding actively managed funds. Choose the asset classes you want to invest in, then do some research. Look for low-cost funds/instruments that give you the most exposure per unit of cost. Stop thinking about having your fortune in the stars. Morningstar won’t help you. Neither will an advisor who’s recommending actively managed funds.

                                                                                                      Mistake number 19: Do you rely on misleading information?

                                                                                                      In this chapter, Larry discusses the issue of misleading information in the investment industry, particularly concerning mutual fund returns, and highlights two biases that distort reported returns.

                                                                                                      According to Larry, survivorship bias is where poorly performing funds disappear over time through mergers with better-performing funds. However, the reported performance of the merged funds doesn’t reflect the poor returns of the disappearing funds. This bias leads to an overestimation of average fund returns, as demonstrated by an example from 1986 to 1996, where the disappearance of underperforming funds led to an apparent improvement in overall returns.

                                                                                                      Larry mentions a second bias, incubator funds. These are newly created funds that mutual fund families seed with their capital and keep away from public scrutiny. Fund companies often bring public only the fund with the best performance from a group of incubator funds, effectively hiding the underperforming ones. The SEC’s allowance for not reporting the pre-public performance of incubator funds leads to potential distortions in reported returns. Examples of abuse, such as allocating hot initial public offerings (IPOs) to small incubator funds to enhance their returns, further exacerbate this bias.

                                                                                                      Larry recommends prohibiting advertising returns before a fund is available to the public. This could help mitigate the potential for biased reporting. Additionally, he advises investors to be cautious when evaluating claims about fund performance and to ensure that reported data doesn’t contain the two biases he’s mentioned.

                                                                                                      About Larry Swedroe

                                                                                                      Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                                                      Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                                                      Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                                                      Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                                                       

                                                                                                      [spp-transcript]

                                                                                                       

                                                                                                      Connect with Larry Swedroe

                                                                                                      • LinkedIn
                                                                                                      • Twitter
                                                                                                      • Website
                                                                                                      • Books
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s books

                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • My Worst Investment Ever
                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s online programs

                                                                                                      • Valuation Master Class
                                                                                                      • The Become a Better Investor Community
                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • Finance Made Ridiculously Simple
                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                      • Achieve Your Goals
                                                                                                      
                                                                                                      

                                                                                                      Connect with Andrew Stotz:

                                                                                                      • astotz.com
                                                                                                      • LinkedIn
                                                                                                      • Facebook
                                                                                                      • Instagram
                                                                                                      • Twitter
                                                                                                      • YouTube
                                                                                                      • My Worst Investment Ever Podcast
                                                                                                      
                                                                                                      

                                                                                                      Further reading mentioned

                                                                                                      • Larry Swedroe and RC Balaban, Investment Mistakes Even Smart Investors Make and How to Avoid Them
                                                                                                      • Philip E. Tetlock, Expert Political Judgment: How Good Is It? How Can We Know?
                                                                                                      • Gary Belsky and Thomas Gilovich, Why Smart People Make Big Money Mistakes and How to Correct Them: Lessons from the Life-Changing Science of Behavioral Economics
                                                                                                      • Larry Swedroe, Think, Act, and Invest Like Warren Buffett: The Winning Strategy to Help You Achieve Your Financial and Life Goals
                                                                                                      
                                                                                                      ]]>4d4ebf01-102b-42ad-b268-52adea7cd1a8Fri, 08 Sep 2023 06:00:00 +070031:39falsefullLaurie Barkman – Quit Often Quit FastBIO: Laurie Barkman, the business transition sherpa, is the former CEO of a $100 million revenue company that was sold to a Fortune 50 company.

                                                                                                      STORY: Though Laurie has had a flourishing career in the startup world, she regrets not spending that time building her own business.

                                                                                                      LEARNING: Quit often, quit fast. Don’t hesitate, or stay in something that doesn’t bring you value. Pay attention to your instinct; don’t be afraid to act on it.

                                                                                                       

                                                                                                      “Gravitate towards your strengths and follow your passions if you’re clear about what they are.”

                                                                                                      Laurie Barkman

                                                                                                       

                                                                                                      Guest profile

                                                                                                      Laurie Barkman, the business transition sherpa, is the former CEO of a $100 million revenue company that was sold to a Fortune 50 company.

                                                                                                      Laurie guides business owners through the often overwhelming process of transition planning. As a mergers and acquisitions intermediary, she facilitates sell-side and buy-side transactions in the lower middle market.

                                                                                                      Laurie is the Amazon best-selling author of The Business Transition Handbook: How to Avoid Succession Pitfalls and Create Valuable Exit Options and hosts the award-winning podcast Succession Stories, rated in the top 2.5% of podcasts globally.

                                                                                                      Laurie earned an MBA from Carnegie Mellon University and a bachelor’s from Cornell University. She received a professional designation from The Alliance of Mergers & Acquisitions Advisors.

                                                                                                      Get a complimentary business assessment. See how an acquirer would evaluate your business, enabling you to focus today on what will be important down the road. Learn what changes could double the value of your business.

                                                                                                      Worst investment ever

                                                                                                      When Laurie was studying for her MBA, she also took entrepreneurship courses and was the president of the entrepreneurship club. Laurie was excited about graduating and going into entrepreneurship. But, she didn’t have the big idea or tech skills. This was in the late 90s when it was all about tech startups. Laurie also lacked the risk profile. So, instead of starting a business or buying an existing one after her MBA, she joined a startup, which in and of itself was a good thing.

                                                                                                      Looking back at her career, most of the positions Laurie had helped her add value and grow professionally. But one or two roles made her realize that she should have invested her time in building her own business instead of going into employment.

                                                                                                      Lessons learned

                                                                                                      • Try to figure out what you’re good at, what you’re not, and what you enjoy and don’t before settling on a permanent career path.
                                                                                                      • Gravitate towards your strengths and follow your passions if you’re clear about them.
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s takeaways

                                                                                                      • Quit often, quit fast. Don’t hesitate, or stay in something that doesn’t bring you value.
                                                                                                      • Pay attention to your instinct; don’t be afraid to act on it.
                                                                                                      
                                                                                                      

                                                                                                      Actionable advice

                                                                                                      It’s important to trust your instincts. If you’re feeling unsure about something, trust that little voice.

                                                                                                      Laurie’s recommendations

                                                                                                      Laurie recommends her book, The Business Transition Handbook, for business owners with questions about business transition at any stage of their entrepreneurial journey. The book has a lot of content, resources, and ideas for how to help you build your business with the mindset of creating value. Every chapter is a succession pitfall to avoid and ends with an action summary and tips on your next steps. There’s great content, stories, and case studies for companies that have had some challenges and successes along the way.

                                                                                                      Laurie also recommends checking out her website for other resources, including two assessments you can take. One is a business assessment to understand your business’s strengths, opportunities, or risks. And if you share your financial information, you’ll also get a valuation of your business. The other assessment is for personal transition readiness to help you understand the emotional side of things.

                                                                                                      No.1 goal for the next 12 months

                                                                                                      Laurie’s number one goal for the next 12 months is to help a million business owners with business transitions. She’d like to take her book and make a course.

                                                                                                      Parting words

                                                                                                       

                                                                                                      “Keep on working on your transition; you’ll always remember the value it brought you.”

                                                                                                      Laurie Barkman

                                                                                                       

                                                                                                      [spp-transcript]

                                                                                                       

                                                                                                      Connect with Laurie Barkman

                                                                                                      • LinkedIn
                                                                                                      • Facebook
                                                                                                      • Twitter
                                                                                                      • Instagram
                                                                                                      • YouTube
                                                                                                      • Website
                                                                                                      • Podcast
                                                                                                      • Book
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s books

                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • My Worst Investment Ever
                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s online programs

                                                                                                      • Valuation Master Class
                                                                                                      • The Become a Better Investor Community
                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • Finance Made Ridiculously Simple
                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                      • Achieve Your Goals
                                                                                                      
                                                                                                      

                                                                                                      Connect with Andrew Stotz:

                                                                                                      • astotz.com
                                                                                                      • LinkedIn
                                                                                                      • Facebook
                                                                                                      • Instagram
                                                                                                      • Threads
                                                                                                      • Twitter
                                                                                                      • YouTube
                                                                                                      • My Worst Investment Ever Podcast
                                                                                                      
                                                                                                      ]]>BIO: Laurie Barkman, the business transition sherpa, is the former CEO of a $100 million revenue company that was sold to a Fortune 50 company.

                                                                                                      STORY: Though Laurie has had a flourishing career in the startup world, she regrets not spending that time building her own business.

                                                                                                      LEARNING: Quit often, quit fast. Don’t hesitate, or stay in something that doesn’t bring you value. Pay attention to your instinct; don’t be afraid to act on it.

                                                                                                       

                                                                                                      “Gravitate towards your strengths and follow your passions if you’re clear about what they are.”

                                                                                                      Laurie Barkman

                                                                                                       

                                                                                                      Guest profile

                                                                                                      Laurie Barkman, the business transition sherpa, is the former CEO of a $100 million revenue company that was sold to a Fortune 50 company.

                                                                                                      Laurie guides business owners through the often overwhelming process of transition planning. As a mergers and acquisitions intermediary, she facilitates sell-side and buy-side transactions in the lower middle market.

                                                                                                      Laurie is the Amazon best-selling author of The Business Transition Handbook: How to Avoid Succession Pitfalls and Create Valuable Exit Options and hosts the award-winning podcast Succession Stories, rated in the top 2.5% of podcasts globally.

                                                                                                      Laurie earned an MBA from Carnegie Mellon University and a bachelor’s from Cornell University. She received a professional designation from The Alliance of Mergers & Acquisitions Advisors.

                                                                                                      Get a complimentary business assessment. See how an acquirer would evaluate your business, enabling you to focus today on what will be important down the road. Learn what changes could double the value of your business.

                                                                                                      Worst investment ever

                                                                                                      When Laurie was studying for her MBA, she also took entrepreneurship courses and was the president of the entrepreneurship club. Laurie was excited about graduating and going into entrepreneurship. But, she didn’t have the big idea or tech skills. This was in the late 90s when it was all about tech startups. Laurie also lacked the risk profile. So, instead of starting a business or buying an existing one after her MBA, she joined a startup, which in and of itself was a good thing.

                                                                                                      Looking back at her career, most of the positions Laurie had helped her add value and grow professionally. But one or two roles made her realize that she should have invested her time in building her own business instead of going into employment.

                                                                                                      Lessons learned

                                                                                                      • Try to figure out what you’re good at, what you’re not, and what you enjoy and don’t before settling on a permanent career path.
                                                                                                      • Gravitate towards your strengths and follow your passions if you’re clear about them.
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s takeaways

                                                                                                      • Quit often, quit fast. Don’t hesitate, or stay in something that doesn’t bring you value.
                                                                                                      • Pay attention to your instinct; don’t be afraid to act on it.
                                                                                                      
                                                                                                      

                                                                                                      Actionable advice

                                                                                                      It’s important to trust your instincts. If you’re feeling unsure about something, trust that little voice.

                                                                                                      Laurie’s recommendations

                                                                                                      Laurie recommends her book, The Business Transition Handbook, for business owners with questions about business transition at any stage of their entrepreneurial journey. The book has a lot of content, resources, and ideas for how to help you build your business with the mindset of creating value. Every chapter is a succession pitfall to avoid and ends with an action summary and tips on your next steps. There’s great content, stories, and case studies for companies that have had some challenges and successes along the way.

                                                                                                      Laurie also recommends checking out her website for other resources, including two assessments you can take. One is a business assessment to understand your business’s strengths, opportunities, or risks. And if you share your financial information, you’ll also get a valuation of your business. The other assessment is for personal transition readiness to help you understand the emotional side of things.

                                                                                                      No.1 goal for the next 12 months

                                                                                                      Laurie’s number one goal for the next 12 months is to help a million business owners with business transitions. She’d like to take her book and make a course.

                                                                                                      Parting words

                                                                                                       

                                                                                                      “Keep on working on your transition; you’ll always remember the value it brought you.”

                                                                                                      Laurie Barkman

                                                                                                       

                                                                                                      [spp-transcript]

                                                                                                       

                                                                                                      Connect with Laurie Barkman

                                                                                                      • LinkedIn
                                                                                                      • Facebook
                                                                                                      • Twitter
                                                                                                      • Instagram
                                                                                                      • YouTube
                                                                                                      • Website
                                                                                                      • Podcast
                                                                                                      • Book
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s books

                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • My Worst Investment Ever
                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s online programs

                                                                                                      • Valuation Master Class
                                                                                                      • The Become a Better Investor Community
                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • Finance Made Ridiculously Simple
                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                      • Achieve Your Goals
                                                                                                      
                                                                                                      

                                                                                                      Connect with Andrew Stotz:

                                                                                                      • astotz.com
                                                                                                      • LinkedIn
                                                                                                      • Facebook
                                                                                                      • Instagram
                                                                                                      • Threads
                                                                                                      • Twitter
                                                                                                      • YouTube
                                                                                                      • My Worst Investment Ever Podcast
                                                                                                      
                                                                                                      ]]>08315f5e-dc9a-4073-870d-e40ad55efcf0Thu, 07 Sep 2023 06:00:00 +070024:24falsefullMark Venables – Do Your Best to Secure Your CryptoBIO: Mark Venables, originally from the UK, is a serial entrepreneur and, among other companies, owns thecryptomerchant.com, offering the largest selection of crypto self-custody devices on the planet.

                                                                                                      STORY: Mark bought crypto in an exchange, but ironically, despite being surrounded by 1,000s of cold wallets, Mark didn’t take his crypto and put it in a cold wallet. The crypto company got into some financial difficulties and went down in a blaze. Mark’s crypto was frozen for about two years.

                                                                                                      LEARNING: You don’t need hundreds of thousands in crypto to get a cold wallet. Whether a veteran or newbie crypto trader/investor, habitually put your crypto into a cold wallet.

                                                                                                       

                                                                                                      “Do your best to secure your crypto. It’s so simple and inexpensive, and it could actually be fun with some of these devices.”

                                                                                                      Mark Venables

                                                                                                       

                                                                                                      Guest profile

                                                                                                      Mark Venables, originally from the UK, is a serial entrepreneur and, among other companies, owns thecryptomerchant.com, offering the largest selection of crypto self-custody devices on the planet. He is determined to get the word out about cold wallets and crypto security while encouraging people new to crypto to get involved and be secure. Use code DRSTOTZ at checkout to get 10% off your entire order on The Crypto Merchant.

                                                                                                      Worst investment ever

                                                                                                      Several years ago, Mark was excited about this company called Block Phi. It had a cool-looking crypto credit card that gave you rewards in crypto. Mark applied for one of those credit cards and would use it frequently.

                                                                                                      The company also had an exchange. Mark put money into crypto on that exchange. Ironically, despite being surrounded by thousands of cold wallets, Mark didn’t take his crypto and put it in a cold wallet. The crypto company got into some financial difficulties and went down in a blaze. Mark’s crypto was frozen for about two years because he didn’t protect it. He was finally able to withdraw his crypto a couple of days ago. But he was only allowed to withdraw what the crypto was worth back on the 21st of June 2020, not its current value.

                                                                                                      Lessons learned

                                                                                                      • You don’t need hundreds of thousands in crypto to get a cold wallet.
                                                                                                      • Whether a veteran or newbie crypto trader/investor, habitually put your crypto into a cold wallet.
                                                                                                      
                                                                                                      

                                                                                                      Actionable advice

                                                                                                      Do your best to secure your crypto. It’s so simple and inexpensive, and it could be fun with some of these devices.

                                                                                                      Mark’s recommendations

                                                                                                      Go to thecryptomerchant.com, poke around, and see what you like. If you have questions, contact the tech support or email Mark for prompt assistance. If you find something you want, use the code DRSTOTZ at checkout to get 10% off your entire order.

                                                                                                      No.1 goal for the next 12 months

                                                                                                      Mark hopes we’ll soon come out of this cycle of the crypto winter. So his number one goal for the next 12 months is to get some education together so that when people start wanting to get on board, they’ll find all the resources they need to learn what they need to know.

                                                                                                      Parting words

                                                                                                       

                                                                                                      “Use common sense, stay secure, and hold on for dear life.”

                                                                                                      Mark Venables

                                                                                                       

                                                                                                      [spp-transcript]

                                                                                                       

                                                                                                      Connect with Mark Venables

                                                                                                      • LinkedIn
                                                                                                      • Facebook
                                                                                                      • Website
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s books

                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • My Worst Investment Ever
                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s online programs

                                                                                                      • Valuation Master Class
                                                                                                      • The Become a Better Investor Community
                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • Finance Made Ridiculously Simple
                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                      • Achieve Your Goals
                                                                                                      
                                                                                                      

                                                                                                      Connect with Andrew Stotz:

                                                                                                      • astotz.com
                                                                                                      • LinkedIn
                                                                                                      • Facebook
                                                                                                      • Instagram
                                                                                                      • Threads
                                                                                                      • Twitter
                                                                                                      • YouTube
                                                                                                      • My Worst Investment Ever Podcast
                                                                                                      
                                                                                                      ]]>BIO: Mark Venables, originally from the UK, is a serial entrepreneur and, among other companies, owns thecryptomerchant.com, offering the largest selection of crypto self-custody devices on the planet.

                                                                                                      STORY: Mark bought crypto in an exchange, but ironically, despite being surrounded by 1,000s of cold wallets, Mark didn’t take his crypto and put it in a cold wallet. The crypto company got into some financial difficulties and went down in a blaze. Mark’s crypto was frozen for about two years.

                                                                                                      LEARNING: You don’t need hundreds of thousands in crypto to get a cold wallet. Whether a veteran or newbie crypto trader/investor, habitually put your crypto into a cold wallet.

                                                                                                       

                                                                                                      “Do your best to secure your crypto. It’s so simple and inexpensive, and it could actually be fun with some of these devices.”

                                                                                                      Mark Venables

                                                                                                       

                                                                                                      Guest profile

                                                                                                      Mark Venables, originally from the UK, is a serial entrepreneur and, among other companies, owns thecryptomerchant.com, offering the largest selection of crypto self-custody devices on the planet. He is determined to get the word out about cold wallets and crypto security while encouraging people new to crypto to get involved and be secure. Use code DRSTOTZ at checkout to get 10% off your entire order on The Crypto Merchant.

                                                                                                      Worst investment ever

                                                                                                      Several years ago, Mark was excited about this company called Block Phi. It had a cool-looking crypto credit card that gave you rewards in crypto. Mark applied for one of those credit cards and would use it frequently.

                                                                                                      The company also had an exchange. Mark put money into crypto on that exchange. Ironically, despite being surrounded by thousands of cold wallets, Mark didn’t take his crypto and put it in a cold wallet. The crypto company got into some financial difficulties and went down in a blaze. Mark’s crypto was frozen for about two years because he didn’t protect it. He was finally able to withdraw his crypto a couple of days ago. But he was only allowed to withdraw what the crypto was worth back on the 21st of June 2020, not its current value.

                                                                                                      Lessons learned

                                                                                                      • You don’t need hundreds of thousands in crypto to get a cold wallet.
                                                                                                      • Whether a veteran or newbie crypto trader/investor, habitually put your crypto into a cold wallet.
                                                                                                      
                                                                                                      

                                                                                                      Actionable advice

                                                                                                      Do your best to secure your crypto. It’s so simple and inexpensive, and it could be fun with some of these devices.

                                                                                                      Mark’s recommendations

                                                                                                      Go to thecryptomerchant.com, poke around, and see what you like. If you have questions, contact the tech support or email Mark for prompt assistance. If you find something you want, use the code DRSTOTZ at checkout to get 10% off your entire order.

                                                                                                      No.1 goal for the next 12 months

                                                                                                      Mark hopes we’ll soon come out of this cycle of the crypto winter. So his number one goal for the next 12 months is to get some education together so that when people start wanting to get on board, they’ll find all the resources they need to learn what they need to know.

                                                                                                      Parting words

                                                                                                       

                                                                                                      “Use common sense, stay secure, and hold on for dear life.”

                                                                                                      Mark Venables

                                                                                                       

                                                                                                      [spp-transcript]

                                                                                                       

                                                                                                      Connect with Mark Venables

                                                                                                      • LinkedIn
                                                                                                      • Facebook
                                                                                                      • Website
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s books

                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • My Worst Investment Ever
                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s online programs

                                                                                                      • Valuation Master Class
                                                                                                      • The Become a Better Investor Community
                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • Finance Made Ridiculously Simple
                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                      • Achieve Your Goals
                                                                                                      
                                                                                                      

                                                                                                      Connect with Andrew Stotz:

                                                                                                      • astotz.com
                                                                                                      • LinkedIn
                                                                                                      • Facebook
                                                                                                      • Instagram
                                                                                                      • Threads
                                                                                                      • Twitter
                                                                                                      • YouTube
                                                                                                      • My Worst Investment Ever Podcast
                                                                                                      
                                                                                                      ]]>08f3ab99-5937-42fc-9b17-75adc7ad3795Wed, 06 Sep 2023 06:00:00 +070020:02falsefullTania Reif – You Can Be Right and Lose MoneyBIO: Tania Reif is the Founder and CIO of Senda Digital Assets. Prior to her cryptocurrency focus, she built her investment pedigree at top macro hedge funds, including Soros Fund Management, Laurion Capital, Citadel, and Alphadyne Asset Management.

                                                                                                      STORY: Around the end of 2017, Talia believed the dollar would stay strong and rally. Unfortunately, it tanked in January 2018. It only started rallying three or four months later, but by that time, Talia had taken her chips off the table and didn’t profit from her view that played out a few months later.

                                                                                                      LEARNING: Reassess your investment model and make discretionary decisions to avoid getting into trouble. You can’t always be on top of everything in the financial world. Don’t fight the flow.

                                                                                                       

                                                                                                      “You actually can be right and lose money. This mostly happens when you’re, funnily enough, too early to a trade.”

                                                                                                      Tania Reif

                                                                                                       

                                                                                                      Guest profile

                                                                                                      Tania Reif is the Founder and CIO of Senda Digital Assets. Prior to her cryptocurrency focus, she built her investment pedigree at top macro hedge funds, including Soros Fund Management, Laurion Capital, Citadel, and Alphadyne Asset Management.

                                                                                                      She was profiled in the 50 Leading Women in Hedge Funds 2017 survey by The Hedge Fund Journal. Her career spans public policy beginnings at the International Monetary Fund and experience in the banking industry at Citgroup’s Economic and Market Analysis team.

                                                                                                      She holds a Ph.D. in Economics with Distinction from Columbia University, where she earned the Jagdish Bhagwati International Economics Award for her work in currency dynamics.

                                                                                                      Worst investment ever

                                                                                                      Tania had a perfect model for trade currencies that had worked for many years. Then, in 2016, 17 and 18, it started to wobble. Around that time, she had a bunch of episodes where she’d put a trade on exchange rates, and it just wouldn’t go her way, or it would take longer.

                                                                                                      Around the end of 2017, Talia believed the dollar would stay strong and rally. Unfortunately, it tanked in January 2018. It only started rallying three or four months later. By then, Talia had taken her chips off the table and didn’t profit from her model that ended up playing out a few months later.

                                                                                                      Lessons learned

                                                                                                      • Stay humble, and when things are not working, take a step back, reassess your investment model, and make discretionary decisions to avoid getting into trouble.
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s takeaways

                                                                                                      • You can’t always be on top of everything in the financial world.
                                                                                                      • Don’t fight the flow.
                                                                                                      
                                                                                                      

                                                                                                      Actionable advice

                                                                                                      Have a smaller size until you understand what’s happening. Be careful, and avoid the temptation to double down because you’re convinced you’re right.

                                                                                                      Tania’s recommendations

                                                                                                      Tania recommends following Michael Howell for fantastic research and data on liquidity. He also has a substack for young and non-institutional investors that you can subscribe to.

                                                                                                      No.1 goal for the next 12 months

                                                                                                      Tania launched a crypto fund in 2022, and her number one goal for the next 12 months is to get this young fund up and running into a more mature and established institution.

                                                                                                      Parting words

                                                                                                       

                                                                                                      “Please reach out if you’re interested in learning more about crypto. I think it’s the future, and I’m here to answer any questions you may have.”

                                                                                                      Tania Reif

                                                                                                       

                                                                                                      [spp-transcript]

                                                                                                       

                                                                                                      Connect with Tania Reif

                                                                                                      • LinkedIn
                                                                                                      • Twitter
                                                                                                      • Website
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s books

                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • My Worst Investment Ever
                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s online programs

                                                                                                      • Valuation Master Class
                                                                                                      • The Become a Better Investor Community
                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • Finance Made Ridiculously Simple
                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                      • Achieve Your Goals
                                                                                                      
                                                                                                      

                                                                                                      Connect with Andrew Stotz:

                                                                                                      • astotz.com
                                                                                                      • LinkedIn
                                                                                                      • Facebook
                                                                                                      • Instagram
                                                                                                      • Threads
                                                                                                      • Twitter
                                                                                                      • YouTube
                                                                                                      • My Worst Investment Ever Podcast
                                                                                                      
                                                                                                      ]]>BIO: Tania Reif is the Founder and CIO of Senda Digital Assets. Prior to her cryptocurrency focus, she built her investment pedigree at top macro hedge funds, including Soros Fund Management, Laurion Capital, Citadel, and Alphadyne Asset Management.

                                                                                                      STORY: Around the end of 2017, Talia believed the dollar would stay strong and rally. Unfortunately, it tanked in January 2018. It only started rallying three or four months later, but by that time, Talia had taken her chips off the table and didn’t profit from her view that played out a few months later.

                                                                                                      LEARNING: Reassess your investment model and make discretionary decisions to avoid getting into trouble. You can’t always be on top of everything in the financial world. Don’t fight the flow.

                                                                                                       

                                                                                                      “You actually can be right and lose money. This mostly happens when you’re, funnily enough, too early to a trade.”

                                                                                                      Tania Reif

                                                                                                       

                                                                                                      Guest profile

                                                                                                      Tania Reif is the Founder and CIO of Senda Digital Assets. Prior to her cryptocurrency focus, she built her investment pedigree at top macro hedge funds, including Soros Fund Management, Laurion Capital, Citadel, and Alphadyne Asset Management.

                                                                                                      She was profiled in the 50 Leading Women in Hedge Funds 2017 survey by The Hedge Fund Journal. Her career spans public policy beginnings at the International Monetary Fund and experience in the banking industry at Citgroup’s Economic and Market Analysis team.

                                                                                                      She holds a Ph.D. in Economics with Distinction from Columbia University, where she earned the Jagdish Bhagwati International Economics Award for her work in currency dynamics.

                                                                                                      Worst investment ever

                                                                                                      Tania had a perfect model for trade currencies that had worked for many years. Then, in 2016, 17 and 18, it started to wobble. Around that time, she had a bunch of episodes where she’d put a trade on exchange rates, and it just wouldn’t go her way, or it would take longer.

                                                                                                      Around the end of 2017, Talia believed the dollar would stay strong and rally. Unfortunately, it tanked in January 2018. It only started rallying three or four months later. By then, Talia had taken her chips off the table and didn’t profit from her model that ended up playing out a few months later.

                                                                                                      Lessons learned

                                                                                                      • Stay humble, and when things are not working, take a step back, reassess your investment model, and make discretionary decisions to avoid getting into trouble.
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s takeaways

                                                                                                      • You can’t always be on top of everything in the financial world.
                                                                                                      • Don’t fight the flow.
                                                                                                      
                                                                                                      

                                                                                                      Actionable advice

                                                                                                      Have a smaller size until you understand what’s happening. Be careful, and avoid the temptation to double down because you’re convinced you’re right.

                                                                                                      Tania’s recommendations

                                                                                                      Tania recommends following Michael Howell for fantastic research and data on liquidity. He also has a substack for young and non-institutional investors that you can subscribe to.

                                                                                                      No.1 goal for the next 12 months

                                                                                                      Tania launched a crypto fund in 2022, and her number one goal for the next 12 months is to get this young fund up and running into a more mature and established institution.

                                                                                                      Parting words

                                                                                                       

                                                                                                      “Please reach out if you’re interested in learning more about crypto. I think it’s the future, and I’m here to answer any questions you may have.”

                                                                                                      Tania Reif

                                                                                                       

                                                                                                      [spp-transcript]

                                                                                                       

                                                                                                      Connect with Tania Reif

                                                                                                      • LinkedIn
                                                                                                      • Twitter
                                                                                                      • Website
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s books

                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • My Worst Investment Ever
                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s online programs

                                                                                                      • Valuation Master Class
                                                                                                      • The Become a Better Investor Community
                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • Finance Made Ridiculously Simple
                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                      • Achieve Your Goals
                                                                                                      
                                                                                                      

                                                                                                      Connect with Andrew Stotz:

                                                                                                      • astotz.com
                                                                                                      • LinkedIn
                                                                                                      • Facebook
                                                                                                      • Instagram
                                                                                                      • Threads
                                                                                                      • Twitter
                                                                                                      • YouTube
                                                                                                      • My Worst Investment Ever Podcast
                                                                                                      
                                                                                                      ]]>acab6ac8-d8ce-40ff-a626-2c1cd78340d9Mon, 04 Sep 2023 06:00:00 +070033:57falsefullMark Neuman – Constrained Capital and ESG OrphansBIO: Mark Neuman is the CIO and founder of Constraint Capital. He is a CFA charterholder and creator of the ESG orphans index.

                                                                                                      STORY: Mark talks about constrained capital, ESG orphans, and his work around it.

                                                                                                      LEARNING: We can’t get to the future of energy without present energy. To win the renewable energy fight, we must put facts above feelings.

                                                                                                       

                                                                                                      “We can’t get to the future of energy without present energy.”

                                                                                                      Mark Neuman

                                                                                                       

                                                                                                      Guest profile

                                                                                                      Mark Neuman is the CIO and founder of Constraint Capital. He is a CFA charter holder and creator of the ESG orphans index. He’s a 30-year Wall Street veteran and former global equity derivatives trader with Merrill Lynch, Susquehanna, Jones Trading, and Bay Crest partners. He’s a former event-driven hedge fund partner. In his recent investment project, he spent 1,000 hours of deep dive into all things ESG over the past six years. His goal is to deliver truth in ESG to protect and help investors make informed decisions with measurable results when understanding risk and reward.

                                                                                                      In today’s episode, Mark talks about constrained capital, ESG orphans, and the work he is doing around it.

                                                                                                      Constraints on capital

                                                                                                      According to Mark, constraints on capital is a pattern that exists in the market based on policy, investment themes, and philosophies. Most recently, ESG (Environmental, Social, Governance) has been the most prominent example of constraints on capital. Constraints on capital cause misallocation and malinvestment. In general, they are starving specific industries and flooding others.

                                                                                                      For example, in ESG, constraints were heavily implemented on fossil fuels, nuclear energy, weapons, alcohol, tobacco, and gambling. Basically, ESG said those were bad. On the other side, they chose certain winners that were apparently good in ESG, leading to the misallocation of capital because, though these winners are considered great, they still have a considerable carbon footprint.

                                                                                                      Ultimately, the constraints push capital to one place and starve capital to another. The ESG orphans are the six sectors, fossil fuel, nuclear energy, weapons, alcohol, tobacco, and gambling, that were routinely excluded. As they’re being cut off from capital, the value of their stocks falls.

                                                                                                      Looming reversal flows for ESG orphans

                                                                                                      In the last decade up through 2021, the Info-Tech space in the S&P 500 grew from 18% weighting to 36%. On the other hand, the energy sector shrunk from about 10% to 2.5% and became so cheap within the same decade. Mark indicates that we’ll see a reversion over a more extended period. As ESG gets called out, we’ll see reversal flows that will return to those excluded names.

                                                                                                      Put facts above feelings

                                                                                                      Mark insists he’s not anti-ESG; he’s simply anti the ESG bubble as an investor and a CFA charterholder. He says there’s significant value in many of these companies that have been discarded. We simply need a different energy plan. While Mark agrees we need to find a replacement for fossil energy, he believes that we can’t get to the future of energy without present energy.

                                                                                                      Therefore, it makes no sense to starve Exxon Mobil, for example, instead of leaning on it to lead the renewable energy change. Mark thinks people putting feelings above facts on some level is a troubling aspect of ESG.

                                                                                                      Mark has been doing a lot of ESG consulting, working with companies to help them understand the risks. If certain companies have been classified by ESG as medium risk or low risk, Mark wants to kick the tires and turn it over. He’s helping companies do their own due diligence and dig into what their ESG analysis really means. Mark’s passion is ensuring people understand risk and reward and are not misled by ESG, saying, “Everybody wins, nobody loses, it’s costless, and we’re all benefiting.” That sounds too good to be true for him.

                                                                                                       

                                                                                                      [spp-transcript]

                                                                                                       

                                                                                                      Connect with Mark Neuman

                                                                                                      • LinkedIn
                                                                                                      • Twitter
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s books

                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • My Worst Investment Ever
                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s online programs

                                                                                                      • Valuation Master Class
                                                                                                      • The Become a Better Investor Community
                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • Finance Made Ridiculously Simple
                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                      • Achieve Your Goals
                                                                                                      
                                                                                                      

                                                                                                      Connect with Andrew Stotz:

                                                                                                      • astotz.com
                                                                                                      • LinkedIn
                                                                                                      • Facebook
                                                                                                      • Instagram
                                                                                                      • Threads
                                                                                                      • Twitter
                                                                                                      • YouTube
                                                                                                      • My Worst Investment Ever Podcast
                                                                                                      
                                                                                                      ]]>BIO: Mark Neuman is the CIO and founder of Constraint Capital. He is a CFA charterholder and creator of the ESG orphans index.

                                                                                                      STORY: Mark talks about constrained capital, ESG orphans, and his work around it.

                                                                                                      LEARNING: We can’t get to the future of energy without present energy. To win the renewable energy fight, we must put facts above feelings.

                                                                                                       

                                                                                                      “We can’t get to the future of energy without present energy.”

                                                                                                      Mark Neuman

                                                                                                       

                                                                                                      Guest profile

                                                                                                      Mark Neuman is the CIO and founder of Constraint Capital. He is a CFA charter holder and creator of the ESG orphans index. He’s a 30-year Wall Street veteran and former global equity derivatives trader with Merrill Lynch, Susquehanna, Jones Trading, and Bay Crest partners. He’s a former event-driven hedge fund partner. In his recent investment project, he spent 1,000 hours of deep dive into all things ESG over the past six years. His goal is to deliver truth in ESG to protect and help investors make informed decisions with measurable results when understanding risk and reward.

                                                                                                      In today’s episode, Mark talks about constrained capital, ESG orphans, and the work he is doing around it.

                                                                                                      Constraints on capital

                                                                                                      According to Mark, constraints on capital is a pattern that exists in the market based on policy, investment themes, and philosophies. Most recently, ESG (Environmental, Social, Governance) has been the most prominent example of constraints on capital. Constraints on capital cause misallocation and malinvestment. In general, they are starving specific industries and flooding others.

                                                                                                      For example, in ESG, constraints were heavily implemented on fossil fuels, nuclear energy, weapons, alcohol, tobacco, and gambling. Basically, ESG said those were bad. On the other side, they chose certain winners that were apparently good in ESG, leading to the misallocation of capital because, though these winners are considered great, they still have a considerable carbon footprint.

                                                                                                      Ultimately, the constraints push capital to one place and starve capital to another. The ESG orphans are the six sectors, fossil fuel, nuclear energy, weapons, alcohol, tobacco, and gambling, that were routinely excluded. As they’re being cut off from capital, the value of their stocks falls.

                                                                                                      Looming reversal flows for ESG orphans

                                                                                                      In the last decade up through 2021, the Info-Tech space in the S&P 500 grew from 18% weighting to 36%. On the other hand, the energy sector shrunk from about 10% to 2.5% and became so cheap within the same decade. Mark indicates that we’ll see a reversion over a more extended period. As ESG gets called out, we’ll see reversal flows that will return to those excluded names.

                                                                                                      Put facts above feelings

                                                                                                      Mark insists he’s not anti-ESG; he’s simply anti the ESG bubble as an investor and a CFA charterholder. He says there’s significant value in many of these companies that have been discarded. We simply need a different energy plan. While Mark agrees we need to find a replacement for fossil energy, he believes that we can’t get to the future of energy without present energy.

                                                                                                      Therefore, it makes no sense to starve Exxon Mobil, for example, instead of leaning on it to lead the renewable energy change. Mark thinks people putting feelings above facts on some level is a troubling aspect of ESG.

                                                                                                      Mark has been doing a lot of ESG consulting, working with companies to help them understand the risks. If certain companies have been classified by ESG as medium risk or low risk, Mark wants to kick the tires and turn it over. He’s helping companies do their own due diligence and dig into what their ESG analysis really means. Mark’s passion is ensuring people understand risk and reward and are not misled by ESG, saying, “Everybody wins, nobody loses, it’s costless, and we’re all benefiting.” That sounds too good to be true for him.

                                                                                                       

                                                                                                      [spp-transcript]

                                                                                                       

                                                                                                      Connect with Mark Neuman

                                                                                                      • LinkedIn
                                                                                                      • Twitter
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s books

                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • My Worst Investment Ever
                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s online programs

                                                                                                      • Valuation Master Class
                                                                                                      • The Become a Better Investor Community
                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • Finance Made Ridiculously Simple
                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                      • Achieve Your Goals
                                                                                                      
                                                                                                      

                                                                                                      Connect with Andrew Stotz:

                                                                                                      • astotz.com
                                                                                                      • LinkedIn
                                                                                                      • Facebook
                                                                                                      • Instagram
                                                                                                      • Threads
                                                                                                      • Twitter
                                                                                                      • YouTube
                                                                                                      • My Worst Investment Ever Podcast
                                                                                                      
                                                                                                      ]]>0f7dac8b-e2c4-4392-85c7-b56631a52dffThu, 31 Aug 2023 06:00:00 +070034:55falsefullRyan Dusick – Invest Yourself in Something That’s MeaningfulBIO: Ryan Dusick is an associate marriage and family therapist, life coach, mental health advocate, and the founding drummer of the world’s most popular band, Maroon 5.

                                                                                                      STORY: Ryan’s worst investment ever was spending a decade of his time, energy, and focus believing that he had control over his life. Simply playing God with the reality of his existence.

                                                                                                      LEARNING: Happiness comes from connection and purpose. Investing yourself in something meaningful to you establishes purpose.

                                                                                                       

                                                                                                      “If you want to achieve certain things in your life, you must put yourself out there and be prepared for setbacks, disappointments, and failures.”

                                                                                                      Ryan Dusick

                                                                                                       

                                                                                                      Guest profile

                                                                                                      Ryan Dusick is an associate marriage and family therapist, life coach, mental health advocate, and the founding drummer of the world’s most popular band, Maroon 5.

                                                                                                      He is also a columnist for Variety Magazine and the author of the new book “Harder to Breathe: A Memoir of Making Maroon 5, Losing It All, and Finding Recovery.”

                                                                                                      His life has been a long and winding road from an aspiring pop star with anxiety to a heartbroken alcoholic to a thriving mental health survivor and messenger of hope in recovery.

                                                                                                      Worst investment ever

                                                                                                      The worst investment Ryan ever made was investing a decade of his time, energy, and focus into an illusion. The illusion was that he had control over his life, simply playing God with the reality of his existence. There were moments in that decade that were pleasant, enjoyable, and fun for Ryan.

                                                                                                      Maintaining the lie that Ryan had control of his life and that he could escape the feelings that were so painful was an exercise in futility. Life just got worse over time. His coping skills deteriorated. Ryan had invested in a way of life that was harming him and not benefiting him in any way other than maybe a moment of pleasure from time to time.

                                                                                                      Lessons learned

                                                                                                      • Happiness comes from feeling connection and purpose.
                                                                                                      • Meaning and purpose are not necessarily handed to you by God or the universe. You can create them for yourself.
                                                                                                      • Use your mindset to find ways to grow and find new connections and a new purpose.
                                                                                                      • Investing yourself in something meaningful to you establishes purpose.
                                                                                                      
                                                                                                      

                                                                                                      Actionable advice

                                                                                                      If you want to achieve certain things in your life, to a certain extent, you have to put yourself out there and be prepared that there may be setbacks, disappointments, and failures. That’s part of the process, ultimately, of getting to where you want to be. Those setbacks, disappointments, and failures don’t make you a failure or mean it’s the end of the road. It’s part of the process of pursuing something valuable to you.

                                                                                                      No.1 goal for the next 12 months

                                                                                                      Ryan’s number one goal for the next 12 months is to be more of a professional speaker, step it up to the next level, and share some of the things he’s learned on a bigger scale. He also wants to continue to write more.

                                                                                                      Parting words

                                                                                                       

                                                                                                      “Good luck to you on your journey. If it’s been a while for you, it’s still coming. Just be open to it.”

                                                                                                      Ryan Dusick

                                                                                                       

                                                                                                      [spp-transcript]

                                                                                                       

                                                                                                      Connect with Ryan Dusick

                                                                                                      • LinkedIn
                                                                                                      • Twitter
                                                                                                      • Facebook
                                                                                                      • Instagram
                                                                                                      • Website
                                                                                                      • Book
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s books

                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • My Worst Investment Ever
                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s online programs

                                                                                                      • Valuation Master Class
                                                                                                      • The Become a Better Investor Community
                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • Finance Made Ridiculously Simple
                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                      • Achieve Your Goals
                                                                                                      
                                                                                                      

                                                                                                      Connect with Andrew Stotz:

                                                                                                      • astotz.com
                                                                                                      • LinkedIn
                                                                                                      • Facebook
                                                                                                      • Instagram
                                                                                                      • Threads
                                                                                                      • Twitter
                                                                                                      • YouTube
                                                                                                      • My Worst Investment Ever Podcast
                                                                                                      
                                                                                                      

                                                                                                      Further reading mentioned

                                                                                                      • Eckhart Tolle, The Power of Now: A Guide to Spiritual Enlightenment
                                                                                                      
                                                                                                      ]]>BIO: Ryan Dusick is an associate marriage and family therapist, life coach, mental health advocate, and the founding drummer of the world’s most popular band, Maroon 5.

                                                                                                      STORY: Ryan’s worst investment ever was spending a decade of his time, energy, and focus believing that he had control over his life. Simply playing God with the reality of his existence.

                                                                                                      LEARNING: Happiness comes from connection and purpose. Investing yourself in something meaningful to you establishes purpose.

                                                                                                       

                                                                                                      “If you want to achieve certain things in your life, you must put yourself out there and be prepared for setbacks, disappointments, and failures.”

                                                                                                      Ryan Dusick

                                                                                                       

                                                                                                      Guest profile

                                                                                                      Ryan Dusick is an associate marriage and family therapist, life coach, mental health advocate, and the founding drummer of the world’s most popular band, Maroon 5.

                                                                                                      He is also a columnist for Variety Magazine and the author of the new book “Harder to Breathe: A Memoir of Making Maroon 5, Losing It All, and Finding Recovery.”

                                                                                                      His life has been a long and winding road from an aspiring pop star with anxiety to a heartbroken alcoholic to a thriving mental health survivor and messenger of hope in recovery.

                                                                                                      Worst investment ever

                                                                                                      The worst investment Ryan ever made was investing a decade of his time, energy, and focus into an illusion. The illusion was that he had control over his life, simply playing God with the reality of his existence. There were moments in that decade that were pleasant, enjoyable, and fun for Ryan.

                                                                                                      Maintaining the lie that Ryan had control of his life and that he could escape the feelings that were so painful was an exercise in futility. Life just got worse over time. His coping skills deteriorated. Ryan had invested in a way of life that was harming him and not benefiting him in any way other than maybe a moment of pleasure from time to time.

                                                                                                      Lessons learned

                                                                                                      • Happiness comes from feeling connection and purpose.
                                                                                                      • Meaning and purpose are not necessarily handed to you by God or the universe. You can create them for yourself.
                                                                                                      • Use your mindset to find ways to grow and find new connections and a new purpose.
                                                                                                      • Investing yourself in something meaningful to you establishes purpose.
                                                                                                      
                                                                                                      

                                                                                                      Actionable advice

                                                                                                      If you want to achieve certain things in your life, to a certain extent, you have to put yourself out there and be prepared that there may be setbacks, disappointments, and failures. That’s part of the process, ultimately, of getting to where you want to be. Those setbacks, disappointments, and failures don’t make you a failure or mean it’s the end of the road. It’s part of the process of pursuing something valuable to you.

                                                                                                      No.1 goal for the next 12 months

                                                                                                      Ryan’s number one goal for the next 12 months is to be more of a professional speaker, step it up to the next level, and share some of the things he’s learned on a bigger scale. He also wants to continue to write more.

                                                                                                      Parting words

                                                                                                       

                                                                                                      “Good luck to you on your journey. If it’s been a while for you, it’s still coming. Just be open to it.”

                                                                                                      Ryan Dusick

                                                                                                       

                                                                                                      [spp-transcript]

                                                                                                       

                                                                                                      Connect with Ryan Dusick

                                                                                                      • LinkedIn
                                                                                                      • Twitter
                                                                                                      • Facebook
                                                                                                      • Instagram
                                                                                                      • Website
                                                                                                      • Book
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s books

                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • My Worst Investment Ever
                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s online programs

                                                                                                      • Valuation Master Class
                                                                                                      • The Become a Better Investor Community
                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • Finance Made Ridiculously Simple
                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                      • Achieve Your Goals
                                                                                                      
                                                                                                      

                                                                                                      Connect with Andrew Stotz:

                                                                                                      • astotz.com
                                                                                                      • LinkedIn
                                                                                                      • Facebook
                                                                                                      • Instagram
                                                                                                      • Threads
                                                                                                      • Twitter
                                                                                                      • YouTube
                                                                                                      • My Worst Investment Ever Podcast
                                                                                                      
                                                                                                      

                                                                                                      Further reading mentioned

                                                                                                      • Eckhart Tolle, The Power of Now: A Guide to Spiritual Enlightenment
                                                                                                      
                                                                                                      ]]>7b4c1fcb-f682-4e2e-b76f-95e8f5baef25Wed, 30 Aug 2023 06:00:00 +070036:26falsefullThomas Chua – Have a Proper Sell Thesis When InvestingBIO: Thomas Chua is the founder of SteadyCompounding.com, where he writes about business breakdowns, investment concepts, and timeless lessons from super investors.

                                                                                                      STORY: Thomas invested in a company that had a gaming and e-commerce business. The gaming business was his main attraction, but over time, it started faltering. Unfortunately, Thomas held on until the stock went too low.

                                                                                                      LEARNING: Have a proper sell thesis when it comes to investing, especially for smaller companies. Always write down why you should buy certain companies and what will cause you to sell them. When investing in small to mid-companies, ensure you’re adequately diversified.

                                                                                                       

                                                                                                      “Start writing down what would cause you to sell the company to assess the risks and also to prepare yourself for the future.”

                                                                                                      Thomas Chua

                                                                                                       

                                                                                                      Guest profile

                                                                                                      Thomas Chua is the founder of SteadyCompounding.com, where he writes about business breakdowns, investment concepts, and timeless lessons from super investors.

                                                                                                      Steady Compounding provides investing insights and business breakdowns every week to thousands of readers. You can sign up here for free.

                                                                                                      Worst investment ever

                                                                                                      Thomas started initiating a position in a company back in 2019. The company, Sea Limited, had two business arms, gaming and E-commerce. When Thomas first bought a position in this company, its market cap was about $14 billion. The gaming business, Garena, had a revenue figure of about 1.1 billion, and its operating income was 530 million, so the operating margins were high at about 50%. The company was growing at a 100% rate. The E-commerce business, Shopee, was also growing quickly but was unprofitable.

                                                                                                      Thomas was attracted to the company’s stock due to Garena’s success. It had a decent valuation compared with what other gaming companies were trading at.

                                                                                                      When COVID-19 hit, the stock took off. Everybody on Twitter was crazy about this company. Thomas got absorbed into the whole narrative that Sea Limited had become invincible. Like anything they touched, they turned into pure gold.

                                                                                                      The thesis behind Sea Limited was that Garena would finance Shopee until it became the most dominant player in whichever market it entered. Shopee’s management got a bit hot-headed back then. They started to go everywhere, and it was doing well in revenue.

                                                                                                      The problem with this thesis was that Garena started to falter. Much of its growth came from developing countries like Indonesia and India. At some point, India banned Garena’s Free Fire game. Also, as COVID-19 started to ease, the number of users on Garena began to reduce. The stock took a tumble. When Thomas first bought the company, the stock was over $30. Then it went all the way up to over $300. Now it went down to below $30.

                                                                                                      Lessons learned

                                                                                                      • Have a proper sell thesis when it comes to investing, especially for smaller companies.
                                                                                                      • Before investing, always write down why you should buy certain companies and what will cause you to sell them.
                                                                                                      • When investing in small to mid-companies, ensure you’re adequately diversified.
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s takeaways

                                                                                                      • Be careful about just trying to build up a portfolio of small or medium-sized companies that you believe will be the next big thing because outcomes can be highly variable.
                                                                                                      • When you feel that you need to sell, sell 10% first.
                                                                                                      
                                                                                                      

                                                                                                      Actionable advice

                                                                                                      Start writing down why you buy and conduct a premortem to help you decide when to sell.

                                                                                                      Thomas’ recommendations

                                                                                                      If you want to read about investing concepts in general and learn more about Thomas’ mistakes and lessons, check out his website.

                                                                                                      No.1 goal for the next 12 months

                                                                                                      Thomas’s number one goal for the next 12 months is to reach out to more people with a lot of sound investing principles.

                                                                                                      Parting words

                                                                                                       

                                                                                                      “Always keep investing in knowledge, learning, and understanding what you own. Do your due diligence because you can’t do well in the stock market on conviction. Learn how to value companies and don’t let short-term market movement affect your long-term investment goals.”

                                                                                                      Thomas Chua

                                                                                                       

                                                                                                       

                                                                                                      [spp-transcript]

                                                                                                       

                                                                                                      Connect with Thomas Chua

                                                                                                      • LinkedIn
                                                                                                      • Twitter
                                                                                                      • Website
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s books

                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • My Worst Investment Ever
                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s online programs

                                                                                                      • Valuation Master Class
                                                                                                      • The Become a Better Investor Community
                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • Finance Made Ridiculously Simple
                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                      • Achieve Your Goals
                                                                                                      
                                                                                                      

                                                                                                      Connect with Andrew Stotz:

                                                                                                      • astotz.com
                                                                                                      • LinkedIn
                                                                                                      • Facebook
                                                                                                      • Instagram
                                                                                                      • Threads
                                                                                                      • Twitter
                                                                                                      • YouTube
                                                                                                      • My Worst Investment Ever Podcast
                                                                                                      
                                                                                                      ]]>BIO: Thomas Chua is the founder of SteadyCompounding.com, where he writes about business breakdowns, investment concepts, and timeless lessons from super investors.

                                                                                                      STORY: Thomas invested in a company that had a gaming and e-commerce business. The gaming business was his main attraction, but over time, it started faltering. Unfortunately, Thomas held on until the stock went too low.

                                                                                                      LEARNING: Have a proper sell thesis when it comes to investing, especially for smaller companies. Always write down why you should buy certain companies and what will cause you to sell them. When investing in small to mid-companies, ensure you’re adequately diversified.

                                                                                                       

                                                                                                      “Start writing down what would cause you to sell the company to assess the risks and also to prepare yourself for the future.”

                                                                                                      Thomas Chua

                                                                                                       

                                                                                                      Guest profile

                                                                                                      Thomas Chua is the founder of SteadyCompounding.com, where he writes about business breakdowns, investment concepts, and timeless lessons from super investors.

                                                                                                      Steady Compounding provides investing insights and business breakdowns every week to thousands of readers. You can sign up here for free.

                                                                                                      Worst investment ever

                                                                                                      Thomas started initiating a position in a company back in 2019. The company, Sea Limited, had two business arms, gaming and E-commerce. When Thomas first bought a position in this company, its market cap was about $14 billion. The gaming business, Garena, had a revenue figure of about 1.1 billion, and its operating income was 530 million, so the operating margins were high at about 50%. The company was growing at a 100% rate. The E-commerce business, Shopee, was also growing quickly but was unprofitable.

                                                                                                      Thomas was attracted to the company’s stock due to Garena’s success. It had a decent valuation compared with what other gaming companies were trading at.

                                                                                                      When COVID-19 hit, the stock took off. Everybody on Twitter was crazy about this company. Thomas got absorbed into the whole narrative that Sea Limited had become invincible. Like anything they touched, they turned into pure gold.

                                                                                                      The thesis behind Sea Limited was that Garena would finance Shopee until it became the most dominant player in whichever market it entered. Shopee’s management got a bit hot-headed back then. They started to go everywhere, and it was doing well in revenue.

                                                                                                      The problem with this thesis was that Garena started to falter. Much of its growth came from developing countries like Indonesia and India. At some point, India banned Garena’s Free Fire game. Also, as COVID-19 started to ease, the number of users on Garena began to reduce. The stock took a tumble. When Thomas first bought the company, the stock was over $30. Then it went all the way up to over $300. Now it went down to below $30.

                                                                                                      Lessons learned

                                                                                                      • Have a proper sell thesis when it comes to investing, especially for smaller companies.
                                                                                                      • Before investing, always write down why you should buy certain companies and what will cause you to sell them.
                                                                                                      • When investing in small to mid-companies, ensure you’re adequately diversified.
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s takeaways

                                                                                                      • Be careful about just trying to build up a portfolio of small or medium-sized companies that you believe will be the next big thing because outcomes can be highly variable.
                                                                                                      • When you feel that you need to sell, sell 10% first.
                                                                                                      
                                                                                                      

                                                                                                      Actionable advice

                                                                                                      Start writing down why you buy and conduct a premortem to help you decide when to sell.

                                                                                                      Thomas’ recommendations

                                                                                                      If you want to read about investing concepts in general and learn more about Thomas’ mistakes and lessons, check out his website.

                                                                                                      No.1 goal for the next 12 months

                                                                                                      Thomas’s number one goal for the next 12 months is to reach out to more people with a lot of sound investing principles.

                                                                                                      Parting words

                                                                                                       

                                                                                                      “Always keep investing in knowledge, learning, and understanding what you own. Do your due diligence because you can’t do well in the stock market on conviction. Learn how to value companies and don’t let short-term market movement affect your long-term investment goals.”

                                                                                                      Thomas Chua

                                                                                                       

                                                                                                       

                                                                                                      [spp-transcript]

                                                                                                       

                                                                                                      Connect with Thomas Chua

                                                                                                      • LinkedIn
                                                                                                      • Twitter
                                                                                                      • Website
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s books

                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • My Worst Investment Ever
                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s online programs

                                                                                                      • Valuation Master Class
                                                                                                      • The Become a Better Investor Community
                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • Finance Made Ridiculously Simple
                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                      • Achieve Your Goals
                                                                                                      
                                                                                                      

                                                                                                      Connect with Andrew Stotz:

                                                                                                      • astotz.com
                                                                                                      • LinkedIn
                                                                                                      • Facebook
                                                                                                      • Instagram
                                                                                                      • Threads
                                                                                                      • Twitter
                                                                                                      • YouTube
                                                                                                      • My Worst Investment Ever Podcast
                                                                                                      
                                                                                                      ]]>53864864-a2ff-4094-8a44-2973e6b2d0b4Mon, 28 Aug 2023 06:00:00 +070024:38falsefullKat Merchant – Do It TodayBIO: Kat Merchant is a Rugby World Cup Champion turned Lifestyle, Nutrition & Fitness Coach. Her mission is to show you how your weight-loss journey and making positive lifestyle and nutrition changes can catalyze improvement in EVERY aspect of your life.

                                                                                                      STORY: Kat had to retire early from her successful rugby career. A few years after that, she went through an awful breakup. At the same time, the world went into a lockdown because of COVID-19. She decided to spend all her energy trying to get back control of her life. So, she overtrained. The more she worked out, the more she felt empty inside, even though her outside was transforming.

                                                                                                      LEARNING: You can’t help people if you’re not in a good place. Be careful and choose how you spend your energy. People don’t care about you nearly as much as you think they do.

                                                                                                       

                                                                                                      “You cannot help people if you’re not in a good place yourself.”

                                                                                                      Kat Merchant

                                                                                                       

                                                                                                      Guest profile

                                                                                                      Kat Merchant is a Rugby World Cup Champion turned Lifestyle, Nutrition & Fitness Coach. Her mission is to show you how your weight-loss journey and making positive lifestyle and nutrition lifestyle changes can be the catalyst for improvement in EVERY aspect of your life.

                                                                                                      From boosting your career performance to enhancing your personal relationships and mental well-being, turning sweat into success is what she lives for.

                                                                                                      Through her bespoke coaching program, Elite-14, she provides tailored strategies, support, and accountability to help you achieve your health and wellness goals and, ultimately, lead a happier and more balanced life.

                                                                                                      Worst investment ever

                                                                                                      Kat had her very successful rugby career cut short due to too many concussions. She was just 28 years old at the time. A few years after that, she went through an awful breakup. At the same time, the world went into a lockdown because of COVID-19.

                                                                                                      Kat didn’t know who she was anymore because she didn’t have rugby. She’d completely lost her confidence. Kat spent all her energy trying to regain control of her life. She wanted to look feminine and feel confident. So Kat overtrained and did exercises she didn’t like. For instance, Kat loved lifting, but because she was trying to get rid of her muscles, she did loads and loads of cardio. Kat got obsessed and weighed herself every day. The more she worked out, the more she felt empty inside, even though her outside was transforming.

                                                                                                      Lessons learned

                                                                                                      • You can’t help people if you’re not in a good place.
                                                                                                      • Be careful and choose how you spend your energy.
                                                                                                      • Do things that are right for you.
                                                                                                      • You don’t have to change yourself for anyone else. Change yourself for you if you want to.
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s takeaways

                                                                                                      • Your whole life’s mission should be to become more you.
                                                                                                      • People don’t care about you nearly as much as you think they do.
                                                                                                      
                                                                                                      

                                                                                                      Actionable advice

                                                                                                      If something’s an issue and you can change it, do it now before it becomes too late or before you go through rock bottom pain. Just change it.

                                                                                                      Kat’s recommendations

                                                                                                      Check Kat out on social media, where she shares valuable tips on how to lose fat, build muscle, stay motivated, and set yourself up for success. If you want to make that change and need support and accountability, drop Kat a message, and she’ll talk to you about her one-on-one program,

                                                                                                      No.1 goal for the next 12 months

                                                                                                      Kat’s number one goal for the next 12 months is to keep getting fitter, stronger, and confident. Business-wise, Kat wants to keep getting amazing clients and helping as many people as possible to smash it.

                                                                                                      Parting words

                                                                                                       

                                                                                                      “Do it today.”

                                                                                                      Kat Merchant

                                                                                                       

                                                                                                      [spp-transcript]

                                                                                                       

                                                                                                      Connect with Kat Merchant

                                                                                                      • LinkedIn
                                                                                                      • Website
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s books

                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • My Worst Investment Ever
                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s online programs

                                                                                                      • Valuation Master Class
                                                                                                      • The Become a Better Investor Community
                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • Finance Made Ridiculously Simple
                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                      • Achieve Your Goals
                                                                                                      
                                                                                                      

                                                                                                      Connect with Andrew Stotz:

                                                                                                      • astotz.com
                                                                                                      • LinkedIn
                                                                                                      • Facebook
                                                                                                      • Instagram
                                                                                                      • Threads
                                                                                                      • Twitter
                                                                                                      • YouTube
                                                                                                      • My Worst Investment Ever Podcast
                                                                                                      
                                                                                                      ]]>BIO: Kat Merchant is a Rugby World Cup Champion turned Lifestyle, Nutrition & Fitness Coach. Her mission is to show you how your weight-loss journey and making positive lifestyle and nutrition changes can catalyze improvement in EVERY aspect of your life.

                                                                                                      STORY: Kat had to retire early from her successful rugby career. A few years after that, she went through an awful breakup. At the same time, the world went into a lockdown because of COVID-19. She decided to spend all her energy trying to get back control of her life. So, she overtrained. The more she worked out, the more she felt empty inside, even though her outside was transforming.

                                                                                                      LEARNING: You can’t help people if you’re not in a good place. Be careful and choose how you spend your energy. People don’t care about you nearly as much as you think they do.

                                                                                                       

                                                                                                      “You cannot help people if you’re not in a good place yourself.”

                                                                                                      Kat Merchant

                                                                                                       

                                                                                                      Guest profile

                                                                                                      Kat Merchant is a Rugby World Cup Champion turned Lifestyle, Nutrition & Fitness Coach. Her mission is to show you how your weight-loss journey and making positive lifestyle and nutrition lifestyle changes can be the catalyst for improvement in EVERY aspect of your life.

                                                                                                      From boosting your career performance to enhancing your personal relationships and mental well-being, turning sweat into success is what she lives for.

                                                                                                      Through her bespoke coaching program, Elite-14, she provides tailored strategies, support, and accountability to help you achieve your health and wellness goals and, ultimately, lead a happier and more balanced life.

                                                                                                      Worst investment ever

                                                                                                      Kat had her very successful rugby career cut short due to too many concussions. She was just 28 years old at the time. A few years after that, she went through an awful breakup. At the same time, the world went into a lockdown because of COVID-19.

                                                                                                      Kat didn’t know who she was anymore because she didn’t have rugby. She’d completely lost her confidence. Kat spent all her energy trying to regain control of her life. She wanted to look feminine and feel confident. So Kat overtrained and did exercises she didn’t like. For instance, Kat loved lifting, but because she was trying to get rid of her muscles, she did loads and loads of cardio. Kat got obsessed and weighed herself every day. The more she worked out, the more she felt empty inside, even though her outside was transforming.

                                                                                                      Lessons learned

                                                                                                      • You can’t help people if you’re not in a good place.
                                                                                                      • Be careful and choose how you spend your energy.
                                                                                                      • Do things that are right for you.
                                                                                                      • You don’t have to change yourself for anyone else. Change yourself for you if you want to.
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s takeaways

                                                                                                      • Your whole life’s mission should be to become more you.
                                                                                                      • People don’t care about you nearly as much as you think they do.
                                                                                                      
                                                                                                      

                                                                                                      Actionable advice

                                                                                                      If something’s an issue and you can change it, do it now before it becomes too late or before you go through rock bottom pain. Just change it.

                                                                                                      Kat’s recommendations

                                                                                                      Check Kat out on social media, where she shares valuable tips on how to lose fat, build muscle, stay motivated, and set yourself up for success. If you want to make that change and need support and accountability, drop Kat a message, and she’ll talk to you about her one-on-one program,

                                                                                                      No.1 goal for the next 12 months

                                                                                                      Kat’s number one goal for the next 12 months is to keep getting fitter, stronger, and confident. Business-wise, Kat wants to keep getting amazing clients and helping as many people as possible to smash it.

                                                                                                      Parting words

                                                                                                       

                                                                                                      “Do it today.”

                                                                                                      Kat Merchant

                                                                                                       

                                                                                                      [spp-transcript]

                                                                                                       

                                                                                                      Connect with Kat Merchant

                                                                                                      • LinkedIn
                                                                                                      • Website
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s books

                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • My Worst Investment Ever
                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s online programs

                                                                                                      • Valuation Master Class
                                                                                                      • The Become a Better Investor Community
                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • Finance Made Ridiculously Simple
                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                      • Achieve Your Goals
                                                                                                      
                                                                                                      

                                                                                                      Connect with Andrew Stotz:

                                                                                                      • astotz.com
                                                                                                      • LinkedIn
                                                                                                      • Facebook
                                                                                                      • Instagram
                                                                                                      • Threads
                                                                                                      • Twitter
                                                                                                      • YouTube
                                                                                                      • My Worst Investment Ever Podcast
                                                                                                      
                                                                                                      ]]>401b3ba8-ec33-4a94-9286-72fd55819d1eThu, 24 Aug 2023 06:00:00 +070034:31falsefullLaurent Lequeu – Sizing Is Crucial When TradingBIO: Laurent Lequeu is a multi-asset investor dedicated to assisting High Net Worth Individuals and Retail Investors in achieving financial success through actionable investment insights derived from comprehensive global macro trends and meticulous bottom-up analysis.

                                                                                                      STORY: Laurent thought he could outsmart all the hedge funds and the most brilliant investors by shorting NVIDIA before the first quarter results. His thesis was that the stock was an extended and overcrowded trade. However, people were still interested in the stock, so the price didn’t fall as Laurent expected. Consequently, he made a loss.

                                                                                                      LEARNING: Sizing is crucial, especially in a short position. Apply risk management when investing. Accept that you’re going to be wrong.

                                                                                                       

                                                                                                      “You have to admit that you’re wrong and that the market is always right.”

                                                                                                      Laurent Lequeu

                                                                                                       

                                                                                                      Guest profile

                                                                                                      Laurent Lequeu is a multi-asset investor dedicated to assisting High Net Worth Individuals and Retail Investors in achieving financial success through actionable investment insights derived from comprehensive global macro trends and meticulous bottom-up analysis.

                                                                                                      Laurent is a global citizen with a mission to enhance financial literacy and empower individuals worldwide through education.

                                                                                                      Worst investment ever

                                                                                                      Not too long ago, Laurent thought he could outsmart all the hedge funds and the most brilliant investors by shorting NVIDIA before the first quarter results. His thesis was that the stock was an extended and overcrowded trade. However, people were still interested in the stock, so the price didn’t fall as Laurent expected. Consequently, he made a loss.

                                                                                                      Lessons learned

                                                                                                      • Sizing is crucial, especially in a short position.
                                                                                                      • Apply risk management when investing.
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s takeaways

                                                                                                      • You have to accept that you will be wrong, and when you get it wrong, be willing to exit, particularly in a short position.
                                                                                                      • If you don’t admit you’re wrong, the market will admit it for you.
                                                                                                      
                                                                                                      

                                                                                                      Actionable advice

                                                                                                      Before you enter the trades, know how much you can lose. Knowing what you can lose is more important than knowing what you can win. Also, admit that you’re wrong because there’s nothing wrong with being wrong. This is an industry where you must be right more often than wrong, but you will be wrong eventually.

                                                                                                      Laurent’s recommendations

                                                                                                      Laurent recommends focusing on personal learning and personal development regarding financial literacy.

                                                                                                      No.1 goal for the next 12 months

                                                                                                      Laurent’s number one goal for the next 12 months is to be fully dedicated to his new company, which is focusing on improving financial literacy for everyone. He also wants to democratize and demystify macro investing.

                                                                                                      Parting words

                                                                                                       

                                                                                                      “Unlock your individual financial success and learn to be financially independent.”

                                                                                                      Laurent Lequeu

                                                                                                       

                                                                                                      [spp-transcript]

                                                                                                       

                                                                                                      Connect with Laurent Lequeu

                                                                                                      • LinkedIn
                                                                                                      • Facebook
                                                                                                      • Twitter
                                                                                                      • YouTube 
                                                                                                      • Substack
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s books

                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • My Worst Investment Ever
                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s online programs

                                                                                                      • Valuation Master Class
                                                                                                      • The Become a Better Investor Community
                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • Finance Made Ridiculously Simple
                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                      • Achieve Your Goals
                                                                                                      
                                                                                                      

                                                                                                      Connect with Andrew Stotz:

                                                                                                      • astotz.com
                                                                                                      • LinkedIn
                                                                                                      • Facebook
                                                                                                      • Instagram
                                                                                                      • Threads
                                                                                                      • Twitter
                                                                                                      • YouTube
                                                                                                      • My Worst Investment Ever Podcast
                                                                                                      
                                                                                                      ]]>BIO: Laurent Lequeu is a multi-asset investor dedicated to assisting High Net Worth Individuals and Retail Investors in achieving financial success through actionable investment insights derived from comprehensive global macro trends and meticulous bottom-up analysis.

                                                                                                      STORY: Laurent thought he could outsmart all the hedge funds and the most brilliant investors by shorting NVIDIA before the first quarter results. His thesis was that the stock was an extended and overcrowded trade. However, people were still interested in the stock, so the price didn’t fall as Laurent expected. Consequently, he made a loss.

                                                                                                      LEARNING: Sizing is crucial, especially in a short position. Apply risk management when investing. Accept that you’re going to be wrong.

                                                                                                       

                                                                                                      “You have to admit that you’re wrong and that the market is always right.”

                                                                                                      Laurent Lequeu

                                                                                                       

                                                                                                      Guest profile

                                                                                                      Laurent Lequeu is a multi-asset investor dedicated to assisting High Net Worth Individuals and Retail Investors in achieving financial success through actionable investment insights derived from comprehensive global macro trends and meticulous bottom-up analysis.

                                                                                                      Laurent is a global citizen with a mission to enhance financial literacy and empower individuals worldwide through education.

                                                                                                      Worst investment ever

                                                                                                      Not too long ago, Laurent thought he could outsmart all the hedge funds and the most brilliant investors by shorting NVIDIA before the first quarter results. His thesis was that the stock was an extended and overcrowded trade. However, people were still interested in the stock, so the price didn’t fall as Laurent expected. Consequently, he made a loss.

                                                                                                      Lessons learned

                                                                                                      • Sizing is crucial, especially in a short position.
                                                                                                      • Apply risk management when investing.
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s takeaways

                                                                                                      • You have to accept that you will be wrong, and when you get it wrong, be willing to exit, particularly in a short position.
                                                                                                      • If you don’t admit you’re wrong, the market will admit it for you.
                                                                                                      
                                                                                                      

                                                                                                      Actionable advice

                                                                                                      Before you enter the trades, know how much you can lose. Knowing what you can lose is more important than knowing what you can win. Also, admit that you’re wrong because there’s nothing wrong with being wrong. This is an industry where you must be right more often than wrong, but you will be wrong eventually.

                                                                                                      Laurent’s recommendations

                                                                                                      Laurent recommends focusing on personal learning and personal development regarding financial literacy.

                                                                                                      No.1 goal for the next 12 months

                                                                                                      Laurent’s number one goal for the next 12 months is to be fully dedicated to his new company, which is focusing on improving financial literacy for everyone. He also wants to democratize and demystify macro investing.

                                                                                                      Parting words

                                                                                                       

                                                                                                      “Unlock your individual financial success and learn to be financially independent.”

                                                                                                      Laurent Lequeu

                                                                                                       

                                                                                                      [spp-transcript]

                                                                                                       

                                                                                                      Connect with Laurent Lequeu

                                                                                                      • LinkedIn
                                                                                                      • Facebook
                                                                                                      • Twitter
                                                                                                      • YouTube 
                                                                                                      • Substack
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s books

                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • My Worst Investment Ever
                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s online programs

                                                                                                      • Valuation Master Class
                                                                                                      • The Become a Better Investor Community
                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • Finance Made Ridiculously Simple
                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                      • Achieve Your Goals
                                                                                                      
                                                                                                      

                                                                                                      Connect with Andrew Stotz:

                                                                                                      • astotz.com
                                                                                                      • LinkedIn
                                                                                                      • Facebook
                                                                                                      • Instagram
                                                                                                      • Threads
                                                                                                      • Twitter
                                                                                                      • YouTube
                                                                                                      • My Worst Investment Ever Podcast
                                                                                                      
                                                                                                      ]]>00159b0f-0807-4d1f-a467-0569acaec573Mon, 21 Aug 2023 06:00:00 +070025:48falsefullDavid Kass – Don’t Invest in a Company Unless the CEO Owns a Large StakeBIO: Dr. David Kass received his Ph.D. in Business Economics from Harvard University and has published articles in corporate finance, industrial organization, and health economics. He currently teaches Advanced Financial Management.

                                                                                                      STORY: In his early 20s, David invested $2,000 in a company giving out high dividends. Only after he invested did he realize that none of the senior executives in the company owned its shares. Soon enough, the stock went down to zero due to accounting fraud.

                                                                                                      LEARNING: Only invest in a company if senior executives, especially the CEO, own a significant stake. The value of the CEO’s stock in his own company to his annual salary should be at least 3:1.

                                                                                                       

                                                                                                      “Look carefully at proxy statements and make sure the CEO and other senior managers have skin in the game, that their interests are likely aligned with yours and have a large stake through their stock holdings.”

                                                                                                      Dr. David Kass

                                                                                                       

                                                                                                      Guest profile

                                                                                                      Dr. David Kass received his Ph.D. in Business Economics from Harvard University and has published articles in corporate finance, industrial organization, and health economics. He currently teaches Advanced Financial Management.

                                                                                                      Before joining the Smith School faculty in 2004, he held senior positions with the Federal Government (Federal Trade Commission, General Accounting Office, Department of Defense, and the Bureau of Economic Analysis).

                                                                                                      Dr. Kass has recently appeared on Bloomberg TV, CNBC, PBS Nightly Business Report, Maryland Public Television, Business News Network TV (Canada), FOX TV, Bloomberg Radio, Wharton Business Radio, KCBS Radio, American Public Media’s Marketplace Radio, and WYPR Radio (Baltimore), and has been quoted on numerous occasions by The Wall Street Journal, Bloomberg News, The New York Times and The Washington Post, where he has primarily discussed Warren Buffett, Berkshire Hathaway, the economy, and the stock market.

                                                                                                      He has also launched a Smith School “Warren Buffett” blog. Dr. Kass has accompanied MBA students on trips to Omaha for private meetings with Warren Buffett and Finance Fellows to Berkshire Hathaway’s annual meetings.

                                                                                                      Dr. Kass received a Smith School “Top 15% Teaching Award”, a “Distinguished Teaching Award (Top 10%),” and the prestigious “Krowe Teaching Award” on two occasions.

                                                                                                      Worst investment ever

                                                                                                      David was fortunate to start as an investor in the stock market at age 12, courtesy of his grandfather, who gave him a gift of five shares of a $20 stock. Since then, David started following the market.

                                                                                                      Fast forward ten years or so, in his early 20s, when David was working and earning some money investing in the stock market. In 1969 the stock market was doing reasonably well, and a stock caught David’s attention. Back then, every day, the Wall Street Journal, New York Times, or Financial News would list the ten most active stocks by number of shares traded. Near the top of the list was this computer software company called Scientific Resources. It had a common and preferred stock. David noticed that the preferred stock was paying a 9% dividend yield.

                                                                                                      David didn’t understand the relationship between risk and return then. The average stock in the stock market then had an average dividend yield of 3%. Cash dividends were higher because more companies back then did not buy back their shares. They’d return capital to shareholders through a cash dividend. So a stock paying 9% was a huge deal. David bought 100 shares at $20 per share. The $2,000 was all the money he had to invest at the time. Then the share price started going down daily.

                                                                                                      Once a year, shareholders would be asked to vote under SEC rules. David received a proxy statement from the company and a ballot to vote for senior management and other issues that came up. When he read the report, he realized that none of the senior executives, from the Chairman of the Board to the Executive Vice President and all the listed eight executives, owned any company shares. David wondered why none of these senior executives had a stake in a company they were running. He learned why when the stock he bought at $20 finally sold at about $2 as it went down to zeros due to accounting fraud.

                                                                                                      Lessons learned

                                                                                                      • Only invest in a company if senior executives, especially CEOs, own a significant stake.
                                                                                                      • The value of the CEO’s stock in his own company to his annual salary should be at least 3:1. If the CEO is deriving most of his wealth or income from the company via his salary, then his interests are not aligned with shareholders.
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s takeaways

                                                                                                      • Alignment in the senior executives’ interests and of the shareholders is critical.
                                                                                                      
                                                                                                      

                                                                                                      David’s recommendations

                                                                                                      David recommends reading Berkshire Hathaway Letters to Shareholders to learn about investing in an easy-to-understand manner. He also encourages young people to start investing when they have some money, follow their company, stock, or fund, and experience the emotion of investing.

                                                                                                      No.1 goal for the next 12 months

                                                                                                      David’s number one goal for the next 12 months is to continue teaching at the Smith School of Business, University of Maryland, and to follow the current interesting, challenging global economic situation.

                                                                                                      Parting words

                                                                                                       

                                                                                                      “Try to be unemotional and learn from others’ mistakes. It’s better to learn this way rather than to have to learn from your own mistakes.”

                                                                                                      Dr. David Kass

                                                                                                       

                                                                                                      [spp-transcript]

                                                                                                       

                                                                                                      Connect with David Kass

                                                                                                      • LinkedIn
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s books

                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • My Worst Investment Ever
                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s online programs

                                                                                                      • Valuation Master Class
                                                                                                      • The Become a Better Investor Community
                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • Finance Made Ridiculously Simple
                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                      • Achieve Your Goals
                                                                                                      
                                                                                                      

                                                                                                      Connect with Andrew Stotz:

                                                                                                      • astotz.com
                                                                                                      • LinkedIn
                                                                                                      • Facebook
                                                                                                      • Instagram
                                                                                                      • Threads
                                                                                                      • Twitter
                                                                                                      • YouTube
                                                                                                      • My Worst Investment Ever Podcast
                                                                                                      
                                                                                                      ]]>BIO: Dr. David Kass received his Ph.D. in Business Economics from Harvard University and has published articles in corporate finance, industrial organization, and health economics. He currently teaches Advanced Financial Management.

                                                                                                      STORY: In his early 20s, David invested $2,000 in a company giving out high dividends. Only after he invested did he realize that none of the senior executives in the company owned its shares. Soon enough, the stock went down to zero due to accounting fraud.

                                                                                                      LEARNING: Only invest in a company if senior executives, especially the CEO, own a significant stake. The value of the CEO’s stock in his own company to his annual salary should be at least 3:1.

                                                                                                       

                                                                                                      “Look carefully at proxy statements and make sure the CEO and other senior managers have skin in the game, that their interests are likely aligned with yours and have a large stake through their stock holdings.”

                                                                                                      Dr. David Kass

                                                                                                       

                                                                                                      Guest profile

                                                                                                      Dr. David Kass received his Ph.D. in Business Economics from Harvard University and has published articles in corporate finance, industrial organization, and health economics. He currently teaches Advanced Financial Management.

                                                                                                      Before joining the Smith School faculty in 2004, he held senior positions with the Federal Government (Federal Trade Commission, General Accounting Office, Department of Defense, and the Bureau of Economic Analysis).

                                                                                                      Dr. Kass has recently appeared on Bloomberg TV, CNBC, PBS Nightly Business Report, Maryland Public Television, Business News Network TV (Canada), FOX TV, Bloomberg Radio, Wharton Business Radio, KCBS Radio, American Public Media’s Marketplace Radio, and WYPR Radio (Baltimore), and has been quoted on numerous occasions by The Wall Street Journal, Bloomberg News, The New York Times and The Washington Post, where he has primarily discussed Warren Buffett, Berkshire Hathaway, the economy, and the stock market.

                                                                                                      He has also launched a Smith School “Warren Buffett” blog. Dr. Kass has accompanied MBA students on trips to Omaha for private meetings with Warren Buffett and Finance Fellows to Berkshire Hathaway’s annual meetings.

                                                                                                      Dr. Kass received a Smith School “Top 15% Teaching Award”, a “Distinguished Teaching Award (Top 10%),” and the prestigious “Krowe Teaching Award” on two occasions.

                                                                                                      Worst investment ever

                                                                                                      David was fortunate to start as an investor in the stock market at age 12, courtesy of his grandfather, who gave him a gift of five shares of a $20 stock. Since then, David started following the market.

                                                                                                      Fast forward ten years or so, in his early 20s, when David was working and earning some money investing in the stock market. In 1969 the stock market was doing reasonably well, and a stock caught David’s attention. Back then, every day, the Wall Street Journal, New York Times, or Financial News would list the ten most active stocks by number of shares traded. Near the top of the list was this computer software company called Scientific Resources. It had a common and preferred stock. David noticed that the preferred stock was paying a 9% dividend yield.

                                                                                                      David didn’t understand the relationship between risk and return then. The average stock in the stock market then had an average dividend yield of 3%. Cash dividends were higher because more companies back then did not buy back their shares. They’d return capital to shareholders through a cash dividend. So a stock paying 9% was a huge deal. David bought 100 shares at $20 per share. The $2,000 was all the money he had to invest at the time. Then the share price started going down daily.

                                                                                                      Once a year, shareholders would be asked to vote under SEC rules. David received a proxy statement from the company and a ballot to vote for senior management and other issues that came up. When he read the report, he realized that none of the senior executives, from the Chairman of the Board to the Executive Vice President and all the listed eight executives, owned any company shares. David wondered why none of these senior executives had a stake in a company they were running. He learned why when the stock he bought at $20 finally sold at about $2 as it went down to zeros due to accounting fraud.

                                                                                                      Lessons learned

                                                                                                      • Only invest in a company if senior executives, especially CEOs, own a significant stake.
                                                                                                      • The value of the CEO’s stock in his own company to his annual salary should be at least 3:1. If the CEO is deriving most of his wealth or income from the company via his salary, then his interests are not aligned with shareholders.
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s takeaways

                                                                                                      • Alignment in the senior executives’ interests and of the shareholders is critical.
                                                                                                      
                                                                                                      

                                                                                                      David’s recommendations

                                                                                                      David recommends reading Berkshire Hathaway Letters to Shareholders to learn about investing in an easy-to-understand manner. He also encourages young people to start investing when they have some money, follow their company, stock, or fund, and experience the emotion of investing.

                                                                                                      No.1 goal for the next 12 months

                                                                                                      David’s number one goal for the next 12 months is to continue teaching at the Smith School of Business, University of Maryland, and to follow the current interesting, challenging global economic situation.

                                                                                                      Parting words

                                                                                                       

                                                                                                      “Try to be unemotional and learn from others’ mistakes. It’s better to learn this way rather than to have to learn from your own mistakes.”

                                                                                                      Dr. David Kass

                                                                                                       

                                                                                                      [spp-transcript]

                                                                                                       

                                                                                                      Connect with David Kass

                                                                                                      • LinkedIn
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s books

                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • My Worst Investment Ever
                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s online programs

                                                                                                      • Valuation Master Class
                                                                                                      • The Become a Better Investor Community
                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • Finance Made Ridiculously Simple
                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                      • Achieve Your Goals
                                                                                                      
                                                                                                      

                                                                                                      Connect with Andrew Stotz:

                                                                                                      • astotz.com
                                                                                                      • LinkedIn
                                                                                                      • Facebook
                                                                                                      • Instagram
                                                                                                      • Threads
                                                                                                      • Twitter
                                                                                                      • YouTube
                                                                                                      • My Worst Investment Ever Podcast
                                                                                                      
                                                                                                      ]]>e1a0ee8f-8b37-480f-b032-e0c3a0b5ce9cFri, 18 Aug 2023 06:00:00 +070053:36falsefullChristopher Panagiotu – Go With Your Gut, but VerifyBIO: Christopher Panagiotu hosts the “CAPitalize Your Finances” podcast and is the original CAPitalizer: one who is obsessed with understanding what there is to know about their passion.

                                                                                                      STORY: Chris was suckered into buying Ford and GameStop shares by the high dividends the companies were offering. However, both companies couldn’t afford to pay those dividends. Chris also started a business to steal customers from his father, whom he despised. The business lasted only seven months, and it was a complete failure.

                                                                                                      LEARNING: When in doubt, read more. Acknowledge that you made a mistake, and move on. Never invest in a company because of a celebrity CEO, founder, or CFO.

                                                                                                       

                                                                                                      “Always keep capitalizing.”

                                                                                                      Christopher Panagiotu

                                                                                                       

                                                                                                      Guest profile

                                                                                                      Christopher Panagiotu hosts the “CAPitalize Your Finances” podcast and is the original CAPitalizer: one who is absolutely obsessed with profoundly understanding what there is to know about their passion.

                                                                                                      Worst investment ever

                                                                                                      Chris bought the Ford stock, which he admits was a lackluster stock. Alan Mulally had saved Boeing and left the company for Ford. Mulally was the reason Chris invested in Ford. The celebrity CEO turned it around, so Chris hung on to the stock, but for too long. Chris was suckered into Ford’s high dividend, but he soon realized that the company couldn’t afford to pay that dividend.

                                                                                                      Another poor investment that Chris made was investing in GameStop. He was a gamer growing up, and in the 2000s, Gamestop was it. GameStop hooked Chris with the same thing that Ford did. Their dividend was huge, but they couldn’t afford it.

                                                                                                      Aside from stocks, Chris’s worst investment ever includes a business that he started to steal customers from his father, whom he despised. The company lasted only seven months, and it was a complete failure.

                                                                                                      Lessons learned

                                                                                                      • When in doubt, read more.
                                                                                                      • Go with your gut, but verify.
                                                                                                      • Humble yourself, acknowledge that you made a mistake, and move on.
                                                                                                      • Never invest in a company because of a celebrity CEO, founder, or CFO.
                                                                                                      • Don’t try to steal business out of spite.
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s takeaways

                                                                                                      • Trees don’t grow to the sky, so there are very few stocks that you can hold forever.
                                                                                                      • If you’re not getting trust from your business or personal relationships, walk away and get it elsewhere.
                                                                                                      
                                                                                                      

                                                                                                      Actionable advice

                                                                                                      Surround yourself with amazing people and level up with the people in your life.

                                                                                                      Christopher’s recommendations

                                                                                                      If you want free content, head to Spotify and subscribe to CAPitalize Your Finances. Chris publishes new interviews with celebrities from all walks of life every Monday. They talk about capitalizing on your finances if you pursue that career. He also gives up-to-date, top-of-the-line research.

                                                                                                      You can also buy Chris’s book on Amazon to learn more from him. If you want to follow Chris on social media, head to Instagram, LinkedIn, or Twitter.

                                                                                                      Lastly, stay tuned because, on December 1, Chris will launch Capitalize Your Finances, his first-ever masterclass where he’ll share modules, tools, and tricks. He’ll also show you what he does for clients daily and how you can capitalize on your finances to the fullest of your abilities.

                                                                                                      No.1 goal for the next 12 months

                                                                                                      Christopher’s number one goal for the next 12 months is to be the best dad and husband. Professionally, to launch his online course and set the stage so that he can be the Benjamin Graham equivalent on the planning side for future generations.

                                                                                                      Parting words

                                                                                                       

                                                                                                      “Thank you so much for having me on and for your listeners tuning in. Thank you for listening to me rant, and as always, keep capitalizing.”

                                                                                                      Christopher Panagiotu

                                                                                                       

                                                                                                      [spp-transcript]

                                                                                                       

                                                                                                      Connect with Christopher Panagiotu

                                                                                                      • LinkedIn
                                                                                                      • Twitter
                                                                                                      • Instagram
                                                                                                      • YouTube
                                                                                                      • Website 
                                                                                                      • Podcast
                                                                                                      • Book
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s books

                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • My Worst Investment Ever
                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s online programs

                                                                                                      • Valuation Master Class
                                                                                                      • The Become a Better Investor Community
                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • Finance Made Ridiculously Simple
                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                      • Achieve Your Goals
                                                                                                      
                                                                                                      

                                                                                                      Connect with Andrew Stotz:

                                                                                                      • astotz.com
                                                                                                      • LinkedIn
                                                                                                      • Facebook
                                                                                                      • Instagram
                                                                                                      • Threads
                                                                                                      • Twitter
                                                                                                      • YouTube
                                                                                                      • My Worst Investment Ever Podcast
                                                                                                      
                                                                                                      ]]>BIO: Christopher Panagiotu hosts the “CAPitalize Your Finances” podcast and is the original CAPitalizer: one who is obsessed with understanding what there is to know about their passion.

                                                                                                      STORY: Chris was suckered into buying Ford and GameStop shares by the high dividends the companies were offering. However, both companies couldn’t afford to pay those dividends. Chris also started a business to steal customers from his father, whom he despised. The business lasted only seven months, and it was a complete failure.

                                                                                                      LEARNING: When in doubt, read more. Acknowledge that you made a mistake, and move on. Never invest in a company because of a celebrity CEO, founder, or CFO.

                                                                                                       

                                                                                                      “Always keep capitalizing.”

                                                                                                      Christopher Panagiotu

                                                                                                       

                                                                                                      Guest profile

                                                                                                      Christopher Panagiotu hosts the “CAPitalize Your Finances” podcast and is the original CAPitalizer: one who is absolutely obsessed with profoundly understanding what there is to know about their passion.

                                                                                                      Worst investment ever

                                                                                                      Chris bought the Ford stock, which he admits was a lackluster stock. Alan Mulally had saved Boeing and left the company for Ford. Mulally was the reason Chris invested in Ford. The celebrity CEO turned it around, so Chris hung on to the stock, but for too long. Chris was suckered into Ford’s high dividend, but he soon realized that the company couldn’t afford to pay that dividend.

                                                                                                      Another poor investment that Chris made was investing in GameStop. He was a gamer growing up, and in the 2000s, Gamestop was it. GameStop hooked Chris with the same thing that Ford did. Their dividend was huge, but they couldn’t afford it.

                                                                                                      Aside from stocks, Chris’s worst investment ever includes a business that he started to steal customers from his father, whom he despised. The company lasted only seven months, and it was a complete failure.

                                                                                                      Lessons learned

                                                                                                      • When in doubt, read more.
                                                                                                      • Go with your gut, but verify.
                                                                                                      • Humble yourself, acknowledge that you made a mistake, and move on.
                                                                                                      • Never invest in a company because of a celebrity CEO, founder, or CFO.
                                                                                                      • Don’t try to steal business out of spite.
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s takeaways

                                                                                                      • Trees don’t grow to the sky, so there are very few stocks that you can hold forever.
                                                                                                      • If you’re not getting trust from your business or personal relationships, walk away and get it elsewhere.
                                                                                                      
                                                                                                      

                                                                                                      Actionable advice

                                                                                                      Surround yourself with amazing people and level up with the people in your life.

                                                                                                      Christopher’s recommendations

                                                                                                      If you want free content, head to Spotify and subscribe to CAPitalize Your Finances. Chris publishes new interviews with celebrities from all walks of life every Monday. They talk about capitalizing on your finances if you pursue that career. He also gives up-to-date, top-of-the-line research.

                                                                                                      You can also buy Chris’s book on Amazon to learn more from him. If you want to follow Chris on social media, head to Instagram, LinkedIn, or Twitter.

                                                                                                      Lastly, stay tuned because, on December 1, Chris will launch Capitalize Your Finances, his first-ever masterclass where he’ll share modules, tools, and tricks. He’ll also show you what he does for clients daily and how you can capitalize on your finances to the fullest of your abilities.

                                                                                                      No.1 goal for the next 12 months

                                                                                                      Christopher’s number one goal for the next 12 months is to be the best dad and husband. Professionally, to launch his online course and set the stage so that he can be the Benjamin Graham equivalent on the planning side for future generations.

                                                                                                      Parting words

                                                                                                       

                                                                                                      “Thank you so much for having me on and for your listeners tuning in. Thank you for listening to me rant, and as always, keep capitalizing.”

                                                                                                      Christopher Panagiotu

                                                                                                       

                                                                                                      [spp-transcript]

                                                                                                       

                                                                                                      Connect with Christopher Panagiotu

                                                                                                      • LinkedIn
                                                                                                      • Twitter
                                                                                                      • Instagram
                                                                                                      • YouTube
                                                                                                      • Website 
                                                                                                      • Podcast
                                                                                                      • Book
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s books

                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • My Worst Investment Ever
                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s online programs

                                                                                                      • Valuation Master Class
                                                                                                      • The Become a Better Investor Community
                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • Finance Made Ridiculously Simple
                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                      • Achieve Your Goals
                                                                                                      
                                                                                                      

                                                                                                      Connect with Andrew Stotz:

                                                                                                      • astotz.com
                                                                                                      • LinkedIn
                                                                                                      • Facebook
                                                                                                      • Instagram
                                                                                                      • Threads
                                                                                                      • Twitter
                                                                                                      • YouTube
                                                                                                      • My Worst Investment Ever Podcast
                                                                                                      
                                                                                                      ]]>b0edd167-2df6-40ab-a830-c3dc4c8ac69fFri, 11 Aug 2023 06:00:00 +070032:10falsefullISMS 29: Larry Swedroe – The Shiny Apple is Poisonous and Information is Not KnowledgeIn this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe; Ignorance is Bliss. Today they discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this ninth series, they discuss mistake number 16: Do You Fail To See The Poison Inside the Shiny Apple? And mistake number 17: Do You Confuse Information With Knowledge?

                                                                                                      LEARNING: Trust, but verify even when working with a financial advisor. Don’t confuse information with knowledge when buying individual stocks.

                                                                                                       

                                                                                                      “One of the rules of investing is you should always ask an advisor if they put their money where their mouth is.”

                                                                                                      Larry Swedroe

                                                                                                       

                                                                                                      In today’s episode, Andrew continues his discussion with Larry Swedroe, head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                                                      Larry deeply understands the world of academic research and investing, especially risk. Today Andrew and Larry discuss a chapter of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this ninth series, they discuss mistake number 16: Do You Fail To See The Poison Inside the Shiny Apple? And mistake number 17: Do You Confuse Information With Knowledge?

                                                                                                      Missed out on previous mistakes? Check them out:

                                                                                                      • ISMS 8: Larry Swedroe – Are You Overconfident in Your Skills?
                                                                                                      • ISMS 17: Larry Swedroe – Do You Project Recent Trends Indefinitely Into the Future?
                                                                                                      • ISMS 20: Larry Swedroe – Do You Extrapolate From Small Samples and Trust Your Intuition?
                                                                                                      • ISMS 23: Larry Swedroe – Do You Allow Yourself to Be Influenced by Your Ego and Herd Mentality?
                                                                                                      • ISMS 24: Larry Swedroe – Confusing Skill and Luck Can Stop You From Investing Wisely
                                                                                                      • ISMS 25: Larry Swedroe – Admit Your Mistakes and Don’t Listen to Fake Experts
                                                                                                      • ISMS 26: Larry Swedroe – Are You Subject to the Endowment Effect or the Hot Streak Fallacy?
                                                                                                      • ISMS 27: Larry Swedroe – Familiar Doesn’t Make It Safe and You’re Not Playing With the House’s Money
                                                                                                      
                                                                                                      

                                                                                                      Mistake number 16: Do You Fail To See The Poison Inside the Shiny Apple?

                                                                                                      Investment brokers are notorious for enhancing their wallets at the expense of the consumer by disguising or hiding the fees they take. Brokers take advantage of the naivete of the average investor by hiding the high costs in shiny investment assets. For instance, they exploit investors’ lack of knowledge of the bond market through hidden markups and markdowns. They sell bonds with longer maturities to conceal markups and expose investors to price risk.

                                                                                                      Investment brokers intentionally make an investment look complex because the more complicated it is, the harder it is for the investor to figure it out. However, always remember that it’s not your responsibility to figure it out. If your financial adviser is telling you something confusing, ask them to explain more clearly. You have that right to know. Trust but verify, is always the basic principle.

                                                                                                      If something looks too good to be true, follow Larry’s rule of investing: always ask the advisor if they put their money where their mouth is. Ask to see their investment portfolio.

                                                                                                      Mistake number 17: Do You Confuse Information With Knowledge?

                                                                                                      Information could be an opinion. On the other hand, knowledge is information that you can use to generate alpha or outperformance. When it comes to owning individual stocks, be careful not to confuse information with knowledge. Unless you have a significant advantage, like inside information, which is illegal to trade on, you shouldn’t buy individual stock. Never assume that you’re the only one with the knowledge.

                                                                                                      Whenever a stockbroker tries to convince you to purchase an individual stock, ask them to give you the reasons why you should buy this stock. Also, ask if they genuinely believe they’re the only ones who know these reasons. Larry insists that unless you have some advantage, which you almost certainly don’t, never buy the stock just because the odds are great, you’ll underperform.

                                                                                                      About Larry Swedroe

                                                                                                      Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                                                      Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                                                      Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                                                      Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                                                       

                                                                                                      [spp-transcript]

                                                                                                       

                                                                                                      Connect with Larry Swedroe

                                                                                                      • LinkedIn
                                                                                                      • Twitter
                                                                                                      • Website
                                                                                                      • Books
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s books

                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • My Worst Investment Ever
                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                      
                                                                                                      

                                                                                                      Andrew’s online programs

                                                                                                      • Valuation Master Class
                                                                                                      • The Become a Better Investor Community
                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                      • Finance Made Ridiculously Simple
                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                      • Transform Your]]>In this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe; Ignorance is Bliss. Today they discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this ninth series, they discuss mistake number 16: Do You Fail To See The Poison Inside the Shiny Apple? And mistake number 17: Do You Confuse Information With Knowledge?

                                                                                                        LEARNING: Trust, but verify even when working with a financial advisor. Don’t confuse information with knowledge when buying individual stocks.

                                                                                                         

                                                                                                        “One of the rules of investing is you should always ask an advisor if they put their money where their mouth is.”

                                                                                                        Larry Swedroe

                                                                                                         

                                                                                                        In today’s episode, Andrew continues his discussion with Larry Swedroe, head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                                                        Larry deeply understands the world of academic research and investing, especially risk. Today Andrew and Larry discuss a chapter of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this ninth series, they discuss mistake number 16: Do You Fail To See The Poison Inside the Shiny Apple? And mistake number 17: Do You Confuse Information With Knowledge?

                                                                                                        Missed out on previous mistakes? Check them out:

                                                                                                        • ISMS 8: Larry Swedroe – Are You Overconfident in Your Skills?
                                                                                                        • ISMS 17: Larry Swedroe – Do You Project Recent Trends Indefinitely Into the Future?
                                                                                                        • ISMS 20: Larry Swedroe – Do You Extrapolate From Small Samples and Trust Your Intuition?
                                                                                                        • ISMS 23: Larry Swedroe – Do You Allow Yourself to Be Influenced by Your Ego and Herd Mentality?
                                                                                                        • ISMS 24: Larry Swedroe – Confusing Skill and Luck Can Stop You From Investing Wisely
                                                                                                        • ISMS 25: Larry Swedroe – Admit Your Mistakes and Don’t Listen to Fake Experts
                                                                                                        • ISMS 26: Larry Swedroe – Are You Subject to the Endowment Effect or the Hot Streak Fallacy?
                                                                                                        • ISMS 27: Larry Swedroe – Familiar Doesn’t Make It Safe and You’re Not Playing With the House’s Money
                                                                                                        
                                                                                                        

                                                                                                        Mistake number 16: Do You Fail To See The Poison Inside the Shiny Apple?

                                                                                                        Investment brokers are notorious for enhancing their wallets at the expense of the consumer by disguising or hiding the fees they take. Brokers take advantage of the naivete of the average investor by hiding the high costs in shiny investment assets. For instance, they exploit investors’ lack of knowledge of the bond market through hidden markups and markdowns. They sell bonds with longer maturities to conceal markups and expose investors to price risk.

                                                                                                        Investment brokers intentionally make an investment look complex because the more complicated it is, the harder it is for the investor to figure it out. However, always remember that it’s not your responsibility to figure it out. If your financial adviser is telling you something confusing, ask them to explain more clearly. You have that right to know. Trust but verify, is always the basic principle.

                                                                                                        If something looks too good to be true, follow Larry’s rule of investing: always ask the advisor if they put their money where their mouth is. Ask to see their investment portfolio.

                                                                                                        Mistake number 17: Do You Confuse Information With Knowledge?

                                                                                                        Information could be an opinion. On the other hand, knowledge is information that you can use to generate alpha or outperformance. When it comes to owning individual stocks, be careful not to confuse information with knowledge. Unless you have a significant advantage, like inside information, which is illegal to trade on, you shouldn’t buy individual stock. Never assume that you’re the only one with the knowledge.

                                                                                                        Whenever a stockbroker tries to convince you to purchase an individual stock, ask them to give you the reasons why you should buy this stock. Also, ask if they genuinely believe they’re the only ones who know these reasons. Larry insists that unless you have some advantage, which you almost certainly don’t, never buy the stock just because the odds are great, you’ll underperform.

                                                                                                        About Larry Swedroe

                                                                                                        Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                                                        Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                                                        Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                                                        Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                                                         

                                                                                                        [spp-transcript]

                                                                                                         

                                                                                                        Connect with Larry Swedroe

                                                                                                        • LinkedIn
                                                                                                        • Twitter
                                                                                                        • Website
                                                                                                        • Books
                                                                                                        
                                                                                                        

                                                                                                        Andrew’s books

                                                                                                        • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                        • My Worst Investment Ever
                                                                                                        • 9 Valuation Mistakes and How to Avoid Them
                                                                                                        • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                        
                                                                                                        

                                                                                                        Andrew’s online programs

                                                                                                        • Valuation Master Class
                                                                                                        • The Become a Better Investor Community
                                                                                                        • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                        • Finance Made Ridiculously Simple
                                                                                                        • FVMR Investing: Quantamental Investing Across the World
                                                                                                        • Become a Great Presenter and Increase Your Influence
                                                                                                        • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                        • Achieve Your Goals
                                                                                                        
                                                                                                        

                                                                                                        Connect with Andrew Stotz:

                                                                                                        • astotz.com
                                                                                                        • LinkedIn
                                                                                                        • Facebook
                                                                                                        • Instagram
                                                                                                        • Twitter
                                                                                                        • YouTube
                                                                                                        • My Worst Investment Ever Podcast
                                                                                                        
                                                                                                        

                                                                                                        Further reading mentioned

                                                                                                        • Larry Swedroe and RC Balaban, Investment Mistakes Even Smart Investors Make and How to Avoid Them
                                                                                                        • Philip E. Tetlock, Expert Political Judgment: How Good Is It? How Can We Know?
                                                                                                        • Gary Belsky and Thomas Gilovich, Why Smart People Make Big Money Mistakes and How to Correct Them: Lessons from the Life-Changing Science of Behavioral Economics
                                                                                                        • Larry Swedroe, Think, Act, and Invest Like Warren Buffett: The Winning Strategy to Help You Achieve Your Financial and Life Goals
                                                                                                        
                                                                                                        ]]>7c01bdf0-b0bb-4687-b503-6b67b78549cdMon, 07 Aug 2023 06:00:00 +070055:47falsefullISMS 28: Stocks for the Long RunStocks for the Long Run

                                                                                                        Click here to get the PDF with all charts and graphs

                                                                                                        What long-term return do you expect for US stocks?

                                                                                                         

                                                                                                        In Siegel’s “Stocks for the Long Run,” he tells us to expect a 5% LT real US stock market return

                                                                                                         

                                                                                                        I became a finance teacher in Thailand in 1992

                                                                                                        Then started as a financial analyst in 1993

                                                                                                        
                                                                                                        

                                                                                                        
                                                                                                        

                                                                                                        Siegel’s book came out in 1994 and was one of the best references available at the time

                                                                                                        
                                                                                                        

                                                                                                        
                                                                                                        

                                                                                                        US nominal returns

                                                                                                        
                                                                                                        

                                                                                                        
                                                                                                        

                                                                                                        US real returns

                                                                                                        
                                                                                                        

                                                                                                        
                                                                                                        

                                                                                                        More than 200 years of returns

                                                                                                        
                                                                                                        

                                                                                                        
                                                                                                        

                                                                                                        95 years of returns

                                                                                                        
                                                                                                        

                                                                                                        
                                                                                                        

                                                                                                        • Higher inflation and higher nominal stock market returns, but only slightly higher real returns
                                                                                                        • Slightly lower real LT bond return, near zero ST bond return
                                                                                                        
                                                                                                        

                                                                                                        Post WWII/Bretton Woods 75 years of high inflation

                                                                                                        
                                                                                                        

                                                                                                        
                                                                                                        

                                                                                                        • Real stock returns up slightly
                                                                                                        • Real LT bond returns down
                                                                                                        • Real ST bond returns down to zero
                                                                                                        • Gold outperformed ST bonds
                                                                                                        
                                                                                                        

                                                                                                        The 21 years after the Dot Com bubble saw an unprecedented level of globalization

                                                                                                        
                                                                                                        

                                                                                                        
                                                                                                        

                                                                                                        • Inflation was down, and real US stock returns also down
                                                                                                        • Real US LT bond returns up
                                                                                                        • Nominal ST bond collapse, and real returns turn neg.
                                                                                                        • Gold beats all
                                                                                                        
                                                                                                        

                                                                                                        Siegel’s advice

                                                                                                        • Over the long-term, an investor has paid about 15x PE for about 6-7% after inflation US stock market return
                                                                                                        • In the future, expect to pay about 20x PE for about 5% after inflation return
                                                                                                        
                                                                                                        

                                                                                                        Click here to get the PDF with all charts and graphs

                                                                                                        Andrew’s books

                                                                                                        • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                        • My Worst Investment Ever
                                                                                                        • 9 Valuation Mistakes and How to Avoid Them
                                                                                                        • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                        
                                                                                                        

                                                                                                        Andrew’s online programs

                                                                                                        • Valuation Master Class
                                                                                                        • The Become a Better Investor Community
                                                                                                        • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                        • Finance Made Ridiculously Simple
                                                                                                        • FVMR Investing: Quantamental Investing Across the World
                                                                                                        • Become a Great Presenter and Increase Your Influence
                                                                                                        • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                        • Achieve Your Goals
                                                                                                        
                                                                                                        

                                                                                                        Connect with Andrew Stotz:

                                                                                                        • astotz.com
                                                                                                        • LinkedIn
                                                                                                        • Facebook
                                                                                                        • Instagram
                                                                                                        • Threads
                                                                                                        • Twitter
                                                                                                        • YouTube
                                                                                                        • My Worst Investment Ever Podcast
                                                                                                        
                                                                                                        ]]>Stocks for the Long Run

                                                                                                        Click here to get the PDF with all charts and graphs

                                                                                                        What long-term return do you expect for US stocks?

                                                                                                         

                                                                                                        In Siegel’s “Stocks for the Long Run,” he tells us to expect a 5% LT real US stock market return

                                                                                                         

                                                                                                        I became a finance teacher in Thailand in 1992

                                                                                                        Then started as a financial analyst in 1993

                                                                                                        
                                                                                                        

                                                                                                        
                                                                                                        

                                                                                                        Siegel’s book came out in 1994 and was one of the best references available at the time

                                                                                                        
                                                                                                        

                                                                                                        
                                                                                                        

                                                                                                        US nominal returns

                                                                                                        
                                                                                                        

                                                                                                        
                                                                                                        

                                                                                                        US real returns

                                                                                                        
                                                                                                        

                                                                                                        
                                                                                                        

                                                                                                        More than 200 years of returns

                                                                                                        
                                                                                                        

                                                                                                        
                                                                                                        

                                                                                                        95 years of returns

                                                                                                        
                                                                                                        

                                                                                                        
                                                                                                        

                                                                                                        • Higher inflation and higher nominal stock market returns, but only slightly higher real returns
                                                                                                        • Slightly lower real LT bond return, near zero ST bond return
                                                                                                        
                                                                                                        

                                                                                                        Post WWII/Bretton Woods 75 years of high inflation

                                                                                                        
                                                                                                        

                                                                                                        
                                                                                                        

                                                                                                        • Real stock returns up slightly
                                                                                                        • Real LT bond returns down
                                                                                                        • Real ST bond returns down to zero
                                                                                                        • Gold outperformed ST bonds
                                                                                                        
                                                                                                        

                                                                                                        The 21 years after the Dot Com bubble saw an unprecedented level of globalization

                                                                                                        
                                                                                                        

                                                                                                        
                                                                                                        

                                                                                                        • Inflation was down, and real US stock returns also down
                                                                                                        • Real US LT bond returns up
                                                                                                        • Nominal ST bond collapse, and real returns turn neg.
                                                                                                        • Gold beats all
                                                                                                        
                                                                                                        

                                                                                                        Siegel’s advice

                                                                                                        • Over the long-term, an investor has paid about 15x PE for about 6-7% after inflation US stock market return
                                                                                                        • In the future, expect to pay about 20x PE for about 5% after inflation return
                                                                                                        
                                                                                                        

                                                                                                        Click here to get the PDF with all charts and graphs

                                                                                                        Andrew’s books

                                                                                                        • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                        • My Worst Investment Ever
                                                                                                        • 9 Valuation Mistakes and How to Avoid Them
                                                                                                        • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                        
                                                                                                        

                                                                                                        Andrew’s online programs

                                                                                                        • Valuation Master Class
                                                                                                        • The Become a Better Investor Community
                                                                                                        • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                        • Finance Made Ridiculously Simple
                                                                                                        • FVMR Investing: Quantamental Investing Across the World
                                                                                                        • Become a Great Presenter and Increase Your Influence
                                                                                                        • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                        • Achieve Your Goals
                                                                                                        
                                                                                                        

                                                                                                        Connect with Andrew Stotz:

                                                                                                        • astotz.com
                                                                                                        • LinkedIn
                                                                                                        • Facebook
                                                                                                        • Instagram
                                                                                                        • Threads
                                                                                                        • Twitter
                                                                                                        • YouTube
                                                                                                        • My Worst Investment Ever Podcast
                                                                                                        
                                                                                                        ]]>c2eb32c2-6e9c-44ea-81af-d0a77ab52b90Wed, 02 Aug 2023 06:00:00 +070014:50falsefullFolarin Daniel Adeboye – Business and Friendship Can Never MixBIO: Folarin Daniel Adeboye was a CEO and Co-Founder at F&K Savings. In 5 years of operations, F&K Savings was able to onboard over 35,000 users while processing over 4 million dollars in transaction volume.

                                                                                                        STORY: Daniel and his partner’s desire to grow F&K Savings fast made them lose substantial money to an investment they blindly entered. This, and other managerial mistakes, caused the business to go under.

                                                                                                        LEARNING: Don’t mix pleasure or family with business. Never forget why you got started.

                                                                                                         

                                                                                                        “Don’t mix pleasure or family with business; stick to basic business principles.”

                                                                                                        Folarin Daniel Adeboye

                                                                                                         

                                                                                                        Guest profile

                                                                                                        Folarin Daniel Adeboye was a CEO and Co-Founder at F&K Savings. In 5 years of operations, F&K Savings was able to onboard over 35,000 users while processing over 4 million dollars in transaction volume. F&K stopped operations due to many factors, some of which were simple mistakes by the management team. Folarin Daniel is currently consulting and branding whilst still open to new opportunities in emerging markets. He’s a tech enthusiast, a financial and business consultant, and determined to help people make better business decisions.

                                                                                                        Worst investment ever

                                                                                                        During his university days, Daniel participated in so many activities in school. He was the Auditor General of his faculty for two years and did some internship jobs with some financial platforms. So Daniel had a basic knowledge of finances. But despite that, Daniel didn’t save any of his pocket money—and he received a lot from my parents. He was a reckless spender in school, and so when he wanted to start a business after university, he didn’t have enough money to start.

                                                                                                        Nevertheless, Daniel went ahead with his business idea because there was a need for his services. He wanted to help young students prepare for their financial future. Daniel partnered with a Ghanaian friend of his, and together, they started F&K Savings.

                                                                                                        This was at that point when startups were coming up and getting funded. The partners felt they could play in this space and do something incredible. And that was how it all started. The business started very well. They had to do everything manually because they were broke. They had to find ways to get things done. The partners got some people on board and shared the dream with them.

                                                                                                        The business had remarkable growth within two years. The partners were getting deals from companies ready to partner with them. That’s where their problems started. Down the road, the partners forgot why they started the business. They now just wanted to grow as fast as other startups did. They badly needed to raise money because they were spending so much on hiring as they needed to build the best app. Funds meant to grow the brand were used to pay people and consulting services.

                                                                                                        The partners started telling people that they were a full-fledged financial institution. They started spending more on setting up an office space. All this fast expansion started affecting the business. The partners had overexposed themselves.

                                                                                                        An investment partner came to Daniel and his partner with a fantastic offer. And since they wanted to grow too fast, they jumped onto this offer because it would give them so much money. Two years after jumping into the proposal, Daniel and his partner lost a considerable percentage of their customers’ funds to this investment after it went down.

                                                                                                        Another major issue the partners faced was that they didn’t have any frameworks in place when they got into the partnership. They simply trusted their abilities and trusted each other. They believed they were young and agile and could do whatever they wanted. So they left a lot of documentation and legal frameworks undone.

                                                                                                        Daniel and his partner did well with customer acquisition and retention. They did well with the cash flow but messed up with basic business principles, which would have allowed them to stay afloat and continue to win the market.

                                                                                                        Lessons learned

                                                                                                        • Don’t mix pleasure or family with business. Stick to basic business principles.
                                                                                                        • Never forget why you got started. As long as you feel connected to what led to the idea/problem you’re going to solve, you’ll keep going.
                                                                                                        • Understand your business environment.
                                                                                                        
                                                                                                        

                                                                                                        Andrew’s takeaways

                                                                                                        • Taking care of clients’ money is a serious business requiring much trust. It’s different from handling your own money.
                                                                                                        
                                                                                                        

                                                                                                        Actionable advice

                                                                                                        Trust yourself and nobody else.

                                                                                                         

                                                                                                        [spp-transcript]

                                                                                                         

                                                                                                        Connect with Folarin Daniel Adeboye

                                                                                                        • LinkedIn
                                                                                                        
                                                                                                        

                                                                                                        Andrew’s books

                                                                                                        • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                        • My Worst Investment Ever
                                                                                                        • 9 Valuation Mistakes and How to Avoid Them
                                                                                                        • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                        
                                                                                                        

                                                                                                        Andrew’s online programs

                                                                                                        • Valuation Master Class
                                                                                                        • The Become a Better Investor Community
                                                                                                        • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                        • Finance Made Ridiculously Simple
                                                                                                        • FVMR Investing: Quantamental Investing Across the World
                                                                                                        • Become a Great Presenter and Increase Your Influence
                                                                                                        • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                        • Achieve Your Goals
                                                                                                        
                                                                                                        

                                                                                                        Connect with Andrew Stotz:

                                                                                                        • astotz.com
                                                                                                        • LinkedIn
                                                                                                        • Facebook
                                                                                                        • Instagram
                                                                                                        • Threads
                                                                                                        • Twitter
                                                                                                        • YouTube
                                                                                                        • My Worst Investment Ever Podcast
                                                                                                        
                                                                                                        ]]>BIO: Folarin Daniel Adeboye was a CEO and Co-Founder at F&K Savings. In 5 years of operations, F&K Savings was able to onboard over 35,000 users while processing over 4 million dollars in transaction volume.

                                                                                                        STORY: Daniel and his partner’s desire to grow F&K Savings fast made them lose substantial money to an investment they blindly entered. This, and other managerial mistakes, caused the business to go under.

                                                                                                        LEARNING: Don’t mix pleasure or family with business. Never forget why you got started.

                                                                                                         

                                                                                                        “Don’t mix pleasure or family with business; stick to basic business principles.”

                                                                                                        Folarin Daniel Adeboye

                                                                                                         

                                                                                                        Guest profile

                                                                                                        Folarin Daniel Adeboye was a CEO and Co-Founder at F&K Savings. In 5 years of operations, F&K Savings was able to onboard over 35,000 users while processing over 4 million dollars in transaction volume. F&K stopped operations due to many factors, some of which were simple mistakes by the management team. Folarin Daniel is currently consulting and branding whilst still open to new opportunities in emerging markets. He’s a tech enthusiast, a financial and business consultant, and determined to help people make better business decisions.

                                                                                                        Worst investment ever

                                                                                                        During his university days, Daniel participated in so many activities in school. He was the Auditor General of his faculty for two years and did some internship jobs with some financial platforms. So Daniel had a basic knowledge of finances. But despite that, Daniel didn’t save any of his pocket money—and he received a lot from my parents. He was a reckless spender in school, and so when he wanted to start a business after university, he didn’t have enough money to start.

                                                                                                        Nevertheless, Daniel went ahead with his business idea because there was a need for his services. He wanted to help young students prepare for their financial future. Daniel partnered with a Ghanaian friend of his, and together, they started F&K Savings.

                                                                                                        This was at that point when startups were coming up and getting funded. The partners felt they could play in this space and do something incredible. And that was how it all started. The business started very well. They had to do everything manually because they were broke. They had to find ways to get things done. The partners got some people on board and shared the dream with them.

                                                                                                        The business had remarkable growth within two years. The partners were getting deals from companies ready to partner with them. That’s where their problems started. Down the road, the partners forgot why they started the business. They now just wanted to grow as fast as other startups did. They badly needed to raise money because they were spending so much on hiring as they needed to build the best app. Funds meant to grow the brand were used to pay people and consulting services.

                                                                                                        The partners started telling people that they were a full-fledged financial institution. They started spending more on setting up an office space. All this fast expansion started affecting the business. The partners had overexposed themselves.

                                                                                                        An investment partner came to Daniel and his partner with a fantastic offer. And since they wanted to grow too fast, they jumped onto this offer because it would give them so much money. Two years after jumping into the proposal, Daniel and his partner lost a considerable percentage of their customers’ funds to this investment after it went down.

                                                                                                        Another major issue the partners faced was that they didn’t have any frameworks in place when they got into the partnership. They simply trusted their abilities and trusted each other. They believed they were young and agile and could do whatever they wanted. So they left a lot of documentation and legal frameworks undone.

                                                                                                        Daniel and his partner did well with customer acquisition and retention. They did well with the cash flow but messed up with basic business principles, which would have allowed them to stay afloat and continue to win the market.

                                                                                                        Lessons learned

                                                                                                        • Don’t mix pleasure or family with business. Stick to basic business principles.
                                                                                                        • Never forget why you got started. As long as you feel connected to what led to the idea/problem you’re going to solve, you’ll keep going.
                                                                                                        • Understand your business environment.
                                                                                                        
                                                                                                        

                                                                                                        Andrew’s takeaways

                                                                                                        • Taking care of clients’ money is a serious business requiring much trust. It’s different from handling your own money.
                                                                                                        
                                                                                                        

                                                                                                        Actionable advice

                                                                                                        Trust yourself and nobody else.

                                                                                                         

                                                                                                        [spp-transcript]

                                                                                                         

                                                                                                        Connect with Folarin Daniel Adeboye

                                                                                                        • LinkedIn
                                                                                                        
                                                                                                        

                                                                                                        Andrew’s books

                                                                                                        • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                        • My Worst Investment Ever
                                                                                                        • 9 Valuation Mistakes and How to Avoid Them
                                                                                                        • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                        
                                                                                                        

                                                                                                        Andrew’s online programs

                                                                                                        • Valuation Master Class
                                                                                                        • The Become a Better Investor Community
                                                                                                        • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                        • Finance Made Ridiculously Simple
                                                                                                        • FVMR Investing: Quantamental Investing Across the World
                                                                                                        • Become a Great Presenter and Increase Your Influence
                                                                                                        • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                        • Achieve Your Goals
                                                                                                        
                                                                                                        

                                                                                                        Connect with Andrew Stotz:

                                                                                                        • astotz.com
                                                                                                        • LinkedIn
                                                                                                        • Facebook
                                                                                                        • Instagram
                                                                                                        • Threads
                                                                                                        • Twitter
                                                                                                        • YouTube
                                                                                                        • My Worst Investment Ever Podcast
                                                                                                        
                                                                                                        ]]>4986e913-63f8-422a-b445-2ac2fd48dafbMon, 31 Jul 2023 06:00:00 +070028:49falsefullDana Anspach – Loving a Product Is Different From Running a BusinessBIO: Dana Anspach is the founder and CEO of Sensible Money, LLC, a firm specializing in retirement income planning. In 2022, Sensible Money ranked on the Inc. 5000 list of fastest-growing privately owned companies in the U.S.

                                                                                                        STORY: Dana loved a fitness product so much that she decided to open her own franchise. Soon enough, she discovered running a business is so much different from loving its product. She sold the company at a loss.

                                                                                                        LEARNING: Just because a product is great doesn’t mean the business will succeed. Instead of opening a second business, create a new revenue stream in your existing one.

                                                                                                         

                                                                                                        “Just because you love the product doesn’t mean the business itself will be highly profitable.”

                                                                                                        Dana Anspach

                                                                                                         

                                                                                                        Guest profile

                                                                                                        Dana Anspach is the founder and CEO of Sensible Money, LLC, a firm specializing in retirement income planning. In 2022, Sensible Money ranked on the Inc. 5000 list of fastest-growing privately owned companies in the U.S.

                                                                                                        She is the author of How to Plan for the Perfect Retirement, a lecture series on The Great Courses and Control Your Retirement Destiny, available on Amazon. She has hundreds of articles online and numerous educational webinars on YouTube. Because of her continuing contributions to financial literacy, Investopedia named her three times to the country’s Top 100 Financial Advisors.

                                                                                                        Worst investment ever

                                                                                                        Fitness has been part of Dana’s life. One of her best friends married a man who founded a fitness franchise called Rockbox Fitness. When her friend moved to North Carolina, Dana and her fiancee visited. They went to check out Rockbox, and it was terrific. This was the best workout she’d ever been to.

                                                                                                        The couple inquired how much it costs to open a franchise, and they felt the franchise fee was reasonable. The price was about $40,000 at the time. The couple decided to open a franchise since there were none in the Phoenix area. They signed up to open four because of economies of scale—they wouldn’t profit from one.

                                                                                                        They found a beautiful location a mile from their house, did the pre-sales, followed the program exactly, and opened their franchise in October 2019. They had the most successful opening that the franchise had had so far. Running the gyms turned out to be more exhausting than Dana had anticipated.

                                                                                                        She thought it was all about handling the financials, payroll, and stuff that could be done in the background. But the gym required her to be at the forefront too. Not only that, they were open for less than six months when COVID hit. They had to shut down for eight weeks. They reopened for about four weeks and then got shut down again. At that point, Dana decided this wasn’t going to work.

                                                                                                        Eventually, they found a buyer for the franchise. The sale was substantially less than what the couple had put into it. Getting the franchise open cost about $400,000; they sold it for just $100,000.

                                                                                                        Lessons learned

                                                                                                        • Loving a product and being thrilled with the daily running of the business and making it profitable are two different things.
                                                                                                        • Just because a product is great doesn’t mean the business will be a success.
                                                                                                        
                                                                                                        

                                                                                                        Andrew’s takeaways

                                                                                                        • Instead of opening a second business, create a new revenue stream in your existing one and make sure it’s five times higher.
                                                                                                        
                                                                                                        

                                                                                                        Actionable advice

                                                                                                        If you have a financial planner, run your investment ideas by them and listen to them.

                                                                                                        Dana’s recommendations

                                                                                                        When it comes to investing, Dana recommends her go-to books, The Four Pillars of Investing, The Behavior Gap, and The Psychology of Money. She also recommends visiting her website Sensible Money which has a learning page with all kinds of resources you can download. She also hosts a free webinar about every six weeks.

                                                                                                        No.1 goal for the next 12 months

                                                                                                        Dana’s number one goal for the next 12 months is to focus on the next growth phase for the business.

                                                                                                        Parting words

                                                                                                         

                                                                                                        “It’s been wonderful to be here. Thank you.”

                                                                                                        Dana Anspach

                                                                                                         

                                                                                                        [spp-transcript]

                                                                                                         

                                                                                                        Connect with Dana Anspach

                                                                                                        • LinkedIn
                                                                                                        • Twitter
                                                                                                        • YouTube
                                                                                                        • Website
                                                                                                        • Podcast
                                                                                                        • Books
                                                                                                        
                                                                                                        

                                                                                                        Andrew’s books

                                                                                                        • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                        • My Worst Investment Ever
                                                                                                        • 9 Valuation Mistakes and How to Avoid Them
                                                                                                        • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                        
                                                                                                        

                                                                                                        Andrew’s online programs

                                                                                                        • Valuation Master Class
                                                                                                        • The Become a Better Investor Community
                                                                                                        • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                        • Finance Made Ridiculously Simple
                                                                                                        • FVMR Investing: Quantamental Investing Across the World
                                                                                                        • Become a Great Presenter and Increase Your Influence
                                                                                                        • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                        • Achieve Your Goals
                                                                                                        
                                                                                                        

                                                                                                        Connect with Andrew Stotz:

                                                                                                        • astotz.com
                                                                                                        • LinkedIn
                                                                                                        • Facebook
                                                                                                        • Instagram
                                                                                                        • Threads
                                                                                                        • Twitter
                                                                                                        • YouTube
                                                                                                        • My Worst Investment Ever Podcast
                                                                                                        
                                                                                                        ]]>BIO: Dana Anspach is the founder and CEO of Sensible Money, LLC, a firm specializing in retirement income planning. In 2022, Sensible Money ranked on the Inc. 5000 list of fastest-growing privately owned companies in the U.S.

                                                                                                        STORY: Dana loved a fitness product so much that she decided to open her own franchise. Soon enough, she discovered running a business is so much different from loving its product. She sold the company at a loss.

                                                                                                        LEARNING: Just because a product is great doesn’t mean the business will succeed. Instead of opening a second business, create a new revenue stream in your existing one.

                                                                                                         

                                                                                                        “Just because you love the product doesn’t mean the business itself will be highly profitable.”

                                                                                                        Dana Anspach

                                                                                                         

                                                                                                        Guest profile

                                                                                                        Dana Anspach is the founder and CEO of Sensible Money, LLC, a firm specializing in retirement income planning. In 2022, Sensible Money ranked on the Inc. 5000 list of fastest-growing privately owned companies in the U.S.

                                                                                                        She is the author of How to Plan for the Perfect Retirement, a lecture series on The Great Courses and Control Your Retirement Destiny, available on Amazon. She has hundreds of articles online and numerous educational webinars on YouTube. Because of her continuing contributions to financial literacy, Investopedia named her three times to the country’s Top 100 Financial Advisors.

                                                                                                        Worst investment ever

                                                                                                        Fitness has been part of Dana’s life. One of her best friends married a man who founded a fitness franchise called Rockbox Fitness. When her friend moved to North Carolina, Dana and her fiancee visited. They went to check out Rockbox, and it was terrific. This was the best workout she’d ever been to.

                                                                                                        The couple inquired how much it costs to open a franchise, and they felt the franchise fee was reasonable. The price was about $40,000 at the time. The couple decided to open a franchise since there were none in the Phoenix area. They signed up to open four because of economies of scale—they wouldn’t profit from one.

                                                                                                        They found a beautiful location a mile from their house, did the pre-sales, followed the program exactly, and opened their franchise in October 2019. They had the most successful opening that the franchise had had so far. Running the gyms turned out to be more exhausting than Dana had anticipated.

                                                                                                        She thought it was all about handling the financials, payroll, and stuff that could be done in the background. But the gym required her to be at the forefront too. Not only that, they were open for less than six months when COVID hit. They had to shut down for eight weeks. They reopened for about four weeks and then got shut down again. At that point, Dana decided this wasn’t going to work.

                                                                                                        Eventually, they found a buyer for the franchise. The sale was substantially less than what the couple had put into it. Getting the franchise open cost about $400,000; they sold it for just $100,000.

                                                                                                        Lessons learned

                                                                                                        • Loving a product and being thrilled with the daily running of the business and making it profitable are two different things.
                                                                                                        • Just because a product is great doesn’t mean the business will be a success.
                                                                                                        
                                                                                                        

                                                                                                        Andrew’s takeaways

                                                                                                        • Instead of opening a second business, create a new revenue stream in your existing one and make sure it’s five times higher.
                                                                                                        
                                                                                                        

                                                                                                        Actionable advice

                                                                                                        If you have a financial planner, run your investment ideas by them and listen to them.

                                                                                                        Dana’s recommendations

                                                                                                        When it comes to investing, Dana recommends her go-to books, The Four Pillars of Investing, The Behavior Gap, and The Psychology of Money. She also recommends visiting her website Sensible Money which has a learning page with all kinds of resources you can download. She also hosts a free webinar about every six weeks.

                                                                                                        No.1 goal for the next 12 months

                                                                                                        Dana’s number one goal for the next 12 months is to focus on the next growth phase for the business.

                                                                                                        Parting words

                                                                                                         

                                                                                                        “It’s been wonderful to be here. Thank you.”

                                                                                                        Dana Anspach

                                                                                                         

                                                                                                        [spp-transcript]

                                                                                                         

                                                                                                        Connect with Dana Anspach

                                                                                                        • LinkedIn
                                                                                                        • Twitter
                                                                                                        • YouTube
                                                                                                        • Website
                                                                                                        • Podcast
                                                                                                        • Books
                                                                                                        
                                                                                                        

                                                                                                        Andrew’s books

                                                                                                        • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                        • My Worst Investment Ever
                                                                                                        • 9 Valuation Mistakes and How to Avoid Them
                                                                                                        • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                        
                                                                                                        

                                                                                                        Andrew’s online programs

                                                                                                        • Valuation Master Class
                                                                                                        • The Become a Better Investor Community
                                                                                                        • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                        • Finance Made Ridiculously Simple
                                                                                                        • FVMR Investing: Quantamental Investing Across the World
                                                                                                        • Become a Great Presenter and Increase Your Influence
                                                                                                        • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                        • Achieve Your Goals
                                                                                                        
                                                                                                        

                                                                                                        Connect with Andrew Stotz:

                                                                                                        • astotz.com
                                                                                                        • LinkedIn
                                                                                                        • Facebook
                                                                                                        • Instagram
                                                                                                        • Threads
                                                                                                        • Twitter
                                                                                                        • YouTube
                                                                                                        • My Worst Investment Ever Podcast
                                                                                                        
                                                                                                        ]]>7eae233d-5aed-4a88-b891-81ef1d476079Fri, 28 Jul 2023 06:00:00 +070027:31falsefullISMS 27: Larry Swedroe – Familiar Doesn’t Make It Safe and You’re Not Playing With the House’s MoneyIn this episode of Investment Strategy Made Simple (ISMS), Andrew and Larry discuss three chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this eighth episode, they discuss mistake number 13: Do you confuse the familiar with the safe? Mistake number 14: Do you believe you’re playing with the house’s money? And mistake number 15: Do you let friendship influence your choice of investment advisors?

                                                                                                        LEARNING: Just because you’re familiar with something doesn’t make it less risky. Diversify globally to get the real benefits of diversification. Your financial advisor is not your friend; it’s a business. Value and protect your investment gains as much as you value and protect the principle.

                                                                                                         

                                                                                                        “We’re all human beings and have made these mistakes. What differentiates smart people from others is that they don’t repeat the same behavior when they learn it’s a mistake. They change it. They become aware of investment biases and overcome them either on their own or with the help of a trusted financial advisor.”

                                                                                                        Larry Swedroe

                                                                                                         

                                                                                                        In today’s episode, Andrew continues his discussion with Larry Swedroe, head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                                                        Larry deeply understands the world of academic research and investing, especially risk. Today Andrew and Larry discuss a chapter of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this eighth episode, they discuss mistake number 13: Do you confuse the familiar with the safe? Mistake number 14: Do you believe you’re playing with the house’s money? And mistake number 15: Do you let friendship influence your choice of investment advisors?

                                                                                                        Missed out on previous mistakes? Check them out:

                                                                                                        • ISMS 8: Larry Swedroe – Are You Overconfident in Your Skills?
                                                                                                        • ISMS 17: Larry Swedroe – Do You Project Recent Trends Indefinitely Into the Future?
                                                                                                        • ISMS 20: Larry Swedroe – Do You Extrapolate From Small Samples and Trust Your Intuition?
                                                                                                        • ISMS 23: Larry Swedroe – Do You Allow Yourself to Be Influenced by Your Ego and Herd Mentality?
                                                                                                        • ISMS 24: Larry Swedroe – Confusing Skill and Luck Can Stop You From Investing Wisely
                                                                                                        • ISMS 25: Larry Swedroe – Admit Your Mistakes and Don’t Listen to Fake Experts
                                                                                                        • ISMS 26: Larry Swedroe – Are You Subject to the Endowment Effect or the Hot Streak Fallacy?
                                                                                                        
                                                                                                        

                                                                                                        Mistake number 13: Do you confuse the familiar with the safe?

                                                                                                        People tend to double up on investments they’re familiar with compared to new companies. But according to Larry, knowing about something doesn’t make it safer. When it comes to risk, people think of something they’re familiar with as safer. When they’re less familiar with it, it becomes more uncertain.

                                                                                                        People over-allocate to their domestic stock market and underweight international stocks. This bias causes investors to be overconfident and take too much risk by concentrating on assets they’re most familiar with.

                                                                                                        To avoid this bias, the guiding principle is that just because you’re familiar with something doesn’t make it less risky. Diversify globally to get the real benefits of diversification.

                                                                                                        Mistake number 14: Do you believe you’re playing with the house’s money?

                                                                                                        To explain this mistake, Larry uses the story of the man in the green bathrobe. In the story, a newlywed couple goes to Las Vegas on their honeymoon. Being intelligent, they set aside $1,000 as their gambling money for their week in Las Vegas.

                                                                                                        Unfortunately, by the end of the second night, they’d blown the entire $1,000. At the end of that night, the husband was getting ready to go to bed when he saw a little shiny object on the dresser. He picked it up, and it was a $5 chip. The man saw this as a sign to go to a roulette wheel and use that chip. So he quietly left the room and took a cab to the nearest local casino.

                                                                                                        The man put the $5 chip on the number 17 because that was the number on the chip. At 35 to-one odds, he won. He played again and won. The man won about five times and now had $6.1 million.

                                                                                                        A huge crowd had gathered around the table to watch the man play again. The roulette dealer spun the wheel, and it looked like it would drop on 17. Then it fell over the next number. The man lost all his winnings. Because he was in such a hurry when he left his room, the man was still wearing the hotel’s green bathrobe—in which he had to walk back to his hotel and explain to his wife what’s happened. He tried to sneak in, but his wife was awake. He told her that he’d gone to the casino. She asked how it went, and he said he’d lost five bucks.

                                                                                                        The man’s problem was thinking that he didn’t lose $6 million because it wasn’t his money but the house’s money. Now, if someone had given him a check for $6 million, there’s no way he would have bet it on the roulette wheel.

                                                                                                        When it comes to investing, Larry says that most people are lucky to find stock at low prices. But when the stocks become winners, they don’t see the gains made as their money. So majority never feel the need to protect their profits and end up losing them.

                                                                                                        Mistake number 15: Do you let friendship influence your choice of investment advisors?

                                                                                                        Many investors will often hire financial advisors who are their friends. Their decision is not based on facts but on emotion. They’ll continue depending on the financial advisor even when their investments perform poorly. They won’t fire them because they’re friends. The truth is that they’re only your friend because they’re making commissions or other fees off of you. Friendships have caused people so much of their fortunes unnecessarily.

                                                                                                        About Larry Swedroe

                                                                                                        Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                                                        Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                                                        Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                                                        Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                                                         

                                                                                                        [spp-transcript]

                                                                                                         

                                                                                                        Connect with Larry Swedroe

                                                                                                        • LinkedIn
                                                                                                        • Twitter
                                                                                                        • Website
                                                                                                        • Books
                                                                                                        
                                                                                                        

                                                                                                        Andrew’s books

                                                                                                        • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                        • My Worst Investment Ever
                                                                                                        • 9 Valuation Mistakes and How to Avoid...]]>In this episode of Investment Strategy Made Simple (ISMS), Andrew and Larry discuss three chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this eighth episode, they discuss mistake number 13: Do you confuse the familiar with the safe? Mistake number 14: Do you believe you’re playing with the house’s money? And mistake number 15: Do you let friendship influence your choice of investment advisors?

                                                                                                          LEARNING: Just because you’re familiar with something doesn’t make it less risky. Diversify globally to get the real benefits of diversification. Your financial advisor is not your friend; it’s a business. Value and protect your investment gains as much as you value and protect the principle.

                                                                                                           

                                                                                                          “We’re all human beings and have made these mistakes. What differentiates smart people from others is that they don’t repeat the same behavior when they learn it’s a mistake. They change it. They become aware of investment biases and overcome them either on their own or with the help of a trusted financial advisor.”

                                                                                                          Larry Swedroe

                                                                                                           

                                                                                                          In today’s episode, Andrew continues his discussion with Larry Swedroe, head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                                                          Larry deeply understands the world of academic research and investing, especially risk. Today Andrew and Larry discuss a chapter of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this eighth episode, they discuss mistake number 13: Do you confuse the familiar with the safe? Mistake number 14: Do you believe you’re playing with the house’s money? And mistake number 15: Do you let friendship influence your choice of investment advisors?

                                                                                                          Missed out on previous mistakes? Check them out:

                                                                                                          • ISMS 8: Larry Swedroe – Are You Overconfident in Your Skills?
                                                                                                          • ISMS 17: Larry Swedroe – Do You Project Recent Trends Indefinitely Into the Future?
                                                                                                          • ISMS 20: Larry Swedroe – Do You Extrapolate From Small Samples and Trust Your Intuition?
                                                                                                          • ISMS 23: Larry Swedroe – Do You Allow Yourself to Be Influenced by Your Ego and Herd Mentality?
                                                                                                          • ISMS 24: Larry Swedroe – Confusing Skill and Luck Can Stop You From Investing Wisely
                                                                                                          • ISMS 25: Larry Swedroe – Admit Your Mistakes and Don’t Listen to Fake Experts
                                                                                                          • ISMS 26: Larry Swedroe – Are You Subject to the Endowment Effect or the Hot Streak Fallacy?
                                                                                                          
                                                                                                          

                                                                                                          Mistake number 13: Do you confuse the familiar with the safe?

                                                                                                          People tend to double up on investments they’re familiar with compared to new companies. But according to Larry, knowing about something doesn’t make it safer. When it comes to risk, people think of something they’re familiar with as safer. When they’re less familiar with it, it becomes more uncertain.

                                                                                                          People over-allocate to their domestic stock market and underweight international stocks. This bias causes investors to be overconfident and take too much risk by concentrating on assets they’re most familiar with.

                                                                                                          To avoid this bias, the guiding principle is that just because you’re familiar with something doesn’t make it less risky. Diversify globally to get the real benefits of diversification.

                                                                                                          Mistake number 14: Do you believe you’re playing with the house’s money?

                                                                                                          To explain this mistake, Larry uses the story of the man in the green bathrobe. In the story, a newlywed couple goes to Las Vegas on their honeymoon. Being intelligent, they set aside $1,000 as their gambling money for their week in Las Vegas.

                                                                                                          Unfortunately, by the end of the second night, they’d blown the entire $1,000. At the end of that night, the husband was getting ready to go to bed when he saw a little shiny object on the dresser. He picked it up, and it was a $5 chip. The man saw this as a sign to go to a roulette wheel and use that chip. So he quietly left the room and took a cab to the nearest local casino.

                                                                                                          The man put the $5 chip on the number 17 because that was the number on the chip. At 35 to-one odds, he won. He played again and won. The man won about five times and now had $6.1 million.

                                                                                                          A huge crowd had gathered around the table to watch the man play again. The roulette dealer spun the wheel, and it looked like it would drop on 17. Then it fell over the next number. The man lost all his winnings. Because he was in such a hurry when he left his room, the man was still wearing the hotel’s green bathrobe—in which he had to walk back to his hotel and explain to his wife what’s happened. He tried to sneak in, but his wife was awake. He told her that he’d gone to the casino. She asked how it went, and he said he’d lost five bucks.

                                                                                                          The man’s problem was thinking that he didn’t lose $6 million because it wasn’t his money but the house’s money. Now, if someone had given him a check for $6 million, there’s no way he would have bet it on the roulette wheel.

                                                                                                          When it comes to investing, Larry says that most people are lucky to find stock at low prices. But when the stocks become winners, they don’t see the gains made as their money. So majority never feel the need to protect their profits and end up losing them.

                                                                                                          Mistake number 15: Do you let friendship influence your choice of investment advisors?

                                                                                                          Many investors will often hire financial advisors who are their friends. Their decision is not based on facts but on emotion. They’ll continue depending on the financial advisor even when their investments perform poorly. They won’t fire them because they’re friends. The truth is that they’re only your friend because they’re making commissions or other fees off of you. Friendships have caused people so much of their fortunes unnecessarily.

                                                                                                          About Larry Swedroe

                                                                                                          Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                                                          Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                                                          Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                                                          Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                                                           

                                                                                                          [spp-transcript]

                                                                                                           

                                                                                                          Connect with Larry Swedroe

                                                                                                          • LinkedIn
                                                                                                          • Twitter
                                                                                                          • Website
                                                                                                          • Books
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s books

                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • My Worst Investment Ever
                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s online programs

                                                                                                          • Valuation Master Class
                                                                                                          • The Become a Better Investor Community
                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • Finance Made Ridiculously Simple
                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                          • Achieve Your Goals
                                                                                                          
                                                                                                          

                                                                                                          Connect with Andrew Stotz:

                                                                                                          • astotz.com
                                                                                                          • LinkedIn
                                                                                                          • Facebook
                                                                                                          • Instagram
                                                                                                          • Twitter
                                                                                                          • YouTube
                                                                                                          • My Worst Investment Ever Podcast
                                                                                                          
                                                                                                          

                                                                                                          Further reading mentioned

                                                                                                          • Larry Swedroe and RC Balaban, Investment Mistakes Even Smart Investors Make and How to Avoid Them
                                                                                                          • Philip E. Tetlock, Expert Political Judgment: How Good Is It? How Can We Know?
                                                                                                          • Carol Tavris and Elliot Aronson, Mistakes Were Made (But Not by Me): Third Edition: Why We Justify Foolish Beliefs, Bad Decisions, and Hurtful Acts
                                                                                                          • Gary Belsky and Thomas Gilovich, Why Smart People Make Big Money Mistakes and How to Correct Them: Lessons from the Life-Changing Science of Behavioral Economics
                                                                                                          
                                                                                                          ]]>1956a2bc-ce76-4b2a-b9d1-3866a1c3b00bTue, 25 Jul 2023 06:00:00 +070050:15falsefullManisha Thakor – Invest in Your Financial Health and Emotional WealthBIO: Manisha Thakor has worked in financial services for over 30 years, focusing on women’s economic empowerment.

                                                                                                          STORY: From a very young age, Manisha equated her self-worth to her achievements. This led her to overwork herself almost to death—twice.

                                                                                                          LEARNING: Don’t underestimate the incredible power of the net present value of your future earnings. Invest concurrently in your financial health and your emotional wealth.

                                                                                                           

                                                                                                          “Investing concurrently in your financial health and your emotional wealth is the secret formula to maximizing the NPV of your potential future earning stream.”

                                                                                                          Manisha Thakor

                                                                                                           

                                                                                                          Guest profile

                                                                                                          Manisha Thakor has worked in financial services for over 30 years with a focus on women’s economic empowerment. A nationally recognized thought leader around the issues of financial literacy and education, Manisha has been featured in national media such as The Wall Street Journal, The New York Times, Barron’s, CNN, and CNBC. She has written two personal finance books for women in their 20s and 30s. Her latest book MoneyZen: The Secret to Finding Your “Enough,” comes out on August 8th, 2023. Manisha earned her MBA from Harvard Business School and her BA from Wellesley College. She also holds the CFA and CFP designations.

                                                                                                          Worst investment ever

                                                                                                          Growing up, Manisha lived in a small town in Indiana. Being mixed race, she got picked on a lot, particularly in grades four, five, and six. Those formative years put her on the search for a sense of belonging. The cheerleaders and football players didn’t like Manisha, but the teachers did because she worked hard and got good grades. So Manisha started getting endorphin high from teachers’ approvals and getting good grades. She kept studying and going after those grades because they made her feel whole and worth something in a way that she didn’t feel socially.

                                                                                                          When Manisha entered finance, she realized there were no teachers or grades, just bosses and money. And so, she developed a profoundly toxic relationship with work, money, success, and accomplishments. Manisha had come to identify her self-worth in her school years with grades. In her professional years, Manisha placed her self-worth in her net worth. Because Manisha was so locked into her identity and sense of self-worth as her achievements at work, she didn’t have friends or hobbies. She worked seven days a week and traveled 40 weeks a year for a decade.

                                                                                                          One day she was sitting on a plane and had tears streaming down her face. She had piles of paperwork on her small tray that she was trying to work on. All Manisha could think of was that she had no idea how she would make it through the next 48 hours of meetings because she had no energy left.

                                                                                                          A lady sitting across from Manisha came and gave her this look like she knew what she was going through. The lady opened this expensive-looking silver pill case and pulled out three yellow pills. She handed them to Manisha and told her to take just half a pill. Manisha grabbed the pills like candy. She didn’t even ask what she was putting in her mouth. Turns out it was Valium, and it helped. Manisha was able to calm down. She took another pill the following day and made it through her meetings.

                                                                                                          Manisha kept this life going until she had two near-death experiences. Both times Manisha wished she’d spent more time with family, that she’d not missed her grandmother’s funeral or the many weddings because she had meetings that were so important.

                                                                                                          The second near-death experience was her big wake-up call. Manisha had reached this point where she could only stay awake for about five to six hours daily. She found out her body was attacking itself. It took Manisha nine months to get her energy back. During this period, she realized that she had spent the entirety of her adult life on this 24/7 hamster wheel of hustle culture. Manisha was so driven by this mental model of self-worth equals net worth that she didn’t understand the power of the net present value of her future earnings.

                                                                                                          Lessons learned

                                                                                                          • What we have that’s entirely our own, and we have enormous control over, is our brain and how we use it to generate our future income.
                                                                                                          • Don’t underestimate the incredible power of the net present value of your future earnings. Always protect it.
                                                                                                          • Investing concurrently in your financial health and emotional wealth is the secret formula to maximizing the NPV of your potential future earning stream.
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s takeaways

                                                                                                          • Don’t be internally driven to work seven days a week. Get away from that.
                                                                                                          • When pressure is on, step back and take time.
                                                                                                          
                                                                                                          

                                                                                                          No.1 goal for the next 12 months

                                                                                                          Manisha’s number one goal for the next 12 months is to achieve less.

                                                                                                          Parting words

                                                                                                           

                                                                                                          “If people think that this may be a problem for them, but they’re not quite sure, I put together a really fun quiz at MoneyZen.com. Check it out and see if you’ve gone down the rabbit hole. I want to help pull you out.”

                                                                                                          Manisha Thakor

                                                                                                           

                                                                                                          [spp-transcript]

                                                                                                           

                                                                                                          Connect with Manisha Thakor

                                                                                                          • LinkedIn
                                                                                                          • Twitter
                                                                                                          • Facebook
                                                                                                          • Instagram
                                                                                                          • YouTube
                                                                                                          • Website
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s books

                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • My Worst Investment Ever
                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s online programs

                                                                                                          • Valuation Master Class
                                                                                                          • The Become a Better Investor Community
                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • Finance Made Ridiculously Simple
                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                          • Achieve Your Goals
                                                                                                          
                                                                                                          

                                                                                                          Connect with Andrew Stotz:

                                                                                                          • astotz.com
                                                                                                          • LinkedIn
                                                                                                          • Facebook
                                                                                                          • Instagram
                                                                                                          • Threads
                                                                                                          • Twitter
                                                                                                          • YouTube
                                                                                                          • My Worst Investment Ever Podcast
                                                                                                          
                                                                                                          ]]>BIO: Manisha Thakor has worked in financial services for over 30 years, focusing on women’s economic empowerment.

                                                                                                          STORY: From a very young age, Manisha equated her self-worth to her achievements. This led her to overwork herself almost to death—twice.

                                                                                                          LEARNING: Don’t underestimate the incredible power of the net present value of your future earnings. Invest concurrently in your financial health and your emotional wealth.

                                                                                                           

                                                                                                          “Investing concurrently in your financial health and your emotional wealth is the secret formula to maximizing the NPV of your potential future earning stream.”

                                                                                                          Manisha Thakor

                                                                                                           

                                                                                                          Guest profile

                                                                                                          Manisha Thakor has worked in financial services for over 30 years with a focus on women’s economic empowerment. A nationally recognized thought leader around the issues of financial literacy and education, Manisha has been featured in national media such as The Wall Street Journal, The New York Times, Barron’s, CNN, and CNBC. She has written two personal finance books for women in their 20s and 30s. Her latest book MoneyZen: The Secret to Finding Your “Enough,” comes out on August 8th, 2023. Manisha earned her MBA from Harvard Business School and her BA from Wellesley College. She also holds the CFA and CFP designations.

                                                                                                          Worst investment ever

                                                                                                          Growing up, Manisha lived in a small town in Indiana. Being mixed race, she got picked on a lot, particularly in grades four, five, and six. Those formative years put her on the search for a sense of belonging. The cheerleaders and football players didn’t like Manisha, but the teachers did because she worked hard and got good grades. So Manisha started getting endorphin high from teachers’ approvals and getting good grades. She kept studying and going after those grades because they made her feel whole and worth something in a way that she didn’t feel socially.

                                                                                                          When Manisha entered finance, she realized there were no teachers or grades, just bosses and money. And so, she developed a profoundly toxic relationship with work, money, success, and accomplishments. Manisha had come to identify her self-worth in her school years with grades. In her professional years, Manisha placed her self-worth in her net worth. Because Manisha was so locked into her identity and sense of self-worth as her achievements at work, she didn’t have friends or hobbies. She worked seven days a week and traveled 40 weeks a year for a decade.

                                                                                                          One day she was sitting on a plane and had tears streaming down her face. She had piles of paperwork on her small tray that she was trying to work on. All Manisha could think of was that she had no idea how she would make it through the next 48 hours of meetings because she had no energy left.

                                                                                                          A lady sitting across from Manisha came and gave her this look like she knew what she was going through. The lady opened this expensive-looking silver pill case and pulled out three yellow pills. She handed them to Manisha and told her to take just half a pill. Manisha grabbed the pills like candy. She didn’t even ask what she was putting in her mouth. Turns out it was Valium, and it helped. Manisha was able to calm down. She took another pill the following day and made it through her meetings.

                                                                                                          Manisha kept this life going until she had two near-death experiences. Both times Manisha wished she’d spent more time with family, that she’d not missed her grandmother’s funeral or the many weddings because she had meetings that were so important.

                                                                                                          The second near-death experience was her big wake-up call. Manisha had reached this point where she could only stay awake for about five to six hours daily. She found out her body was attacking itself. It took Manisha nine months to get her energy back. During this period, she realized that she had spent the entirety of her adult life on this 24/7 hamster wheel of hustle culture. Manisha was so driven by this mental model of self-worth equals net worth that she didn’t understand the power of the net present value of her future earnings.

                                                                                                          Lessons learned

                                                                                                          • What we have that’s entirely our own, and we have enormous control over, is our brain and how we use it to generate our future income.
                                                                                                          • Don’t underestimate the incredible power of the net present value of your future earnings. Always protect it.
                                                                                                          • Investing concurrently in your financial health and emotional wealth is the secret formula to maximizing the NPV of your potential future earning stream.
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s takeaways

                                                                                                          • Don’t be internally driven to work seven days a week. Get away from that.
                                                                                                          • When pressure is on, step back and take time.
                                                                                                          
                                                                                                          

                                                                                                          No.1 goal for the next 12 months

                                                                                                          Manisha’s number one goal for the next 12 months is to achieve less.

                                                                                                          Parting words

                                                                                                           

                                                                                                          “If people think that this may be a problem for them, but they’re not quite sure, I put together a really fun quiz at MoneyZen.com. Check it out and see if you’ve gone down the rabbit hole. I want to help pull you out.”

                                                                                                          Manisha Thakor

                                                                                                           

                                                                                                          [spp-transcript]

                                                                                                           

                                                                                                          Connect with Manisha Thakor

                                                                                                          • LinkedIn
                                                                                                          • Twitter
                                                                                                          • Facebook
                                                                                                          • Instagram
                                                                                                          • YouTube
                                                                                                          • Website
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s books

                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • My Worst Investment Ever
                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s online programs

                                                                                                          • Valuation Master Class
                                                                                                          • The Become a Better Investor Community
                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • Finance Made Ridiculously Simple
                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                          • Achieve Your Goals
                                                                                                          
                                                                                                          

                                                                                                          Connect with Andrew Stotz:

                                                                                                          • astotz.com
                                                                                                          • LinkedIn
                                                                                                          • Facebook
                                                                                                          • Instagram
                                                                                                          • Threads
                                                                                                          • Twitter
                                                                                                          • YouTube
                                                                                                          • My Worst Investment Ever Podcast
                                                                                                          
                                                                                                          ]]>0bdfef62-ccd0-4e40-b256-96e10db40499Mon, 24 Jul 2023 06:00:00 +070030:25falsefullRichard Smith – Anything Valuable Is HardBIO: Dr. Richard Smith – Berkeley Mathematician and Ph.D. in System Science – is a fintech entrepreneur, the CEO of The Foundation for the Study of Cycles, and cofounder of the investment tool Finiac.

                                                                                                          STORY: Richard invested his entire live savings ($10,000), and in 18 months, it had grown to $40,000. Then suddenly, the investment went down to $30,000. He believed it would go up again, so he held on. Then it went further down to $20,000. Richard kept waiting. Eventually, it went to $10,000, and that’s when he panicked and took out all his money.

                                                                                                          LEARNING: Integrate trailing stops. It’s hard to do the right thing in the markets.

                                                                                                           

                                                                                                          “The markets wouldn’t be as interesting or as potentially valuable if it wasn’t hard. Anything valuable is hard.”

                                                                                                          Richard Smith

                                                                                                           

                                                                                                          Guest profile

                                                                                                          Dr. Richard Smith – Berkeley Mathematician and Ph.D. in System Science – is a fintech entrepreneur, the CEO of The Foundation for the Study of Cycles, and cofounder of the investment tool Finiac.

                                                                                                          Richard has built a reputation as “The Doctor of Uncertainty” amongst his academic peers and has helped government agencies and Fortune 500 companies make sense of complex data sets.

                                                                                                          With his background in mathematical theories of uncertainty combined with his investing and trading experience, he is a regular speaker and lecturer and particularly enjoys opportunities to share his knowledge and help others gain an edge in the market.

                                                                                                          Worst investment ever

                                                                                                          In 1998/99, during the Dotcom boom, Richard had just started investing while in graduate school. In about 18 months, he’d managed to get his investment account up from $10,000 (his life savings at the time) to $40,000. Richard was over the moon and felt like a real expert investor.

                                                                                                          Then in March of 2000, all of a sudden, his $40,000 fell to $30,000 practically overnight. Though a significant loss, Richard decided to hold onto the investment and wait until it returned to $35,000. But instead, it went down to $20,000. Again, he said he’d get out when it gets back to $25,000. Finally, it went down to $10,000, and at that point, Richard panicked and got all his money out of the market.

                                                                                                          Lessons learned

                                                                                                          • Integrate trailing stops.
                                                                                                          • It’s hard to do the right thing in the markets.
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s takeaways

                                                                                                          • As a new investor, protect your capital first. This allows you to stay in the game, keep learning, and win over time.
                                                                                                          
                                                                                                          

                                                                                                          Actionable advice

                                                                                                          Get your head out of the mass media. The opportunity isn’t there if everybody’s looking in the same place. Be willing to look off the beaten path.

                                                                                                          No.1 goal for the next 12 months

                                                                                                          Richard’s number one goal for the next 12 months is to make his business cash flow positive.

                                                                                                          Parting words

                                                                                                           

                                                                                                          “Stay the course. Remember that it’s time in the markets, not just timing the markets that will bring you success. Targeting the right level of exposure for you is also very important.”

                                                                                                          Richard Smith

                                                                                                           

                                                                                                          [spp-transcript]

                                                                                                           

                                                                                                          Connect with Richard Smith

                                                                                                          • LinkedIn
                                                                                                          • Twitter
                                                                                                          • YouTube
                                                                                                          • Blog
                                                                                                          • Website
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s books

                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • My Worst Investment Ever
                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s online programs

                                                                                                          • Valuation Master Class
                                                                                                          • The Become a Better Investor Community
                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • Finance Made Ridiculously Simple
                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                          • Achieve Your Goals
                                                                                                          
                                                                                                          

                                                                                                          Connect with Andrew Stotz:

                                                                                                          • astotz.com
                                                                                                          • LinkedIn
                                                                                                          • Facebook
                                                                                                          • Instagram
                                                                                                          • Threads
                                                                                                          • Twitter
                                                                                                          • YouTube
                                                                                                          • My Worst Investment Ever Podcast
                                                                                                          
                                                                                                          ]]>BIO: Dr. Richard Smith – Berkeley Mathematician and Ph.D. in System Science – is a fintech entrepreneur, the CEO of The Foundation for the Study of Cycles, and cofounder of the investment tool Finiac.

                                                                                                          STORY: Richard invested his entire live savings ($10,000), and in 18 months, it had grown to $40,000. Then suddenly, the investment went down to $30,000. He believed it would go up again, so he held on. Then it went further down to $20,000. Richard kept waiting. Eventually, it went to $10,000, and that’s when he panicked and took out all his money.

                                                                                                          LEARNING: Integrate trailing stops. It’s hard to do the right thing in the markets.

                                                                                                           

                                                                                                          “The markets wouldn’t be as interesting or as potentially valuable if it wasn’t hard. Anything valuable is hard.”

                                                                                                          Richard Smith

                                                                                                           

                                                                                                          Guest profile

                                                                                                          Dr. Richard Smith – Berkeley Mathematician and Ph.D. in System Science – is a fintech entrepreneur, the CEO of The Foundation for the Study of Cycles, and cofounder of the investment tool Finiac.

                                                                                                          Richard has built a reputation as “The Doctor of Uncertainty” amongst his academic peers and has helped government agencies and Fortune 500 companies make sense of complex data sets.

                                                                                                          With his background in mathematical theories of uncertainty combined with his investing and trading experience, he is a regular speaker and lecturer and particularly enjoys opportunities to share his knowledge and help others gain an edge in the market.

                                                                                                          Worst investment ever

                                                                                                          In 1998/99, during the Dotcom boom, Richard had just started investing while in graduate school. In about 18 months, he’d managed to get his investment account up from $10,000 (his life savings at the time) to $40,000. Richard was over the moon and felt like a real expert investor.

                                                                                                          Then in March of 2000, all of a sudden, his $40,000 fell to $30,000 practically overnight. Though a significant loss, Richard decided to hold onto the investment and wait until it returned to $35,000. But instead, it went down to $20,000. Again, he said he’d get out when it gets back to $25,000. Finally, it went down to $10,000, and at that point, Richard panicked and got all his money out of the market.

                                                                                                          Lessons learned

                                                                                                          • Integrate trailing stops.
                                                                                                          • It’s hard to do the right thing in the markets.
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s takeaways

                                                                                                          • As a new investor, protect your capital first. This allows you to stay in the game, keep learning, and win over time.
                                                                                                          
                                                                                                          

                                                                                                          Actionable advice

                                                                                                          Get your head out of the mass media. The opportunity isn’t there if everybody’s looking in the same place. Be willing to look off the beaten path.

                                                                                                          No.1 goal for the next 12 months

                                                                                                          Richard’s number one goal for the next 12 months is to make his business cash flow positive.

                                                                                                          Parting words

                                                                                                           

                                                                                                          “Stay the course. Remember that it’s time in the markets, not just timing the markets that will bring you success. Targeting the right level of exposure for you is also very important.”

                                                                                                          Richard Smith

                                                                                                           

                                                                                                          [spp-transcript]

                                                                                                           

                                                                                                          Connect with Richard Smith

                                                                                                          • LinkedIn
                                                                                                          • Twitter
                                                                                                          • YouTube
                                                                                                          • Blog
                                                                                                          • Website
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s books

                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • My Worst Investment Ever
                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s online programs

                                                                                                          • Valuation Master Class
                                                                                                          • The Become a Better Investor Community
                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • Finance Made Ridiculously Simple
                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                          • Achieve Your Goals
                                                                                                          
                                                                                                          

                                                                                                          Connect with Andrew Stotz:

                                                                                                          • astotz.com
                                                                                                          • LinkedIn
                                                                                                          • Facebook
                                                                                                          • Instagram
                                                                                                          • Threads
                                                                                                          • Twitter
                                                                                                          • YouTube
                                                                                                          • My Worst Investment Ever Podcast
                                                                                                          
                                                                                                          ]]>37aa6be9-4c3b-4bbe-a48c-34599ef6655fThu, 20 Jul 2023 06:00:00 +070050:16falsefullDavid Perry – Bet on the Person, Not the IdeaBIO: David Perry was in the video game industry for over 30 years, making hits like The Matrix, Aladdin, The Terminator, and Earthworm Jim. He sold his last company to Sony PlayStation and the one before that to Atari. He’s now building a startup in e-Commerce called Carro.

                                                                                                          STORY: One of David’s top former employees started a VR company and invited him to invest. Though David believed in this employee, experiencing motion sickness while trying out the VR games made him not invest in what became a multi-billion dollar company.

                                                                                                          LEARNING: When you really believe in somebody, go ahead and support them. Bet on the person, not the idea.

                                                                                                           

                                                                                                          “When you get great people, incredible things tend to happen. So when you’re betting on a CEO, bet on someone who you think can attract talent.”

                                                                                                          David Perry

                                                                                                           

                                                                                                          Guest profile

                                                                                                          David Perry was in the video game industry for over 30 years, making hits like The Matrix, Aladdin, The Terminator, and Earthworm Jim. He sold his last company to Sony PlayStation and the one before that to Atari. He’s now building a startup in e-Commerce called Carro. If you email hello@getcarro.com and mention My Worst Investment Ever podcast, you’ll get VIP personal support.

                                                                                                          Worst investment ever

                                                                                                          David firmly believed that someday, every game ever made would be available on every device everywhere in the world instantly. And so, if that will eventually exist, why not start building it now?

                                                                                                          With that thought in mind, David began to build that technology and had some massive breakthroughs. He demonstrated that you could play a game from the cloud with the same feeling as playing with a console on your table. That caused people’s heads to pop off. Samsung wanted to work with David to power its video game strategy, and Sony bought the company.

                                                                                                          David’s employees made significant amounts of money from the company’s success and eventual sale. One of the employees decided to leave and start his own company using the money he had just made from the exit to Sony. As a CEO, David was committed to working with PlayStation. So he was watching this former employee build his own company.

                                                                                                          The employee contacted David and asked if he’d be interested in investing in his new company. David decided to check out the company. The guy demonstrated what he was working on, which was virtual reality. The company was called Oculus. David sat down and put on the VR headset. Then he started getting motion sickness because he was moving all over the place. He couldn’t wait to finish the demo.

                                                                                                          David was initially very interested in investing in the company because he genuinely believed in his former employee. But after the motion sickness, he needed time to think about it. He researched and read some military papers on how the military had tried their hardest to stop motion sickness but had found no solution as it’s biological. David decided to pass on the opportunity to be a founding Oculus investor.

                                                                                                          The company was a huge success and was bought for billions of dollars. David would have made hundreds of millions of dollars had he invested in the company.

                                                                                                          Lessons learned

                                                                                                          • When you really believe in somebody, go ahead and support them.
                                                                                                          • Bet on the person, not the idea.
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s takeaways

                                                                                                          • We get stuck into frames of reference, and sometimes we get beholden to those references, and we can’t think beyond them.
                                                                                                          
                                                                                                          

                                                                                                          Actionable advice

                                                                                                          If there’s something wrong or something missing in an idea or business you want to invest in, ask yourself if there’s anything you can do to help. Can you see a way out of this? If yes, then maybe that would be the thing that unlocks you.

                                                                                                          David’s recommendation

                                                                                                          Whatever you want to learn, there is somebody on planet Earth that’s amazing at it and is willing to teach you. Your job is to find that person and do whatever you must to get in a room with them and learn.

                                                                                                          No.1 goal for the next 12 months

                                                                                                          David’s number one goal for the next 12 months is to grow his company and get it to a point where it’s crystal clear what they’re doing and why they’re doing it.

                                                                                                          Parting words

                                                                                                           

                                                                                                          “Think of a question that 100% of people will say yes to, and then go after that.”

                                                                                                          David Perry

                                                                                                           

                                                                                                          [spp-transcript]

                                                                                                           

                                                                                                          Connect with David Perry

                                                                                                          • LinkedIn
                                                                                                          • Twitter
                                                                                                          • Blog
                                                                                                          • Website
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s books

                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • My Worst Investment Ever
                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s online programs

                                                                                                          • Valuation Master Class
                                                                                                          • The Become a Better Investor Community
                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • Finance Made Ridiculously Simple
                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                          • Achieve Your Goals
                                                                                                          
                                                                                                          

                                                                                                          Connect with Andrew Stotz:

                                                                                                          • astotz.com
                                                                                                          • LinkedIn
                                                                                                          • Facebook
                                                                                                          • Instagram
                                                                                                          • Threads
                                                                                                          • Twitter
                                                                                                          • YouTube
                                                                                                          • My Worst Investment Ever Podcast
                                                                                                          
                                                                                                          

                                                                                                          Further reading mentioned

                                                                                                          • David Perry, David Perry on Game Design: A Brainstorming ToolBox
                                                                                                          • Ken Robinson and Lou Aronica, Finding Your Element: How to Discover Your Talents and Passions and Transform Your Life.
                                                                                                          
                                                                                                          ]]>BIO: David Perry was in the video game industry for over 30 years, making hits like The Matrix, Aladdin, The Terminator, and Earthworm Jim. He sold his last company to Sony PlayStation and the one before that to Atari. He’s now building a startup in e-Commerce called Carro.

                                                                                                          STORY: One of David’s top former employees started a VR company and invited him to invest. Though David believed in this employee, experiencing motion sickness while trying out the VR games made him not invest in what became a multi-billion dollar company.

                                                                                                          LEARNING: When you really believe in somebody, go ahead and support them. Bet on the person, not the idea.

                                                                                                           

                                                                                                          “When you get great people, incredible things tend to happen. So when you’re betting on a CEO, bet on someone who you think can attract talent.”

                                                                                                          David Perry

                                                                                                           

                                                                                                          Guest profile

                                                                                                          David Perry was in the video game industry for over 30 years, making hits like The Matrix, Aladdin, The Terminator, and Earthworm Jim. He sold his last company to Sony PlayStation and the one before that to Atari. He’s now building a startup in e-Commerce called Carro. If you email hello@getcarro.com and mention My Worst Investment Ever podcast, you’ll get VIP personal support.

                                                                                                          Worst investment ever

                                                                                                          David firmly believed that someday, every game ever made would be available on every device everywhere in the world instantly. And so, if that will eventually exist, why not start building it now?

                                                                                                          With that thought in mind, David began to build that technology and had some massive breakthroughs. He demonstrated that you could play a game from the cloud with the same feeling as playing with a console on your table. That caused people’s heads to pop off. Samsung wanted to work with David to power its video game strategy, and Sony bought the company.

                                                                                                          David’s employees made significant amounts of money from the company’s success and eventual sale. One of the employees decided to leave and start his own company using the money he had just made from the exit to Sony. As a CEO, David was committed to working with PlayStation. So he was watching this former employee build his own company.

                                                                                                          The employee contacted David and asked if he’d be interested in investing in his new company. David decided to check out the company. The guy demonstrated what he was working on, which was virtual reality. The company was called Oculus. David sat down and put on the VR headset. Then he started getting motion sickness because he was moving all over the place. He couldn’t wait to finish the demo.

                                                                                                          David was initially very interested in investing in the company because he genuinely believed in his former employee. But after the motion sickness, he needed time to think about it. He researched and read some military papers on how the military had tried their hardest to stop motion sickness but had found no solution as it’s biological. David decided to pass on the opportunity to be a founding Oculus investor.

                                                                                                          The company was a huge success and was bought for billions of dollars. David would have made hundreds of millions of dollars had he invested in the company.

                                                                                                          Lessons learned

                                                                                                          • When you really believe in somebody, go ahead and support them.
                                                                                                          • Bet on the person, not the idea.
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s takeaways

                                                                                                          • We get stuck into frames of reference, and sometimes we get beholden to those references, and we can’t think beyond them.
                                                                                                          
                                                                                                          

                                                                                                          Actionable advice

                                                                                                          If there’s something wrong or something missing in an idea or business you want to invest in, ask yourself if there’s anything you can do to help. Can you see a way out of this? If yes, then maybe that would be the thing that unlocks you.

                                                                                                          David’s recommendation

                                                                                                          Whatever you want to learn, there is somebody on planet Earth that’s amazing at it and is willing to teach you. Your job is to find that person and do whatever you must to get in a room with them and learn.

                                                                                                          No.1 goal for the next 12 months

                                                                                                          David’s number one goal for the next 12 months is to grow his company and get it to a point where it’s crystal clear what they’re doing and why they’re doing it.

                                                                                                          Parting words

                                                                                                           

                                                                                                          “Think of a question that 100% of people will say yes to, and then go after that.”

                                                                                                          David Perry

                                                                                                           

                                                                                                          [spp-transcript]

                                                                                                           

                                                                                                          Connect with David Perry

                                                                                                          • LinkedIn
                                                                                                          • Twitter
                                                                                                          • Blog
                                                                                                          • Website
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s books

                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • My Worst Investment Ever
                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s online programs

                                                                                                          • Valuation Master Class
                                                                                                          • The Become a Better Investor Community
                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • Finance Made Ridiculously Simple
                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                          • Achieve Your Goals
                                                                                                          
                                                                                                          

                                                                                                          Connect with Andrew Stotz:

                                                                                                          • astotz.com
                                                                                                          • LinkedIn
                                                                                                          • Facebook
                                                                                                          • Instagram
                                                                                                          • Threads
                                                                                                          • Twitter
                                                                                                          • YouTube
                                                                                                          • My Worst Investment Ever Podcast
                                                                                                          
                                                                                                          

                                                                                                          Further reading mentioned

                                                                                                          • David Perry, David Perry on Game Design: A Brainstorming ToolBox
                                                                                                          • Ken Robinson and Lou Aronica, Finding Your Element: How to Discover Your Talents and Passions and Transform Your Life.
                                                                                                          
                                                                                                          ]]>2c079c67-8992-4163-b21d-84fbd2849794Wed, 19 Jul 2023 06:00:00 +070037:10falsefullTom Wall – If You Make Some Money, at Least Take Half off the TableBIO: Tom Wall holds a Ph.D. in Retirement Income Planning, with original research on Whole Life as a Fixed Income Alternative under the advisement of industry thought leaders: Wade Pfau, Michael Finke, and Stephen Parrish.

                                                                                                          STORY: Tom got pulled into the Bitcoin frenzy in 2018 and made huge gains. He had also invested in an NFT performing really well and made 15X his investment. Tom took his investment from the NFT and invested the money in Bitcoin. Then Bitcoin’s value dropped, and Tom lost almost half of his investment.

                                                                                                          LEARNING: If you make some money, sell, or at least take half off the table. Have a piece of your portfolio that is continually growing but also accessible.

                                                                                                           

                                                                                                          “If you make any gain, take back your original investment, and let your gain ride.”

                                                                                                          Tom Wall

                                                                                                           

                                                                                                          Guest profile

                                                                                                          Tom Wall holds a Ph.D. in Retirement Income Planning, with original research on Whole Life as a Fixed Income Alternative under the advisement of industry thought leaders: Wade Pfau, Michael Finke, and Stephen Parrish. His focus on academics and selling from a place of integrity comes from a 20-year career of positioning whole life insurance and competing against its alternatives.

                                                                                                          Recently he published Permission to Spend: Maximize Your Retirement with the Best-Kept Secret in Personal Finance.

                                                                                                          Starting in college as an award-winning advisor with Northwestern Mutual before moving his practice to MassMutual, he subsequently grew his career in prominent home office sales and marketing leadership roles.

                                                                                                          Tom has been a well-known storyteller at nationwide perennial company conferences and firm meetings. Tom now coaches and consults with financial advisors, hosts the Whole Life Masterminds study group, and authors multiple original thought leadership pieces, books, and other content.

                                                                                                          Worst investment ever

                                                                                                          In 2017/18, Tom’s friends started texting him about this thing called Bitcoin. He had heard about it before but dismissed it because he couldn’t find it anywhere or buy it. But when his friends started talking about it, he got interested and decided to invest in it. At the time, Bitcoin was at $2,000. Tom invested $10,000, and in just a year, Bitcoin’s value was $20,000. Tom made some really good money.

                                                                                                          Then the NFT craze started, and there was one in particular that Tom believed in, and he bought it. The NFT went up about 15 times his investment. Tom was pleased. Then he decided to move the NFT winnings to Bitcoin, but unfortunately, Bitcoin had started going down at the time. Tom lost over half the value of his gains.

                                                                                                          Lessons learned

                                                                                                          • If you make some money, sell, or at least take half off the table.
                                                                                                          • A bird in the hand is absolutely worth two in the bush.
                                                                                                          • Have a piece of your portfolio that is continually growing but also accessible.
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s takeaways

                                                                                                          • If you make some gains, take 50% off the table, and keep the other 50%.
                                                                                                          
                                                                                                          

                                                                                                          No.1 goal for the next 12 months

                                                                                                          Tom’s number one goal for the next 12 months is to add value to as many people as possible and be the voice of reason in the insurance space.

                                                                                                          Parting words

                                                                                                           

                                                                                                          “Go out there and take those risks. Just make sure you do it responsibly and take those gains off the table when you get them.”

                                                                                                          Tom Wall

                                                                                                           

                                                                                                          [spp-transcript]

                                                                                                           

                                                                                                          Connect with Tom Wall

                                                                                                          • LinkedIn
                                                                                                          • Blog
                                                                                                          • Website 
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s books

                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • My Worst Investment Ever
                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s online programs

                                                                                                          • Valuation Master Class
                                                                                                          • The Become a Better Investor Community
                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • Finance Made Ridiculously Simple
                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                          • Achieve Your Goals
                                                                                                          
                                                                                                          

                                                                                                          Connect with Andrew Stotz:

                                                                                                          • astotz.com
                                                                                                          • LinkedIn
                                                                                                          • Facebook
                                                                                                          • Instagram
                                                                                                          • Threads
                                                                                                          • Twitter
                                                                                                          • YouTube
                                                                                                          • My Worst Investment Ever Podcast
                                                                                                          
                                                                                                          ]]>BIO: Tom Wall holds a Ph.D. in Retirement Income Planning, with original research on Whole Life as a Fixed Income Alternative under the advisement of industry thought leaders: Wade Pfau, Michael Finke, and Stephen Parrish.

                                                                                                          STORY: Tom got pulled into the Bitcoin frenzy in 2018 and made huge gains. He had also invested in an NFT performing really well and made 15X his investment. Tom took his investment from the NFT and invested the money in Bitcoin. Then Bitcoin’s value dropped, and Tom lost almost half of his investment.

                                                                                                          LEARNING: If you make some money, sell, or at least take half off the table. Have a piece of your portfolio that is continually growing but also accessible.

                                                                                                           

                                                                                                          “If you make any gain, take back your original investment, and let your gain ride.”

                                                                                                          Tom Wall

                                                                                                           

                                                                                                          Guest profile

                                                                                                          Tom Wall holds a Ph.D. in Retirement Income Planning, with original research on Whole Life as a Fixed Income Alternative under the advisement of industry thought leaders: Wade Pfau, Michael Finke, and Stephen Parrish. His focus on academics and selling from a place of integrity comes from a 20-year career of positioning whole life insurance and competing against its alternatives.

                                                                                                          Recently he published Permission to Spend: Maximize Your Retirement with the Best-Kept Secret in Personal Finance.

                                                                                                          Starting in college as an award-winning advisor with Northwestern Mutual before moving his practice to MassMutual, he subsequently grew his career in prominent home office sales and marketing leadership roles.

                                                                                                          Tom has been a well-known storyteller at nationwide perennial company conferences and firm meetings. Tom now coaches and consults with financial advisors, hosts the Whole Life Masterminds study group, and authors multiple original thought leadership pieces, books, and other content.

                                                                                                          Worst investment ever

                                                                                                          In 2017/18, Tom’s friends started texting him about this thing called Bitcoin. He had heard about it before but dismissed it because he couldn’t find it anywhere or buy it. But when his friends started talking about it, he got interested and decided to invest in it. At the time, Bitcoin was at $2,000. Tom invested $10,000, and in just a year, Bitcoin’s value was $20,000. Tom made some really good money.

                                                                                                          Then the NFT craze started, and there was one in particular that Tom believed in, and he bought it. The NFT went up about 15 times his investment. Tom was pleased. Then he decided to move the NFT winnings to Bitcoin, but unfortunately, Bitcoin had started going down at the time. Tom lost over half the value of his gains.

                                                                                                          Lessons learned

                                                                                                          • If you make some money, sell, or at least take half off the table.
                                                                                                          • A bird in the hand is absolutely worth two in the bush.
                                                                                                          • Have a piece of your portfolio that is continually growing but also accessible.
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s takeaways

                                                                                                          • If you make some gains, take 50% off the table, and keep the other 50%.
                                                                                                          
                                                                                                          

                                                                                                          No.1 goal for the next 12 months

                                                                                                          Tom’s number one goal for the next 12 months is to add value to as many people as possible and be the voice of reason in the insurance space.

                                                                                                          Parting words

                                                                                                           

                                                                                                          “Go out there and take those risks. Just make sure you do it responsibly and take those gains off the table when you get them.”

                                                                                                          Tom Wall

                                                                                                           

                                                                                                          [spp-transcript]

                                                                                                           

                                                                                                          Connect with Tom Wall

                                                                                                          • LinkedIn
                                                                                                          • Blog
                                                                                                          • Website 
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s books

                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • My Worst Investment Ever
                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s online programs

                                                                                                          • Valuation Master Class
                                                                                                          • The Become a Better Investor Community
                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • Finance Made Ridiculously Simple
                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                          • Achieve Your Goals
                                                                                                          
                                                                                                          

                                                                                                          Connect with Andrew Stotz:

                                                                                                          • astotz.com
                                                                                                          • LinkedIn
                                                                                                          • Facebook
                                                                                                          • Instagram
                                                                                                          • Threads
                                                                                                          • Twitter
                                                                                                          • YouTube
                                                                                                          • My Worst Investment Ever Podcast
                                                                                                          
                                                                                                          ]]>9509a2c6-590d-4b0e-b936-4a569b4dbeedMon, 17 Jul 2023 06:00:00 +070028:35falsefullRick Warner – Be Careful When Investing in BanksBIO: Rick Warner is a personal development coach, mentor, and highly respected real estate broker based in California. Rick’s story is one of triumph over adversity.

                                                                                                          STORY: Rick took his money from well-performing stocks and decided to time the market. After much waiting, he came across the First Republic Bank’s stock, whose share price had fallen from $300 to $30. He bought 700 shares at $29 each. The price kept falling. Rick bought 700 more shares at $13, hoping the price would turn around, but it didn’t. The bank was bought out, and the shares went to zero.

                                                                                                          LEARNING: Do a lot of research before investing. Banks are very volatile, so you must be careful when investing in them.

                                                                                                           

                                                                                                          “Availing myself to others, reading books, learning stuff, and listening to people like you has been my biggest game changer.”

                                                                                                          Rick Warner

                                                                                                           

                                                                                                          Guest profile

                                                                                                          Rick Warner is a personal development coach, mentor, and highly respected real estate broker based in California. Rick’s story is one of triumph over adversity. At 20 years old, he found himself homeless and addicted to drugs. But with the help of a supportive community, he was able to turn his life around. Now, over 30 years later, Rick remains committed to personal growth and helping others achieve success. He has developed the Navigator program, a groundbreaking approach to personal productivity and purposeful living.

                                                                                                          Worst investment ever

                                                                                                          Rick had made some pretty good investments in stocks about three years ago. Then he felt things would go sideways, so he took all his money off the table. Rick’s plan was to wait and time when the market was right to reinvest. He waited and waited, but the market kept going up and stayed up, so Rick couldn’t get in until recently with the banking crisis.

                                                                                                          First Republic Bank’s stock, previously $300, had gone down to $30. He figured this was what he’d been waiting for. Rick bought 700 shares for $29 each, and by the end of that day, it had gone down to $21.

                                                                                                          The stock price kept falling; at some point, it was $13. Rick figured this was a big well-known bank with a good reputation and had done lots of business, so the stock price would eventually turn around. With this in mind, he decided to double down and bought another 700 shares. Three weeks later, the share price was $3. JP Morgan later bought the bank, and the shares went to zero.

                                                                                                          Lessons learned

                                                                                                          • Do a lot of research before investing.
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s takeaways

                                                                                                          • When investing in banks, you invest in a highly speculative asset.
                                                                                                          • Banks are very volatile, so you must be careful when investing in them.
                                                                                                          • If you invest in something and it starts to go down, and you never thought it would, there’s nothing wrong with getting out. You can always get in again at another point.
                                                                                                          
                                                                                                          

                                                                                                          Actionable advice

                                                                                                          Avail yourself to the people that have been around before you and be willing to ask them for help instead of doing everything yourself. Learn from other people’s mistakes instead of waiting to make the mistakes yourself.

                                                                                                          Rick’s recommendation

                                                                                                          Rick recommends reading The Four Agreements, a simple guide on personal development. You can also look Rick up on his website if you want to just have a conversation or if you need mentorship.

                                                                                                          No.1 goal for the next 12 months

                                                                                                          Rick’s number one goal for the next 12 months is to make his real estate business location independent so he can spend more time in his coaching and mentoring program.

                                                                                                          Parting words

                                                                                                           

                                                                                                          “Thank you so much for having me on the show, Andrew.”

                                                                                                          Rick Warner

                                                                                                           

                                                                                                          [spp-transcript]

                                                                                                           

                                                                                                          Connect with Rick Warner

                                                                                                          • LinkedIn
                                                                                                          • Facebook
                                                                                                          • Instagram
                                                                                                          • Website
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s books

                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • My Worst Investment Ever
                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s online programs

                                                                                                          • Valuation Master Class
                                                                                                          • The Become a Better Investor Community
                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • Finance Made Ridiculously Simple
                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                          • Achieve Your Goals
                                                                                                          
                                                                                                          

                                                                                                          Connect with Andrew Stotz:

                                                                                                          • astotz.com
                                                                                                          • LinkedIn
                                                                                                          • Facebook
                                                                                                          • Instagram
                                                                                                          • Threads
                                                                                                          • Twitter
                                                                                                          • YouTube
                                                                                                          • My Worst Investment Ever Podcast
                                                                                                          
                                                                                                          ]]>BIO: Rick Warner is a personal development coach, mentor, and highly respected real estate broker based in California. Rick’s story is one of triumph over adversity.

                                                                                                          STORY: Rick took his money from well-performing stocks and decided to time the market. After much waiting, he came across the First Republic Bank’s stock, whose share price had fallen from $300 to $30. He bought 700 shares at $29 each. The price kept falling. Rick bought 700 more shares at $13, hoping the price would turn around, but it didn’t. The bank was bought out, and the shares went to zero.

                                                                                                          LEARNING: Do a lot of research before investing. Banks are very volatile, so you must be careful when investing in them.

                                                                                                           

                                                                                                          “Availing myself to others, reading books, learning stuff, and listening to people like you has been my biggest game changer.”

                                                                                                          Rick Warner

                                                                                                           

                                                                                                          Guest profile

                                                                                                          Rick Warner is a personal development coach, mentor, and highly respected real estate broker based in California. Rick’s story is one of triumph over adversity. At 20 years old, he found himself homeless and addicted to drugs. But with the help of a supportive community, he was able to turn his life around. Now, over 30 years later, Rick remains committed to personal growth and helping others achieve success. He has developed the Navigator program, a groundbreaking approach to personal productivity and purposeful living.

                                                                                                          Worst investment ever

                                                                                                          Rick had made some pretty good investments in stocks about three years ago. Then he felt things would go sideways, so he took all his money off the table. Rick’s plan was to wait and time when the market was right to reinvest. He waited and waited, but the market kept going up and stayed up, so Rick couldn’t get in until recently with the banking crisis.

                                                                                                          First Republic Bank’s stock, previously $300, had gone down to $30. He figured this was what he’d been waiting for. Rick bought 700 shares for $29 each, and by the end of that day, it had gone down to $21.

                                                                                                          The stock price kept falling; at some point, it was $13. Rick figured this was a big well-known bank with a good reputation and had done lots of business, so the stock price would eventually turn around. With this in mind, he decided to double down and bought another 700 shares. Three weeks later, the share price was $3. JP Morgan later bought the bank, and the shares went to zero.

                                                                                                          Lessons learned

                                                                                                          • Do a lot of research before investing.
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s takeaways

                                                                                                          • When investing in banks, you invest in a highly speculative asset.
                                                                                                          • Banks are very volatile, so you must be careful when investing in them.
                                                                                                          • If you invest in something and it starts to go down, and you never thought it would, there’s nothing wrong with getting out. You can always get in again at another point.
                                                                                                          
                                                                                                          

                                                                                                          Actionable advice

                                                                                                          Avail yourself to the people that have been around before you and be willing to ask them for help instead of doing everything yourself. Learn from other people’s mistakes instead of waiting to make the mistakes yourself.

                                                                                                          Rick’s recommendation

                                                                                                          Rick recommends reading The Four Agreements, a simple guide on personal development. You can also look Rick up on his website if you want to just have a conversation or if you need mentorship.

                                                                                                          No.1 goal for the next 12 months

                                                                                                          Rick’s number one goal for the next 12 months is to make his real estate business location independent so he can spend more time in his coaching and mentoring program.

                                                                                                          Parting words

                                                                                                           

                                                                                                          “Thank you so much for having me on the show, Andrew.”

                                                                                                          Rick Warner

                                                                                                           

                                                                                                          [spp-transcript]

                                                                                                           

                                                                                                          Connect with Rick Warner

                                                                                                          • LinkedIn
                                                                                                          • Facebook
                                                                                                          • Instagram
                                                                                                          • Website
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s books

                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • My Worst Investment Ever
                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s online programs

                                                                                                          • Valuation Master Class
                                                                                                          • The Become a Better Investor Community
                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • Finance Made Ridiculously Simple
                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                          • Achieve Your Goals
                                                                                                          
                                                                                                          

                                                                                                          Connect with Andrew Stotz:

                                                                                                          • astotz.com
                                                                                                          • LinkedIn
                                                                                                          • Facebook
                                                                                                          • Instagram
                                                                                                          • Threads
                                                                                                          • Twitter
                                                                                                          • YouTube
                                                                                                          • My Worst Investment Ever Podcast
                                                                                                          
                                                                                                          ]]>ec535291-fbc3-4722-a0fe-efdb853a93a6Thu, 13 Jul 2023 06:00:00 +070033:04falsefullMohit Tater – You Don’t Know What You’re Getting Into Until You Are in ItBIO: Mohit Tater is a serial entrepreneur, investor, and consultant. He founded BlackBook Investments and quickly became a recognized expert investor in online businesses and digital assets.

                                                                                                          STORY: Mohit got enticed by the numbers his favorite pizza shop was turning and decided to start his own shop. Since he and his partner had no experience in the F&B industry, they were to receive full support from the franchise owner. Unfortunately, the owner went into a coma before the shop opened. The partners tried all they could, but the shop eventually failed.

                                                                                                          LEARNING: Don’t venture into an industry you don’t understand and chase high returns. You don’t know what you’re getting into until you are in it.

                                                                                                           

                                                                                                          “It’s more difficult to execute something you don’t know. Try and stick to something that is already working for you.”

                                                                                                          Mohit Tater

                                                                                                           

                                                                                                          Guest profile

                                                                                                          Mohit Tater is a serial entrepreneur, investor, and consultant. He founded BlackBook Investments and quickly became a recognized expert investor in online businesses and digital assets. Mohit has extensive experience in SEO, content marketing, social media marketing, and conversion rate optimization. He has worked closely with brands such as eBay, Groupon, Microsoft, Nokia, and many more on their digital marketing strategies. Today, Mohit lives his passion as an investor, growing online businesses for himself and his clients.

                                                                                                          Worst investment ever

                                                                                                          Mohit would visit a pizza place in his city every so often. One day he casually talked to the manager about how many pizzas they sell daily, what the operations are like, how much it costs to start a pizza shop like that one, etc. The numbers the manager shared with Mohit were very lucrative and enticing.

                                                                                                          Mohit set up a meeting with the owner of the franchise. He seemed very positive, and the numbers looked good. The guy had the whole business plan mapped out for expansion. Mohit and his business partner decided to open a pizza shop with the manager’s support, who would hire the team for them and ensure that the operations ran smoothly. Mohit and his partner had no experience in this business. Still, they believed they’d learn eventually and hopefully turn around and make a profit.

                                                                                                          The partners spent $100,000 setting up the shop, and just before it was about to open, the franchise owner got a stroke and went into a coma. This guy was the brains behind branding, marketing, operations, and everything, basically. Without him, Mohit and his partner were like sitting ducks. They had no option but to continue with the plan because they had spent so much money building it.

                                                                                                          The team the franchise owner had hired came and tried to run the pizza shop as efficiently as possible. But they were not turning a profit. The partners were just putting more money every month into sustaining and still not breaking even. Both partners had no experience with the F&B industry, and even though they tried all they could, the shop eventually failed.

                                                                                                          Lessons learned

                                                                                                          • Don’t venture into an industry you don’t understand and chase high returns because it’s not as easy as it looks from the outside.
                                                                                                          • Unless you have good experience in an industry, don’t bother putting your money at stake. Learn about it first.
                                                                                                          • You don’t know what you’re getting into until you are in it.
                                                                                                          • You have to dedicate time to your business.
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s takeaways

                                                                                                          • Get into a business knowing that unexpected things are going to happen.
                                                                                                          • You think you can control all the variables, but you can’t.
                                                                                                          • Only buy a company you understand where you can add value to its core.
                                                                                                          
                                                                                                          

                                                                                                          Actionable advice

                                                                                                          Try and stick to what you know and what’s already working for you.

                                                                                                          Mohit’s recommendation

                                                                                                          Mohit recommends you visit his website, BlackBook Investments, and click on the investor questionnaire to see if you’re a good fit to invest in online businesses.

                                                                                                          No.1 goal for the next 12 months

                                                                                                          Mohit’s number one goal for the next 12 months is to be at a point where he’s not needed in his business and his team can still handle everything.

                                                                                                          Parting words

                                                                                                           

                                                                                                          “Do what you know best and stick to it until it works for you.”

                                                                                                          Mohit Tater

                                                                                                           

                                                                                                          [spp-transcript]

                                                                                                           

                                                                                                          Connect with Mohit Tater

                                                                                                          • LinkedIn
                                                                                                          • Twitter
                                                                                                          • Instagram
                                                                                                          • Website 
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s books

                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • My Worst Investment Ever
                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s online programs

                                                                                                          • Valuation Master Class
                                                                                                          • The Become a Better Investor Community
                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • Finance Made Ridiculously Simple
                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                          • Achieve Your Goals
                                                                                                          
                                                                                                          

                                                                                                          Connect with Andrew Stotz:

                                                                                                          • astotz.com
                                                                                                          • LinkedIn
                                                                                                          • Facebook
                                                                                                          • Instagram
                                                                                                          • Threads
                                                                                                          • Twitter
                                                                                                          • YouTube
                                                                                                          • My Worst Investment Ever Podcast
                                                                                                          
                                                                                                          ]]>BIO: Mohit Tater is a serial entrepreneur, investor, and consultant. He founded BlackBook Investments and quickly became a recognized expert investor in online businesses and digital assets.

                                                                                                          STORY: Mohit got enticed by the numbers his favorite pizza shop was turning and decided to start his own shop. Since he and his partner had no experience in the F&B industry, they were to receive full support from the franchise owner. Unfortunately, the owner went into a coma before the shop opened. The partners tried all they could, but the shop eventually failed.

                                                                                                          LEARNING: Don’t venture into an industry you don’t understand and chase high returns. You don’t know what you’re getting into until you are in it.

                                                                                                           

                                                                                                          “It’s more difficult to execute something you don’t know. Try and stick to something that is already working for you.”

                                                                                                          Mohit Tater

                                                                                                           

                                                                                                          Guest profile

                                                                                                          Mohit Tater is a serial entrepreneur, investor, and consultant. He founded BlackBook Investments and quickly became a recognized expert investor in online businesses and digital assets. Mohit has extensive experience in SEO, content marketing, social media marketing, and conversion rate optimization. He has worked closely with brands such as eBay, Groupon, Microsoft, Nokia, and many more on their digital marketing strategies. Today, Mohit lives his passion as an investor, growing online businesses for himself and his clients.

                                                                                                          Worst investment ever

                                                                                                          Mohit would visit a pizza place in his city every so often. One day he casually talked to the manager about how many pizzas they sell daily, what the operations are like, how much it costs to start a pizza shop like that one, etc. The numbers the manager shared with Mohit were very lucrative and enticing.

                                                                                                          Mohit set up a meeting with the owner of the franchise. He seemed very positive, and the numbers looked good. The guy had the whole business plan mapped out for expansion. Mohit and his business partner decided to open a pizza shop with the manager’s support, who would hire the team for them and ensure that the operations ran smoothly. Mohit and his partner had no experience in this business. Still, they believed they’d learn eventually and hopefully turn around and make a profit.

                                                                                                          The partners spent $100,000 setting up the shop, and just before it was about to open, the franchise owner got a stroke and went into a coma. This guy was the brains behind branding, marketing, operations, and everything, basically. Without him, Mohit and his partner were like sitting ducks. They had no option but to continue with the plan because they had spent so much money building it.

                                                                                                          The team the franchise owner had hired came and tried to run the pizza shop as efficiently as possible. But they were not turning a profit. The partners were just putting more money every month into sustaining and still not breaking even. Both partners had no experience with the F&B industry, and even though they tried all they could, the shop eventually failed.

                                                                                                          Lessons learned

                                                                                                          • Don’t venture into an industry you don’t understand and chase high returns because it’s not as easy as it looks from the outside.
                                                                                                          • Unless you have good experience in an industry, don’t bother putting your money at stake. Learn about it first.
                                                                                                          • You don’t know what you’re getting into until you are in it.
                                                                                                          • You have to dedicate time to your business.
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s takeaways

                                                                                                          • Get into a business knowing that unexpected things are going to happen.
                                                                                                          • You think you can control all the variables, but you can’t.
                                                                                                          • Only buy a company you understand where you can add value to its core.
                                                                                                          
                                                                                                          

                                                                                                          Actionable advice

                                                                                                          Try and stick to what you know and what’s already working for you.

                                                                                                          Mohit’s recommendation

                                                                                                          Mohit recommends you visit his website, BlackBook Investments, and click on the investor questionnaire to see if you’re a good fit to invest in online businesses.

                                                                                                          No.1 goal for the next 12 months

                                                                                                          Mohit’s number one goal for the next 12 months is to be at a point where he’s not needed in his business and his team can still handle everything.

                                                                                                          Parting words

                                                                                                           

                                                                                                          “Do what you know best and stick to it until it works for you.”

                                                                                                          Mohit Tater

                                                                                                           

                                                                                                          [spp-transcript]

                                                                                                           

                                                                                                          Connect with Mohit Tater

                                                                                                          • LinkedIn
                                                                                                          • Twitter
                                                                                                          • Instagram
                                                                                                          • Website 
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s books

                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • My Worst Investment Ever
                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s online programs

                                                                                                          • Valuation Master Class
                                                                                                          • The Become a Better Investor Community
                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • Finance Made Ridiculously Simple
                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                          • Achieve Your Goals
                                                                                                          
                                                                                                          

                                                                                                          Connect with Andrew Stotz:

                                                                                                          • astotz.com
                                                                                                          • LinkedIn
                                                                                                          • Facebook
                                                                                                          • Instagram
                                                                                                          • Threads
                                                                                                          • Twitter
                                                                                                          • YouTube
                                                                                                          • My Worst Investment Ever Podcast
                                                                                                          
                                                                                                          ]]>f3f6adac-a28f-4365-ba50-54ed90fb1fb2Wed, 12 Jul 2023 06:00:00 +070024:56falsefullVorathep Srikuruwal – Walk That Property Before You Buy ItBIO: As the owner of Apollo Assets Co Ltd, Mr. Vorathep Srikuruwal is a prominent figure in the real estate industry of Thailand. He has established a track record and extensive experience as a visionary leader in this field.

                                                                                                          STORY: Vorathep came across a bank property he thought would be a good investment. He bought it for half its value and even got the bank to give him a loan. His biggest mistake was never visiting the property in person before buying. If he had, he’d have seen its terrible state.

                                                                                                          LEARNING: If you’re thinking of buying anything, whether cheap or expensive, first go there, and have a look. Just because it’s cheap doesn’t mean you have to buy it.

                                                                                                           

                                                                                                          “Walk through that property, touch it, and do a lot of homework before you buy it.”

                                                                                                          Vorathep Srikuruwal

                                                                                                           

                                                                                                          Guest profile

                                                                                                          As the owner of Apollo Assets Co Ltd, Mr. Vorathep Srikuruwal is a prominent figure in the real estate industry of Thailand. He has established a track record and extensive experience as a visionary leader in this field.

                                                                                                          His business acumen has enabled Apollo Assets Co Ltd to reach great heights, placing it among the leading players in the Thai real estate industry.

                                                                                                          Having earned a reputation for excellence, innovation, and integrity, Vorathep continues to contribute to the growth and development of the Thai real estate market.

                                                                                                          He is happy to offer free real estate consultancy, whether buying /selling/renting/leasing or prelim valuations of the assets in Bangkok and the rest of Thailand.

                                                                                                          Worst investment ever

                                                                                                          Vorathep started his real estate business in 2007 as a family business. About 10 years later, after building about seven projects, Vorathep saw an opportunity to buy two commercial shophouses in Chiang Mai, Thailand. The building was on the main road, just two minutes from one of the CBDs. The property belonged to a bank.

                                                                                                          Vorathep did a lot of homework before investing in the property. He checked the location and everything nearby (using Google Maps). He also used his knowledge of Chiang Mai to evaluate the property. The market valuation for the shophouses was $400,000. The property was roughly 800 square meters in size. The four-story building had a rooftop that could be converted into a lovely boutique hotel, office, or restaurant.

                                                                                                          The real estate mogul told the bank he’d be interested in getting the property for $200,000 because it was a non-performing asset. Three months later, the bank called and said he could have the property for $200,000. He just had to pay 1% of the value ($2,000), and the bank would provide him a loan for the property for another eight years. The deal seemed too good to be true. Vorathep did the math and saw that if he rented the property, he’d get about $4,000, pay $2,500 to the bank, and make a profit of $1,500 monthly. It was a good deal, so he accepted it.

                                                                                                          Vorathep put a for rent sign on the building, but six months later, he had no tenants. This shocked him because the building was in a decent location with a bank, shops, hotels, and a university nearby. After two years of paying the bank loan out of pocket, Vorathep decided to do something because the building was still not bringing in any income. He visited the building for the first time. Yes, Vorathep didn’t do a property visit before paying for it. He had relied on the photos the bank had sent him and Google Maps.

                                                                                                          The building was in a horrible state; no wonder nobody wanted to rent it. A year later, Vorathep flew to Chiang Mai after the COVID lockdowns. He went to the building next door and spoke with the owners, mother and son. He offered to sell the building to them. They were interested in buying it for $150,000, but Vorathep got them to pay $220,000. He didn’t make any profit from that sale.

                                                                                                          Lessons learned

                                                                                                          • If you’re thinking of buying anything, whether it’s cheap or expensive, first go there, and have a look. Don’t judge the book by the cover.
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s takeaways

                                                                                                          • Just because it’s cheap doesn’t mean you have to buy it.
                                                                                                          • Be very careful when purchasing bank properties.
                                                                                                          
                                                                                                          

                                                                                                          No.1 goal for the next 12 months

                                                                                                          Vorathep’s number one goal for the next 12 months is to take more care of himself and run the 21km half marathon.

                                                                                                          Parting words

                                                                                                           

                                                                                                          “Thank you very much!”

                                                                                                          Vorathep Srikuruwal

                                                                                                           

                                                                                                          [spp-transcript]

                                                                                                           

                                                                                                          Connect with Vorathep Srikuruwal

                                                                                                          • LinkedIn
                                                                                                          • Facebook
                                                                                                          • Website
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s books

                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • My Worst Investment Ever
                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s online programs

                                                                                                          • Valuation Master Class
                                                                                                          • The Become a Better Investor Community
                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • Finance Made Ridiculously Simple
                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                          • Achieve Your Goals
                                                                                                          
                                                                                                          

                                                                                                          Connect with Andrew Stotz:

                                                                                                          • astotz.com
                                                                                                          • LinkedIn
                                                                                                          • Facebook
                                                                                                          • Instagram
                                                                                                          • Threads
                                                                                                          • Twitter
                                                                                                          • YouTube
                                                                                                          • My Worst Investment Ever Podcast
                                                                                                          
                                                                                                          ]]>BIO: As the owner of Apollo Assets Co Ltd, Mr. Vorathep Srikuruwal is a prominent figure in the real estate industry of Thailand. He has established a track record and extensive experience as a visionary leader in this field.

                                                                                                          STORY: Vorathep came across a bank property he thought would be a good investment. He bought it for half its value and even got the bank to give him a loan. His biggest mistake was never visiting the property in person before buying. If he had, he’d have seen its terrible state.

                                                                                                          LEARNING: If you’re thinking of buying anything, whether cheap or expensive, first go there, and have a look. Just because it’s cheap doesn’t mean you have to buy it.

                                                                                                           

                                                                                                          “Walk through that property, touch it, and do a lot of homework before you buy it.”

                                                                                                          Vorathep Srikuruwal

                                                                                                           

                                                                                                          Guest profile

                                                                                                          As the owner of Apollo Assets Co Ltd, Mr. Vorathep Srikuruwal is a prominent figure in the real estate industry of Thailand. He has established a track record and extensive experience as a visionary leader in this field.

                                                                                                          His business acumen has enabled Apollo Assets Co Ltd to reach great heights, placing it among the leading players in the Thai real estate industry.

                                                                                                          Having earned a reputation for excellence, innovation, and integrity, Vorathep continues to contribute to the growth and development of the Thai real estate market.

                                                                                                          He is happy to offer free real estate consultancy, whether buying /selling/renting/leasing or prelim valuations of the assets in Bangkok and the rest of Thailand.

                                                                                                          Worst investment ever

                                                                                                          Vorathep started his real estate business in 2007 as a family business. About 10 years later, after building about seven projects, Vorathep saw an opportunity to buy two commercial shophouses in Chiang Mai, Thailand. The building was on the main road, just two minutes from one of the CBDs. The property belonged to a bank.

                                                                                                          Vorathep did a lot of homework before investing in the property. He checked the location and everything nearby (using Google Maps). He also used his knowledge of Chiang Mai to evaluate the property. The market valuation for the shophouses was $400,000. The property was roughly 800 square meters in size. The four-story building had a rooftop that could be converted into a lovely boutique hotel, office, or restaurant.

                                                                                                          The real estate mogul told the bank he’d be interested in getting the property for $200,000 because it was a non-performing asset. Three months later, the bank called and said he could have the property for $200,000. He just had to pay 1% of the value ($2,000), and the bank would provide him a loan for the property for another eight years. The deal seemed too good to be true. Vorathep did the math and saw that if he rented the property, he’d get about $4,000, pay $2,500 to the bank, and make a profit of $1,500 monthly. It was a good deal, so he accepted it.

                                                                                                          Vorathep put a for rent sign on the building, but six months later, he had no tenants. This shocked him because the building was in a decent location with a bank, shops, hotels, and a university nearby. After two years of paying the bank loan out of pocket, Vorathep decided to do something because the building was still not bringing in any income. He visited the building for the first time. Yes, Vorathep didn’t do a property visit before paying for it. He had relied on the photos the bank had sent him and Google Maps.

                                                                                                          The building was in a horrible state; no wonder nobody wanted to rent it. A year later, Vorathep flew to Chiang Mai after the COVID lockdowns. He went to the building next door and spoke with the owners, mother and son. He offered to sell the building to them. They were interested in buying it for $150,000, but Vorathep got them to pay $220,000. He didn’t make any profit from that sale.

                                                                                                          Lessons learned

                                                                                                          • If you’re thinking of buying anything, whether it’s cheap or expensive, first go there, and have a look. Don’t judge the book by the cover.
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s takeaways

                                                                                                          • Just because it’s cheap doesn’t mean you have to buy it.
                                                                                                          • Be very careful when purchasing bank properties.
                                                                                                          
                                                                                                          

                                                                                                          No.1 goal for the next 12 months

                                                                                                          Vorathep’s number one goal for the next 12 months is to take more care of himself and run the 21km half marathon.

                                                                                                          Parting words

                                                                                                           

                                                                                                          “Thank you very much!”

                                                                                                          Vorathep Srikuruwal

                                                                                                           

                                                                                                          [spp-transcript]

                                                                                                           

                                                                                                          Connect with Vorathep Srikuruwal

                                                                                                          • LinkedIn
                                                                                                          • Facebook
                                                                                                          • Website
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s books

                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • My Worst Investment Ever
                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s online programs

                                                                                                          • Valuation Master Class
                                                                                                          • The Become a Better Investor Community
                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • Finance Made Ridiculously Simple
                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                          • Achieve Your Goals
                                                                                                          
                                                                                                          

                                                                                                          Connect with Andrew Stotz:

                                                                                                          • astotz.com
                                                                                                          • LinkedIn
                                                                                                          • Facebook
                                                                                                          • Instagram
                                                                                                          • Threads
                                                                                                          • Twitter
                                                                                                          • YouTube
                                                                                                          • My Worst Investment Ever Podcast
                                                                                                          
                                                                                                          ]]>3a444e70-35b6-4867-92e2-df737e98e046Mon, 10 Jul 2023 06:00:00 +070029:27falsefullPhil Bak – Be Slow to Jump Onto BandwagonsBIO: Phil Bak is the CEO of Armada ETFs, a REIT-specialty asset manager that delivers customized solutions to REIT investors through ETFs, SMAs, and proprietary AI and machine learning REIT valuation models.

                                                                                                          STORY: Phil got into baseball cards when he was 14. Rookie Greg Jeffries became the hype one year and was poised to be the next big thing. Phil bought the hype, sold all his cards, and invested in Jeffries’ cards. He believed cards would be worth $40 to $50 a piece in just a few years. It never happened because Jeffries’ career didn’t pan out, and the entire baseball card bubble collapsed.

                                                                                                          LEARNING: Be slow to jump onto bandwagons. Expect the unexpected, be prepared, and have a backup plan. Be diversified in as many different ways as possible.

                                                                                                           

                                                                                                          “As long as you can recognize your mistake, learn and grow from it, then you understand that investing is a risky business. That will make you a smarter investor.”

                                                                                                          Phil Bak

                                                                                                           

                                                                                                          Guest profile

                                                                                                          Phil Bak is the CEO of Armada ETFs, a REIT-specialty asset manager that delivers customized solutions to REIT investors through ETFs, SMAs, and proprietary AI and machine learning REIT valuation models. Phil has previously served as the Founder/CEO of Exponential ETFs (acquired by Tidal Financial Group), Chief Investment Officer at Signal Advisors, and Managing Director at the New York Stock Exchange.

                                                                                                          Phil is the author of two patents on innovative ETF structures and has led market structure enhancements that have become industry standard. Phil has been featured in top-tier media outlets such as the Wall Street Journal, Bloomberg, CNBC, Financial Times, and Reuters. Phil hosts The Phil Bak Podcast and writes regularly on Substack.

                                                                                                          Worst investment ever

                                                                                                          At 14, Phil got interested in baseball cards after accompanying his brother to card shows. He saved all the money he made from his summer jobs and bought Roberto Clemente cards, which were like a blue chip. With time he also bought other cards.

                                                                                                          The following year, a young guy was coming up, Greg Jeffries, who was poised to be the next big thing. Phil bought the hype. He sold all his cards and decided to invest in just this one card. He got himself a bounty of 25-30 Greg Jeffries cards.

                                                                                                          Phil believed this guy would be the next big superstar, and his cards would be worth $40 to $50 a piece in just a couple of years. It never happened because Jeffries’ career didn’t pan out, and the entire baseball card bubble collapsed. Phil still has a stack of Greg Jeffries rookie cards that are literally worthless somewhere in his closet.

                                                                                                          Lessons learned

                                                                                                          • Be slow to jump onto bandwagons.
                                                                                                          • Expect the unexpected, be prepared, and have a backup plan.
                                                                                                          • Be diversified in as many different ways as possible.
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s takeaways

                                                                                                          • There are many risks around the corner that you only know about once you get some experience. So be very careful, mindful, and try to learn as much as possible, but don’t put all your money down.
                                                                                                          
                                                                                                          

                                                                                                          Actionable advice

                                                                                                          The worst time to invest in anything is after a big run because there’s always an element of mean reversion and cyclicalities. Never chase the hype, be patient. If you’ve missed it, wait for the next opportunity. There’s always there’s another opportunity coming.

                                                                                                          Phil’s recommendation

                                                                                                          Phil recommends learning from untraditional channels such as podcasts (like My Worst Investment Ever podcast), books, blogs, and substacks. You’ll learn more and faster from such media.

                                                                                                          No.1 goal for the next 12 months

                                                                                                          Phil’s number one goal for the next 12 months is to finish the series A round of capital for his company and ensure he can execute his plan over the next three years.

                                                                                                          Parting words

                                                                                                           

                                                                                                          “Stay curious. Thanks for having me on. It was a ton of fun. I appreciate it.”

                                                                                                          Phil Bak

                                                                                                           

                                                                                                          [spp-transcript]

                                                                                                           

                                                                                                          Connect with Phil Bak

                                                                                                          • LinkedIn
                                                                                                          • Twitter
                                                                                                          • Website 
                                                                                                          • Blog
                                                                                                          • Podcast
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s books

                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • My Worst Investment Ever
                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s online programs

                                                                                                          • Valuation Master Class
                                                                                                          • The Become a Better Investor Community
                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • Finance Made Ridiculously Simple
                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                          • Achieve Your Goals
                                                                                                          
                                                                                                          

                                                                                                          Connect with Andrew Stotz:

                                                                                                          • astotz.com
                                                                                                          • LinkedIn
                                                                                                          • Facebook
                                                                                                          • Instagram
                                                                                                          • Twitter
                                                                                                          • YouTube
                                                                                                          • My Worst Investment Ever Podcast
                                                                                                          
                                                                                                          ]]>BIO: Phil Bak is the CEO of Armada ETFs, a REIT-specialty asset manager that delivers customized solutions to REIT investors through ETFs, SMAs, and proprietary AI and machine learning REIT valuation models.

                                                                                                          STORY: Phil got into baseball cards when he was 14. Rookie Greg Jeffries became the hype one year and was poised to be the next big thing. Phil bought the hype, sold all his cards, and invested in Jeffries’ cards. He believed cards would be worth $40 to $50 a piece in just a few years. It never happened because Jeffries’ career didn’t pan out, and the entire baseball card bubble collapsed.

                                                                                                          LEARNING: Be slow to jump onto bandwagons. Expect the unexpected, be prepared, and have a backup plan. Be diversified in as many different ways as possible.

                                                                                                           

                                                                                                          “As long as you can recognize your mistake, learn and grow from it, then you understand that investing is a risky business. That will make you a smarter investor.”

                                                                                                          Phil Bak

                                                                                                           

                                                                                                          Guest profile

                                                                                                          Phil Bak is the CEO of Armada ETFs, a REIT-specialty asset manager that delivers customized solutions to REIT investors through ETFs, SMAs, and proprietary AI and machine learning REIT valuation models. Phil has previously served as the Founder/CEO of Exponential ETFs (acquired by Tidal Financial Group), Chief Investment Officer at Signal Advisors, and Managing Director at the New York Stock Exchange.

                                                                                                          Phil is the author of two patents on innovative ETF structures and has led market structure enhancements that have become industry standard. Phil has been featured in top-tier media outlets such as the Wall Street Journal, Bloomberg, CNBC, Financial Times, and Reuters. Phil hosts The Phil Bak Podcast and writes regularly on Substack.

                                                                                                          Worst investment ever

                                                                                                          At 14, Phil got interested in baseball cards after accompanying his brother to card shows. He saved all the money he made from his summer jobs and bought Roberto Clemente cards, which were like a blue chip. With time he also bought other cards.

                                                                                                          The following year, a young guy was coming up, Greg Jeffries, who was poised to be the next big thing. Phil bought the hype. He sold all his cards and decided to invest in just this one card. He got himself a bounty of 25-30 Greg Jeffries cards.

                                                                                                          Phil believed this guy would be the next big superstar, and his cards would be worth $40 to $50 a piece in just a couple of years. It never happened because Jeffries’ career didn’t pan out, and the entire baseball card bubble collapsed. Phil still has a stack of Greg Jeffries rookie cards that are literally worthless somewhere in his closet.

                                                                                                          Lessons learned

                                                                                                          • Be slow to jump onto bandwagons.
                                                                                                          • Expect the unexpected, be prepared, and have a backup plan.
                                                                                                          • Be diversified in as many different ways as possible.
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s takeaways

                                                                                                          • There are many risks around the corner that you only know about once you get some experience. So be very careful, mindful, and try to learn as much as possible, but don’t put all your money down.
                                                                                                          
                                                                                                          

                                                                                                          Actionable advice

                                                                                                          The worst time to invest in anything is after a big run because there’s always an element of mean reversion and cyclicalities. Never chase the hype, be patient. If you’ve missed it, wait for the next opportunity. There’s always there’s another opportunity coming.

                                                                                                          Phil’s recommendation

                                                                                                          Phil recommends learning from untraditional channels such as podcasts (like My Worst Investment Ever podcast), books, blogs, and substacks. You’ll learn more and faster from such media.

                                                                                                          No.1 goal for the next 12 months

                                                                                                          Phil’s number one goal for the next 12 months is to finish the series A round of capital for his company and ensure he can execute his plan over the next three years.

                                                                                                          Parting words

                                                                                                           

                                                                                                          “Stay curious. Thanks for having me on. It was a ton of fun. I appreciate it.”

                                                                                                          Phil Bak

                                                                                                           

                                                                                                          [spp-transcript]

                                                                                                           

                                                                                                          Connect with Phil Bak

                                                                                                          • LinkedIn
                                                                                                          • Twitter
                                                                                                          • Website 
                                                                                                          • Blog
                                                                                                          • Podcast
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s books

                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • My Worst Investment Ever
                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s online programs

                                                                                                          • Valuation Master Class
                                                                                                          • The Become a Better Investor Community
                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • Finance Made Ridiculously Simple
                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                          • Achieve Your Goals
                                                                                                          
                                                                                                          

                                                                                                          Connect with Andrew Stotz:

                                                                                                          • astotz.com
                                                                                                          • LinkedIn
                                                                                                          • Facebook
                                                                                                          • Instagram
                                                                                                          • Twitter
                                                                                                          • YouTube
                                                                                                          • My Worst Investment Ever Podcast
                                                                                                          
                                                                                                          ]]>d26fbb59-223b-43ba-af9a-a8b21e2121f5Thu, 06 Jul 2023 06:00:00 +070034:56falsefullJack Schwager – Never Stay in a Position That Violates What You Believe InBIO: Jack D. Schwager is a recognized industry expert on futures and hedge funds and the author of the iconic Market Wizards series, in which he interviewed about 70 trading legends of our time.

                                                                                                          STORY: Jack stayed too long in a position where his short was the strongest and his long the weakest, even though he knew this wasn’t the way to invest.

                                                                                                          LEARNING: Never stay in a position that violates something that you believe in. In every position, know where you’ll get out before you get in.

                                                                                                           

                                                                                                          “A mistake is not a trade that loses money. It’s a trade where you did something that violated whatever your approach is that makes money over time.”

                                                                                                          Jack Schwager

                                                                                                           

                                                                                                          Guest profile

                                                                                                          Jack D. Schwager is a recognized industry expert on futures and hedge funds and the author of the iconic Market Wizards series in which he interviewed about 70 trading legends of our time.

                                                                                                          His most recent work in the series is Unknown Market Wizards, published in November 2020. Previous books in the series include Market Wizards (1989), The New Market Wizards (1992), Stock Market Wizards (2001), Hedge Fund Market Wizards (2012), and The Little Book of Market Wizards (2014). His other books include the revised edition of A Complete Guide to the Futures Markets (2017). Market Sense and Nonsense (2013), Getting Started in Technical Analysis (1999), and the three-volume Schwager on Futures series (1995-96).

                                                                                                          Worst investment ever

                                                                                                          In late 2008, the world was falling apart. Jack looked at certain things like the metals index, down about 80%. He thought China was still an emerging market growing rapidly and had every reason to continue growing. Jack believed that this economy would come back somewhat.

                                                                                                          So, Jack decided to buy ETF calls on China and the metals as far out as he could, assuming that the longer the time, the more likely they were to come back. He bought them deep out of the money, so they were pretty cheap.

                                                                                                          Several years later, Jack still had that position. Instead of just taking the profits, he hedged himself by selling the S&P Retail ETF (XRT) and the NASDAQ ETF. Jack put himself in a spread position where he was short NASDAQ and the retail index and long China.

                                                                                                          One day, China dropped 2%, and the XRT rose 2%. So Jack’s long position went down 2%, and his short position went up 2%. So he got a 4% loss on position in a single day. Essentially, you want to be long the strongest and short the weakest. Jack’s position was precisely the opposite. Instead of getting out of the position, he stayed, hoping it would return in a bit, but it didn’t. Jack eventually got out but lost most of his profits.

                                                                                                          Lessons learned

                                                                                                          • Ensure your long position is the strongest, and the short position is the weakest.
                                                                                                          • Never stay in a position that violates something that you believe in.
                                                                                                          • Always have a set maximum amount that you’ll risk on any investment to prevent you from losing too much on any investment.
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s takeaways

                                                                                                          • Sometimes you just have a good idea, but at the wrong time, and it’s ok to quit and come back when the timing is right.
                                                                                                          
                                                                                                          

                                                                                                          Actionable advice

                                                                                                          In every position, know where you’ll get out before you get in.

                                                                                                          Jack’s recommendation

                                                                                                          Jack shares a list of his top 10 investing books:

                                                                                                          • Reminiscences of a Stock Operator
                                                                                                          • Diary of a Professional Commodity Trader: Lessons from 21 Weeks of Real Trading
                                                                                                          • Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
                                                                                                          • Fortune’s Formula: The Untold Story of the Scientific Betting System That Beat the Casinos
                                                                                                          • The Quants: How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It
                                                                                                          • More Money Than God: Hedge Funds and the Making of a New Elite
                                                                                                          • Option Volatility and Pricing: Advanced Trading Strategies and Techniques
                                                                                                          • When Genius Failed: The Rise and Fall of Long-Term Capital Management
                                                                                                          • What I Learned Losing a Million Dollars
                                                                                                          • The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution
                                                                                                          
                                                                                                          

                                                                                                           

                                                                                                          [spp-transcript]

                                                                                                           

                                                                                                          Connect with Jack Schwager

                                                                                                          • LinkedIn
                                                                                                          • Twitter
                                                                                                          • Website 
                                                                                                          • Books
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s books

                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • My Worst Investment Ever
                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s online programs

                                                                                                          • Valuation Master Class
                                                                                                          • The Become a Better Investor Community
                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • Finance Made Ridiculously Simple
                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                          • Achieve Your Goals
                                                                                                          
                                                                                                          

                                                                                                          Connect with Andrew Stotz:

                                                                                                          • astotz.com
                                                                                                          • LinkedIn
                                                                                                          • Facebook
                                                                                                          • Instagram
                                                                                                          • Twitter
                                                                                                          • YouTube
                                                                                                          • My Worst Investment Ever Podcast
                                                                                                          
                                                                                                          ]]>BIO: Jack D. Schwager is a recognized industry expert on futures and hedge funds and the author of the iconic Market Wizards series, in which he interviewed about 70 trading legends of our time.

                                                                                                          STORY: Jack stayed too long in a position where his short was the strongest and his long the weakest, even though he knew this wasn’t the way to invest.

                                                                                                          LEARNING: Never stay in a position that violates something that you believe in. In every position, know where you’ll get out before you get in.

                                                                                                           

                                                                                                          “A mistake is not a trade that loses money. It’s a trade where you did something that violated whatever your approach is that makes money over time.”

                                                                                                          Jack Schwager

                                                                                                           

                                                                                                          Guest profile

                                                                                                          Jack D. Schwager is a recognized industry expert on futures and hedge funds and the author of the iconic Market Wizards series in which he interviewed about 70 trading legends of our time.

                                                                                                          His most recent work in the series is Unknown Market Wizards, published in November 2020. Previous books in the series include Market Wizards (1989), The New Market Wizards (1992), Stock Market Wizards (2001), Hedge Fund Market Wizards (2012), and The Little Book of Market Wizards (2014). His other books include the revised edition of A Complete Guide to the Futures Markets (2017). Market Sense and Nonsense (2013), Getting Started in Technical Analysis (1999), and the three-volume Schwager on Futures series (1995-96).

                                                                                                          Worst investment ever

                                                                                                          In late 2008, the world was falling apart. Jack looked at certain things like the metals index, down about 80%. He thought China was still an emerging market growing rapidly and had every reason to continue growing. Jack believed that this economy would come back somewhat.

                                                                                                          So, Jack decided to buy ETF calls on China and the metals as far out as he could, assuming that the longer the time, the more likely they were to come back. He bought them deep out of the money, so they were pretty cheap.

                                                                                                          Several years later, Jack still had that position. Instead of just taking the profits, he hedged himself by selling the S&P Retail ETF (XRT) and the NASDAQ ETF. Jack put himself in a spread position where he was short NASDAQ and the retail index and long China.

                                                                                                          One day, China dropped 2%, and the XRT rose 2%. So Jack’s long position went down 2%, and his short position went up 2%. So he got a 4% loss on position in a single day. Essentially, you want to be long the strongest and short the weakest. Jack’s position was precisely the opposite. Instead of getting out of the position, he stayed, hoping it would return in a bit, but it didn’t. Jack eventually got out but lost most of his profits.

                                                                                                          Lessons learned

                                                                                                          • Ensure your long position is the strongest, and the short position is the weakest.
                                                                                                          • Never stay in a position that violates something that you believe in.
                                                                                                          • Always have a set maximum amount that you’ll risk on any investment to prevent you from losing too much on any investment.
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s takeaways

                                                                                                          • Sometimes you just have a good idea, but at the wrong time, and it’s ok to quit and come back when the timing is right.
                                                                                                          
                                                                                                          

                                                                                                          Actionable advice

                                                                                                          In every position, know where you’ll get out before you get in.

                                                                                                          Jack’s recommendation

                                                                                                          Jack shares a list of his top 10 investing books:

                                                                                                          • Reminiscences of a Stock Operator
                                                                                                          • Diary of a Professional Commodity Trader: Lessons from 21 Weeks of Real Trading
                                                                                                          • Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
                                                                                                          • Fortune’s Formula: The Untold Story of the Scientific Betting System That Beat the Casinos
                                                                                                          • The Quants: How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It
                                                                                                          • More Money Than God: Hedge Funds and the Making of a New Elite
                                                                                                          • Option Volatility and Pricing: Advanced Trading Strategies and Techniques
                                                                                                          • When Genius Failed: The Rise and Fall of Long-Term Capital Management
                                                                                                          • What I Learned Losing a Million Dollars
                                                                                                          • The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution
                                                                                                          
                                                                                                          

                                                                                                           

                                                                                                          [spp-transcript]

                                                                                                           

                                                                                                          Connect with Jack Schwager

                                                                                                          • LinkedIn
                                                                                                          • Twitter
                                                                                                          • Website 
                                                                                                          • Books
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s books

                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • My Worst Investment Ever
                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s online programs

                                                                                                          • Valuation Master Class
                                                                                                          • The Become a Better Investor Community
                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • Finance Made Ridiculously Simple
                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                          • Achieve Your Goals
                                                                                                          
                                                                                                          

                                                                                                          Connect with Andrew Stotz:

                                                                                                          • astotz.com
                                                                                                          • LinkedIn
                                                                                                          • Facebook
                                                                                                          • Instagram
                                                                                                          • Twitter
                                                                                                          • YouTube
                                                                                                          • My Worst Investment Ever Podcast
                                                                                                          
                                                                                                          ]]>31b6d7de-80d1-4ad7-b737-888cfa6c1e71Wed, 05 Jul 2023 06:00:00 +070046:40falsefullSampark Sachdeva – Don’t Be Afraid to Take the PlungeBIO: Sampark Sachdeva has 12 years of corporate experience across Asian Paints and other businesses.

                                                                                                          STORY: Sampark let the security of his corporate job distract him from building a business out of his love for training. It wasn’t until COVID struck and he found himself without a job that he decided to work on the plan. The business turned out to be a huge success.

                                                                                                          LEARNING: Nothing good comes easy. Don’t let job security restrict you from pursuing your entrepreneurial dreams.

                                                                                                           

                                                                                                          “No matter how bad your situation might be, the victim card can only be played once. You can’t keep playing that card again and again.”

                                                                                                          Sampark Sachdeva

                                                                                                           

                                                                                                          Guest profile

                                                                                                          Sampark Sachdeva has 12 years of corporate experience across Asian Paints and other businesses. He was awarded the best digital coach of 2021 at the India coaching awards. He was a TEDx speaker in 2020 and won the LinkedIn Spotlight Award in 2019, recognizing him as one of India’s top content creators. Paul Ryder and Oracle also awarded Sampark as a top marketing and sales professional in 2019.

                                                                                                          Sampark has trained over 20,000 people across 125 sessions across 10 countries. He has over 125,000 followers across social media channels.

                                                                                                          Worst investment ever

                                                                                                          Sampark had an excellent corporate career. He was with Asian Paints, India’s largest paints company, for over five years. In 2015 he moved to Ola, the Indian Uber, and was there for three years. Then he moved to Oyo, the country’s largest hospitality brand, for another two years. Sampark won the Top 100 Marketing and Sales Professionals Award during this career journey. So yes, everything was going well on the corporate side.

                                                                                                          On the passion side, Sampark had been writing on LinkedIn for close to six years. He’d posted over 2000 posts in 2019 and won the LinkedIn Spotlight Award. Everything seemed rosy, and Sampark felt this was the time to take off.

                                                                                                          In 2020, Sampark moved into a new role in the same organization. But that’s when COVID struck. He was in the hospitality industry, leading corporate events. He had just been in that role for a few months when the lockdown occurred. In one day, everything stopped.

                                                                                                          Sampark sat down with his family, and they looked at their savings. They could survive for a couple of years with what they had. Sampark decided to explore a plan he had put on the back burner. Sampark loved training, and after getting the content creator award, he consulted his mentors on how to make something out of his love for training.

                                                                                                          They all advised him to work on the plan for the next three to four years and then look at how to do it long-term. But when the lockdown started, the three-year plan became an overnight plan. Sampark decided to give himself four months to execute the plan. If it didn’t work, he still had a corporate career to return to after the lockdown.

                                                                                                          At the end of four months, Sampark did a review and realized the training business was going better than he expected. He gave himself another four months, and it was still going well. He continued doing it until April 2022, when an old boss offered him a job. Sampark turned down the job because his business was doing well. He had trained close to 80,000 people and had a lot of clients in the pipeline. Sampark’s only regret is having waited for so long to start his passion venture.

                                                                                                          Lessons learned

                                                                                                          • As a corporate professional, you’re restricted by your own thoughts and the false sense of security.
                                                                                                          • Running a business is a hustle because now you have to do everything alone.
                                                                                                          • Networking is crucial. But remember, it’s not about transactional relationships; it’s about giving and genuinely investing in that relationship professionally.
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s takeaways

                                                                                                          • Nothing good comes easy.
                                                                                                          • Always have a plan B.
                                                                                                          • Recognize the role of luck in life. Sometimes the world accelerates your plans, and sometimes, it kicks you in the ass.
                                                                                                          
                                                                                                          

                                                                                                          Actionable advice

                                                                                                          Always have confidence, be positive, and leave your comfort zone. Keep reinventing yourself, learning, and upskilling.

                                                                                                          Sampark’s recommendation

                                                                                                          Sampark recommends two online courses on his website:

                                                                                                          • Becoming a Champion of LinkedIn: teaches you how to use LinkedIn to build your personal brand and how to build a network on the platform.
                                                                                                          • How to Be a Rockstar at Work: teaches you how to upscale your career and fast-track your profile even in a job scenario.
                                                                                                          
                                                                                                          

                                                                                                          No.1 goal for the next 12 months

                                                                                                          Sampark’s number one goal for the next 12 months is to go full throttle into corporate training across three verticals: personal branding and LinkedIn, sales and marketing, and employee capability building.

                                                                                                          Parting words

                                                                                                           

                                                                                                          “Be positive. Be confident and keep building on your brand. Trust me, sooner or later, you’ll reach where you want to go. I might be a little later due to whatever obstacles that come by, but you’ll reach where you deserve to be.”

                                                                                                          Sampark Sachdeva

                                                                                                           

                                                                                                          [spp-transcript]

                                                                                                           

                                                                                                          Connect with Sampark Sachdeva

                                                                                                          • LinkedIn
                                                                                                          • Facebook
                                                                                                          • Instagram
                                                                                                          • YouTube
                                                                                                          • Website 
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s books

                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • My Worst Investment Ever
                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s online programs

                                                                                                          • Valuation Master Class
                                                                                                          • The Become a Better Investor Community
                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • Finance Made Ridiculously Simple
                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                          • Achieve Your Goals
                                                                                                          
                                                                                                          

                                                                                                          Connect with Andrew Stotz:

                                                                                                          • astotz.com
                                                                                                          • LinkedIn
                                                                                                          • Facebook
                                                                                                          • Instagram
                                                                                                          • Twitter
                                                                                                          • YouTube
                                                                                                          • My Worst Investment Ever Podcast
                                                                                                          
                                                                                                          ]]>BIO: Sampark Sachdeva has 12 years of corporate experience across Asian Paints and other businesses.

                                                                                                          STORY: Sampark let the security of his corporate job distract him from building a business out of his love for training. It wasn’t until COVID struck and he found himself without a job that he decided to work on the plan. The business turned out to be a huge success.

                                                                                                          LEARNING: Nothing good comes easy. Don’t let job security restrict you from pursuing your entrepreneurial dreams.

                                                                                                           

                                                                                                          “No matter how bad your situation might be, the victim card can only be played once. You can’t keep playing that card again and again.”

                                                                                                          Sampark Sachdeva

                                                                                                           

                                                                                                          Guest profile

                                                                                                          Sampark Sachdeva has 12 years of corporate experience across Asian Paints and other businesses. He was awarded the best digital coach of 2021 at the India coaching awards. He was a TEDx speaker in 2020 and won the LinkedIn Spotlight Award in 2019, recognizing him as one of India’s top content creators. Paul Ryder and Oracle also awarded Sampark as a top marketing and sales professional in 2019.

                                                                                                          Sampark has trained over 20,000 people across 125 sessions across 10 countries. He has over 125,000 followers across social media channels.

                                                                                                          Worst investment ever

                                                                                                          Sampark had an excellent corporate career. He was with Asian Paints, India’s largest paints company, for over five years. In 2015 he moved to Ola, the Indian Uber, and was there for three years. Then he moved to Oyo, the country’s largest hospitality brand, for another two years. Sampark won the Top 100 Marketing and Sales Professionals Award during this career journey. So yes, everything was going well on the corporate side.

                                                                                                          On the passion side, Sampark had been writing on LinkedIn for close to six years. He’d posted over 2000 posts in 2019 and won the LinkedIn Spotlight Award. Everything seemed rosy, and Sampark felt this was the time to take off.

                                                                                                          In 2020, Sampark moved into a new role in the same organization. But that’s when COVID struck. He was in the hospitality industry, leading corporate events. He had just been in that role for a few months when the lockdown occurred. In one day, everything stopped.

                                                                                                          Sampark sat down with his family, and they looked at their savings. They could survive for a couple of years with what they had. Sampark decided to explore a plan he had put on the back burner. Sampark loved training, and after getting the content creator award, he consulted his mentors on how to make something out of his love for training.

                                                                                                          They all advised him to work on the plan for the next three to four years and then look at how to do it long-term. But when the lockdown started, the three-year plan became an overnight plan. Sampark decided to give himself four months to execute the plan. If it didn’t work, he still had a corporate career to return to after the lockdown.

                                                                                                          At the end of four months, Sampark did a review and realized the training business was going better than he expected. He gave himself another four months, and it was still going well. He continued doing it until April 2022, when an old boss offered him a job. Sampark turned down the job because his business was doing well. He had trained close to 80,000 people and had a lot of clients in the pipeline. Sampark’s only regret is having waited for so long to start his passion venture.

                                                                                                          Lessons learned

                                                                                                          • As a corporate professional, you’re restricted by your own thoughts and the false sense of security.
                                                                                                          • Running a business is a hustle because now you have to do everything alone.
                                                                                                          • Networking is crucial. But remember, it’s not about transactional relationships; it’s about giving and genuinely investing in that relationship professionally.
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s takeaways

                                                                                                          • Nothing good comes easy.
                                                                                                          • Always have a plan B.
                                                                                                          • Recognize the role of luck in life. Sometimes the world accelerates your plans, and sometimes, it kicks you in the ass.
                                                                                                          
                                                                                                          

                                                                                                          Actionable advice

                                                                                                          Always have confidence, be positive, and leave your comfort zone. Keep reinventing yourself, learning, and upskilling.

                                                                                                          Sampark’s recommendation

                                                                                                          Sampark recommends two online courses on his website:

                                                                                                          • Becoming a Champion of LinkedIn: teaches you how to use LinkedIn to build your personal brand and how to build a network on the platform.
                                                                                                          • How to Be a Rockstar at Work: teaches you how to upscale your career and fast-track your profile even in a job scenario.
                                                                                                          
                                                                                                          

                                                                                                          No.1 goal for the next 12 months

                                                                                                          Sampark’s number one goal for the next 12 months is to go full throttle into corporate training across three verticals: personal branding and LinkedIn, sales and marketing, and employee capability building.

                                                                                                          Parting words

                                                                                                           

                                                                                                          “Be positive. Be confident and keep building on your brand. Trust me, sooner or later, you’ll reach where you want to go. I might be a little later due to whatever obstacles that come by, but you’ll reach where you deserve to be.”

                                                                                                          Sampark Sachdeva

                                                                                                           

                                                                                                          [spp-transcript]

                                                                                                           

                                                                                                          Connect with Sampark Sachdeva

                                                                                                          • LinkedIn
                                                                                                          • Facebook
                                                                                                          • Instagram
                                                                                                          • YouTube
                                                                                                          • Website 
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s books

                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • My Worst Investment Ever
                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s online programs

                                                                                                          • Valuation Master Class
                                                                                                          • The Become a Better Investor Community
                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • Finance Made Ridiculously Simple
                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                          • Achieve Your Goals
                                                                                                          
                                                                                                          

                                                                                                          Connect with Andrew Stotz:

                                                                                                          • astotz.com
                                                                                                          • LinkedIn
                                                                                                          • Facebook
                                                                                                          • Instagram
                                                                                                          • Twitter
                                                                                                          • YouTube
                                                                                                          • My Worst Investment Ever Podcast
                                                                                                          
                                                                                                          ]]>d7d568c2-0e37-4824-b9e3-02cdf5a58308Mon, 03 Jul 2023 06:00:00 +070029:52falsefullISMS 26: Larry Swedroe – Are You Subject to the Endowment Effect or the Hot Streak Fallacy?In this episode of Investment Strategy Made Simple (ISMS), Andrew and Larry discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this seventh episode, they talk about mistake number 11: Do you let the price paid affect your decision to continue to hold an asset? And mistake number 12: Are you subject to the fallacy of the hot streak?

                                                                                                          LEARNING: Look at everything you own from an economic perspective and decide whether to keep holding or selling. Avoid FOMO (fear of missing out) and stock picking; build a diversified portfolio.

                                                                                                           

                                                                                                          “One of the biggest values of a good advisor is to educate people on rational economic decision-making so they can make informed investment decisions.”

                                                                                                          Larry Swedroe

                                                                                                           

                                                                                                          In today’s episode, Andrew continues his discussion with Larry Swedroe, head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                                                          Larry deeply understands the world of academic research and investing, especially risk. Today Andrew and Larry discuss a chapter of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this sixth episode, they talk about mistake number 9: Do you avoid admitting your investment mistakes? And mistake number 10: Do you pay attention to the experts?

                                                                                                          Missed out on previous mistakes? Check them out:

                                                                                                          • ISMS 8: Larry Swedroe – Are You Overconfident in Your Skills?
                                                                                                          • ISMS 17: Larry Swedroe – Do You Project Recent Trends Indefinitely Into the Future?
                                                                                                          • ISMS 20: Larry Swedroe – Do You Extrapolate From Small Samples and Trust Your Intuition?
                                                                                                          • ISMS 23: Larry Swedroe – Do You Allow Yourself to Be Influenced by Your Ego and Herd Mentality?
                                                                                                          • ISMS 24: Larry Swedroe – Confusing Skill and Luck Can Stop You From Investing Wisely
                                                                                                          • ISMS 25: Larry Swedroe – Admit Your Mistakes and Don’t Listen to Fake Experts
                                                                                                          
                                                                                                          

                                                                                                          Mistake number 11: Do you let the price paid affect your decision to continue to hold an asset?

                                                                                                          According to Larry, people value things more when they own them. This is due to the endowment effect, which causes people to put extra value emotionally and make decisions based on this. This type of decision-making is utterly irrational from an economic perspective.

                                                                                                          The endowment effect is a big mistake that investors make, especially when they get gifted stocks or other investment instruments from a parent, spouse, relative, friend, etc. They then hold on to this concentrated risk when diversification is the best investment method.

                                                                                                          Whenever you receive an investment as a gift, look at it from an economic perspective and ask yourself if you had money equivalent to the value of that gift would you invest in it? If the answer is no, then sell the gifted investment. If it’s yes, then keep it.

                                                                                                          Larry also mentions another reaction to the endowment effect, where people think things familiar to them are safer. So, for example, a US investor will overweight US stocks, a Japanese investor will overweight Japanese stocks, or a French investor will think French stocks are the highest-performing and safest investments.

                                                                                                          Mistake number 12: Are you subject to the fallacy of the hot streak?

                                                                                                          Larry explains the fallacy of the hot streak as the habit of placing an overwhelming amount of value on what has happened recently. This common fallacy is closely related to recency bias.

                                                                                                          According to Larry, we confuse skill with luck leading to the fallacy of a hot streak. If you find yourself amused by an investment’s recent success, first do statistical tests to see whether this was a random outcome above the expected average. For example, over a 20-year period, you would expect 2% of fund managers to outperform randomly. So if the actual number is 1%, we know fewer outperform than randomly expected. Therefore, we shouldn’t attach any value to the ones who did.

                                                                                                          To deal with the fallacy of the hot streak, avoid FOMO and build a diversified portfolio. Also, avoid picking individual stocks that have far more to do with speculation than with investing.

                                                                                                          About Larry Swedroe

                                                                                                          Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                                                          Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                                                          Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                                                          Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                                                           

                                                                                                          [spp-transcript]

                                                                                                           

                                                                                                          Connect with Larry Swedroe

                                                                                                          • LinkedIn
                                                                                                          • Twitter
                                                                                                          • Website
                                                                                                          • Books
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s books

                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • My Worst Investment Ever
                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                          
                                                                                                          

                                                                                                          Andrew’s online programs

                                                                                                          • Valuation Master Class
                                                                                                          • The Become a Better Investor Community
                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                          • Finance Made Ridiculously Simple
                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                          • Transform Your...]]>In this episode of Investment Strategy Made Simple (ISMS), Andrew and Larry discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this seventh episode, they talk about mistake number 11: Do you let the price paid affect your decision to continue to hold an asset? And mistake number 12: Are you subject to the fallacy of the hot streak?

                                                                                                            LEARNING: Look at everything you own from an economic perspective and decide whether to keep holding or selling. Avoid FOMO (fear of missing out) and stock picking; build a diversified portfolio.

                                                                                                             

                                                                                                            “One of the biggest values of a good advisor is to educate people on rational economic decision-making so they can make informed investment decisions.”

                                                                                                            Larry Swedroe

                                                                                                             

                                                                                                            In today’s episode, Andrew continues his discussion with Larry Swedroe, head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                                                            Larry deeply understands the world of academic research and investing, especially risk. Today Andrew and Larry discuss a chapter of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this sixth episode, they talk about mistake number 9: Do you avoid admitting your investment mistakes? And mistake number 10: Do you pay attention to the experts?

                                                                                                            Missed out on previous mistakes? Check them out:

                                                                                                            • ISMS 8: Larry Swedroe – Are You Overconfident in Your Skills?
                                                                                                            • ISMS 17: Larry Swedroe – Do You Project Recent Trends Indefinitely Into the Future?
                                                                                                            • ISMS 20: Larry Swedroe – Do You Extrapolate From Small Samples and Trust Your Intuition?
                                                                                                            • ISMS 23: Larry Swedroe – Do You Allow Yourself to Be Influenced by Your Ego and Herd Mentality?
                                                                                                            • ISMS 24: Larry Swedroe – Confusing Skill and Luck Can Stop You From Investing Wisely
                                                                                                            • ISMS 25: Larry Swedroe – Admit Your Mistakes and Don’t Listen to Fake Experts
                                                                                                            
                                                                                                            

                                                                                                            Mistake number 11: Do you let the price paid affect your decision to continue to hold an asset?

                                                                                                            According to Larry, people value things more when they own them. This is due to the endowment effect, which causes people to put extra value emotionally and make decisions based on this. This type of decision-making is utterly irrational from an economic perspective.

                                                                                                            The endowment effect is a big mistake that investors make, especially when they get gifted stocks or other investment instruments from a parent, spouse, relative, friend, etc. They then hold on to this concentrated risk when diversification is the best investment method.

                                                                                                            Whenever you receive an investment as a gift, look at it from an economic perspective and ask yourself if you had money equivalent to the value of that gift would you invest in it? If the answer is no, then sell the gifted investment. If it’s yes, then keep it.

                                                                                                            Larry also mentions another reaction to the endowment effect, where people think things familiar to them are safer. So, for example, a US investor will overweight US stocks, a Japanese investor will overweight Japanese stocks, or a French investor will think French stocks are the highest-performing and safest investments.

                                                                                                            Mistake number 12: Are you subject to the fallacy of the hot streak?

                                                                                                            Larry explains the fallacy of the hot streak as the habit of placing an overwhelming amount of value on what has happened recently. This common fallacy is closely related to recency bias.

                                                                                                            According to Larry, we confuse skill with luck leading to the fallacy of a hot streak. If you find yourself amused by an investment’s recent success, first do statistical tests to see whether this was a random outcome above the expected average. For example, over a 20-year period, you would expect 2% of fund managers to outperform randomly. So if the actual number is 1%, we know fewer outperform than randomly expected. Therefore, we shouldn’t attach any value to the ones who did.

                                                                                                            To deal with the fallacy of the hot streak, avoid FOMO and build a diversified portfolio. Also, avoid picking individual stocks that have far more to do with speculation than with investing.

                                                                                                            About Larry Swedroe

                                                                                                            Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                                                            Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                                                            Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                                                            Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                                                             

                                                                                                            [spp-transcript]

                                                                                                             

                                                                                                            Connect with Larry Swedroe

                                                                                                            • LinkedIn
                                                                                                            • Twitter
                                                                                                            • Website
                                                                                                            • Books
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s books

                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                            • My Worst Investment Ever
                                                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s online programs

                                                                                                            • Valuation Master Class
                                                                                                            • The Become a Better Investor Community
                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                            • Finance Made Ridiculously Simple
                                                                                                            • FVMR Investing: Quantamental Investing Across the World
                                                                                                            • Become a Great Presenter and Increase Your Influence
                                                                                                            • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                            • Achieve Your Goals
                                                                                                            
                                                                                                            

                                                                                                            Connect with Andrew Stotz:

                                                                                                            • astotz.com
                                                                                                            • LinkedIn
                                                                                                            • Facebook
                                                                                                            • Instagram
                                                                                                            • Twitter
                                                                                                            • YouTube
                                                                                                            • My Worst Investment Ever Podcast
                                                                                                            
                                                                                                            

                                                                                                            Further reading mentioned

                                                                                                            • Larry Swedroe and RC Balaban, Investment Mistakes Even Smart Investors Make and How to Avoid Them
                                                                                                            • Philip E. Tetlock, Expert Political Judgment: How Good Is It? How Can We Know?
                                                                                                            • Carol Tavris and Elliot Aronson, Mistakes Were Made (But Not by Me): Third Edition: Why We Justify Foolish Beliefs, Bad Decisions, and Hurtful Acts
                                                                                                            • Richard Lawrence, The Model: 37 Years Investing in Asian Equities
                                                                                                            
                                                                                                            ]]>c326c716-1d0e-4d08-ad21-d869c6f81832Fri, 30 Jun 2023 06:00:00 +070036:04falsefullVishal Bhardwaj – Do Not Let Emotions Run Your Business for YouBIO: Vishal Bhardwaj is a serial entrepreneur and founder of Predictions For Success, Engineer By Mistake, and Passionate Management Services.

                                                                                                            STORY: Vishal gained immediate success when he started his company and had about 100,000 followers. He thought this indicated that people loved what he was doing, so he decided to sell a corporate gift for Diwali 15 days before the festival. He didn’t do any market research, so when he went to sell the product, no one would buy it as they had ordered their gifts months in advance.

                                                                                                            LEARNING: Do proper research before you jump into anything. Don’t let emotions run your business for you. Timing is as important as pricing.

                                                                                                             

                                                                                                            “You may have a lot of good audiences, but those may not be the people who will purchase the products you introduce.”

                                                                                                            Vishal Bhardwaj

                                                                                                             

                                                                                                            Guest profile

                                                                                                            Vishal Bhardwaj is a serial entrepreneur and founder of Predictions For Success, Engineer By Mistake, and Passionate Management Services. He loves to inspire students and aspiring entrepreneurs and has been at TED Talks, TCS, Money Control, Bakstage, and others.

                                                                                                            For any personal guidance on career and relationships, Vishal is reachable on WhatsApp.

                                                                                                            Worst investment ever

                                                                                                            Vishal started Predictions for Success in 2014 and got around 100,000 followers. This immediate success motivated him to leverage everything, and he thought that whatever he touched would turn into gold because people loved what he was doing. Vishal and his team thought selling something would be a good idea.

                                                                                                            Diwali was just 15 days away, and Vishal suggested to his partner that they sell corporate gifts for the famous Indian festival. They started shopping for things even though they had no idea what the people would want. They thought having something in the range of $10 would be easy to crack. While at the market, Vishal suggested that rather than purchasing everything at a wholesale rate, they should buy something a little pricey but as a sample. So, if it didn’t get sold, they would only have a little inventory sitting idle. His partner was against the suggestion. He thought they should buy cheap and in bulk. Vishal insisted that they forget about profits and try to learn something.

                                                                                                            They invested 100,000 rupees (about US$1,200) and purchased products in bulk. They did a professional photoshoot, and everything was exciting until it came time to sell the products. They talked to the companies to see if they were interested in purchasing the products, but the prices they quoted were less than even what the company had bought the products for. They couldn’t sell even a single product and had to give them out as gifts to their customers for the next three years. Vishal still has a couple of them lying around in his backyard.

                                                                                                            Lessons learned

                                                                                                            • Do proper research before you jump into anything.
                                                                                                            • Emotions can overwhelm you, but do not let them run your business for you.
                                                                                                            • Having an audience and having a customer who will purchase are two very different stages.
                                                                                                            • The timing of your launch is as important as the pricing of your product.
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s takeaways

                                                                                                            • Your audience isn’t necessarily there to buy. It could be there for the experience.
                                                                                                            • Start slow, think carefully, test the market, and test the response before you act.
                                                                                                            
                                                                                                            

                                                                                                            Actionable advice

                                                                                                            When you hear any idea, even a unicorn idea, wait seven days before acting on it. If you feel great about that idea after seven days, it’s good to go. If your emotions decrease daily, you either take more time to think about it or let go of the idea.

                                                                                                            Vishal’s recommendation

                                                                                                            Vishal recommends reading The Bhagavad Gita to learn the world within you to quickly discover the world outside.

                                                                                                            If you’re looking for any guidance regarding your personal or professional life or if you’re stuck and don’t know where to go, connect to Predictions for Success on WhatsApp, and Vishal and his team will help you tackle the problems you’re facing right now.

                                                                                                            No.1 goal for the next 12 months

                                                                                                            Vishal’s number one goal for the next 12 months is to read into the spirituality of one billion people.

                                                                                                             

                                                                                                            [spp-transcript]

                                                                                                             

                                                                                                            Connect with Vishal Bhardwaj

                                                                                                            • LinkedIn
                                                                                                            • Twitter
                                                                                                            • WhatsApp
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s books

                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                            • My Worst Investment Ever
                                                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s online programs

                                                                                                            • Valuation Master Class
                                                                                                            • The Become a Better Investor Community
                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                            • Finance Made Ridiculously Simple
                                                                                                            • FVMR Investing: Quantamental Investing Across the World
                                                                                                            • Become a Great Presenter and Increase Your Influence
                                                                                                            • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                            • Achieve Your Goals
                                                                                                            
                                                                                                            

                                                                                                            Connect with Andrew Stotz:

                                                                                                            • astotz.com
                                                                                                            • LinkedIn
                                                                                                            • Facebook
                                                                                                            • Instagram
                                                                                                            • Twitter
                                                                                                            • YouTube
                                                                                                            • My Worst Investment Ever Podcast
                                                                                                            
                                                                                                            ]]>BIO: Vishal Bhardwaj is a serial entrepreneur and founder of Predictions For Success, Engineer By Mistake, and Passionate Management Services.

                                                                                                            STORY: Vishal gained immediate success when he started his company and had about 100,000 followers. He thought this indicated that people loved what he was doing, so he decided to sell a corporate gift for Diwali 15 days before the festival. He didn’t do any market research, so when he went to sell the product, no one would buy it as they had ordered their gifts months in advance.

                                                                                                            LEARNING: Do proper research before you jump into anything. Don’t let emotions run your business for you. Timing is as important as pricing.

                                                                                                             

                                                                                                            “You may have a lot of good audiences, but those may not be the people who will purchase the products you introduce.”

                                                                                                            Vishal Bhardwaj

                                                                                                             

                                                                                                            Guest profile

                                                                                                            Vishal Bhardwaj is a serial entrepreneur and founder of Predictions For Success, Engineer By Mistake, and Passionate Management Services. He loves to inspire students and aspiring entrepreneurs and has been at TED Talks, TCS, Money Control, Bakstage, and others.

                                                                                                            For any personal guidance on career and relationships, Vishal is reachable on WhatsApp.

                                                                                                            Worst investment ever

                                                                                                            Vishal started Predictions for Success in 2014 and got around 100,000 followers. This immediate success motivated him to leverage everything, and he thought that whatever he touched would turn into gold because people loved what he was doing. Vishal and his team thought selling something would be a good idea.

                                                                                                            Diwali was just 15 days away, and Vishal suggested to his partner that they sell corporate gifts for the famous Indian festival. They started shopping for things even though they had no idea what the people would want. They thought having something in the range of $10 would be easy to crack. While at the market, Vishal suggested that rather than purchasing everything at a wholesale rate, they should buy something a little pricey but as a sample. So, if it didn’t get sold, they would only have a little inventory sitting idle. His partner was against the suggestion. He thought they should buy cheap and in bulk. Vishal insisted that they forget about profits and try to learn something.

                                                                                                            They invested 100,000 rupees (about US$1,200) and purchased products in bulk. They did a professional photoshoot, and everything was exciting until it came time to sell the products. They talked to the companies to see if they were interested in purchasing the products, but the prices they quoted were less than even what the company had bought the products for. They couldn’t sell even a single product and had to give them out as gifts to their customers for the next three years. Vishal still has a couple of them lying around in his backyard.

                                                                                                            Lessons learned

                                                                                                            • Do proper research before you jump into anything.
                                                                                                            • Emotions can overwhelm you, but do not let them run your business for you.
                                                                                                            • Having an audience and having a customer who will purchase are two very different stages.
                                                                                                            • The timing of your launch is as important as the pricing of your product.
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s takeaways

                                                                                                            • Your audience isn’t necessarily there to buy. It could be there for the experience.
                                                                                                            • Start slow, think carefully, test the market, and test the response before you act.
                                                                                                            
                                                                                                            

                                                                                                            Actionable advice

                                                                                                            When you hear any idea, even a unicorn idea, wait seven days before acting on it. If you feel great about that idea after seven days, it’s good to go. If your emotions decrease daily, you either take more time to think about it or let go of the idea.

                                                                                                            Vishal’s recommendation

                                                                                                            Vishal recommends reading The Bhagavad Gita to learn the world within you to quickly discover the world outside.

                                                                                                            If you’re looking for any guidance regarding your personal or professional life or if you’re stuck and don’t know where to go, connect to Predictions for Success on WhatsApp, and Vishal and his team will help you tackle the problems you’re facing right now.

                                                                                                            No.1 goal for the next 12 months

                                                                                                            Vishal’s number one goal for the next 12 months is to read into the spirituality of one billion people.

                                                                                                             

                                                                                                            [spp-transcript]

                                                                                                             

                                                                                                            Connect with Vishal Bhardwaj

                                                                                                            • LinkedIn
                                                                                                            • Twitter
                                                                                                            • WhatsApp
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s books

                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                            • My Worst Investment Ever
                                                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s online programs

                                                                                                            • Valuation Master Class
                                                                                                            • The Become a Better Investor Community
                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                            • Finance Made Ridiculously Simple
                                                                                                            • FVMR Investing: Quantamental Investing Across the World
                                                                                                            • Become a Great Presenter and Increase Your Influence
                                                                                                            • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                            • Achieve Your Goals
                                                                                                            
                                                                                                            

                                                                                                            Connect with Andrew Stotz:

                                                                                                            • astotz.com
                                                                                                            • LinkedIn
                                                                                                            • Facebook
                                                                                                            • Instagram
                                                                                                            • Twitter
                                                                                                            • YouTube
                                                                                                            • My Worst Investment Ever Podcast
                                                                                                            
                                                                                                            ]]>c63df138-604e-4790-bebc-db35f17ed0b2Thu, 29 Jun 2023 06:00:00 +070024:33falsefullHarjeet Khanduja – Work Smarter Not HarderBIO: Harjeet Khanduja is an international speaker, author, poet, visionary, inventor, influencer, and HR Leader. He is an alumnus of IIT Roorkee and INSEAD. He is currently working with Reliance Jio. 

                                                                                                            STORY: Harjeet regrets wasting so much of his life working hard instead of working smart. Though he succeeded in his career, he completely ignored his family and led an unbalanced life. 

                                                                                                            LEARNING: Learn how to delegate so you can have time to focus on other things in your life. You must care for your family and inner self to be more productive. 

                                                                                                             

                                                                                                            “When you harness everyone’s energy, then you can work in a broader environment and grow. When you’re happy, you can do more things in life, not just for your business.” 

                                                                                                            Harjeet Khanduja 

                                                                                                             

                                                                                                            Guest profile 

                                                                                                            Harjeet Khanduja is an international speaker, author, poet, visionary, inventor, influencer, and HR Leader. He is an alumnus of IIT Roorkee and INSEAD. He is currently working with Reliance Jio.  

                                                                                                            He is an SAP HCM consultant, Six Sigma Green Belt, and Assessor for Predictive Index. He has 3 published patents, and his book “Nothing About Business” has been a best-seller on Amazon. 

                                                                                                            Harjeet has been conferred with the HR Leadership Award, Pride of Nation Award, HR Personality of the Year, Global Digital Ambassador, Global Learning Award, ET HR Influencer of 2022, and Top 200 Global Leadership Voices of 2022. Harjeet has been a LinkedIn Power Profile, TEDx speaker, Guest Faculty at IIM Ahmedabad, Board Member of the Federation of World Academics, Member of the CII HR IR committee, and Co-chair of Nasscom Diversity Committee. 

                                                                                                            Worst investment ever 

                                                                                                            The first investment mistake Harjeet ever made was opening a PPF account because his father asked him to. Harjeet kept investing in that account year after year without knowing why he was investing. He regrets never having control over that decision. 

                                                                                                            Harjeet also regrets wasting so much of his life working hard instead of working smart. In every company Harjeet worked for, he’d work himself to the bone trying to prove his abilities. Even though he achieved massive success in every position he took up, his life outside work suffered. Harjeet barely had any time to spend with his family. After all the time and effort he put into his work, Harjeet soon realized his life was not balanced.  

                                                                                                            In 2012, Harjeet started looking at life holistically rather than unidimensional. Now his life is better, and his wife is happier. 

                                                                                                            Lessons learned 

                                                                                                            • Your team can solve problems on their own. You don’t need to hold their hands constantly; delegate and only assist where necessary.  
                                                                                                            • You must care for your family and inner self to be more productive. 
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s takeaways 

                                                                                                            • Life is a balance of opposing forces, and we’re constantly making trade-offs. 
                                                                                                            
                                                                                                            

                                                                                                            Actionable advice 

                                                                                                            Learn to delegate and trust. It will take time for others to catch up to your quality or delivery standards. But if you don’t start delegating, you’ll never have time to focus on other important parts of your life. 

                                                                                                            Parting words 

                                                                                                             

                                                                                                            “It’s okay to fail. Just believe in yourself. Whatever you’ve got, nobody can take it from you.” 

                                                                                                            Harjeet Khanduja 

                                                                                                            
                                                                                                            

                                                                                                            Connect with Harjeet Khanduja

                                                                                                            • LinkedIn
                                                                                                            • Twitter
                                                                                                            • Instagram
                                                                                                            • YouTube
                                                                                                            • Blog
                                                                                                            • Book
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s books

                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                            • My Worst Investment Ever
                                                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s online programs

                                                                                                            • Valuation Master Class
                                                                                                            • The Become a Better Investor Community
                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                            • Finance Made Ridiculously Simple
                                                                                                            • FVMR Investing: Quantamental Investing Across the World
                                                                                                            • Become a Great Presenter and Increase Your Influence
                                                                                                            • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                            • Achieve Your Goals
                                                                                                            
                                                                                                            

                                                                                                            Connect with Andrew Stotz:

                                                                                                            • astotz.com
                                                                                                            • LinkedIn
                                                                                                            • Facebook
                                                                                                            • Instagram
                                                                                                            • Twitter
                                                                                                            • YouTube
                                                                                                            • My Worst Investment Ever Podcast
                                                                                                            
                                                                                                            ]]>BIO: Harjeet Khanduja is an international speaker, author, poet, visionary, inventor, influencer, and HR Leader. He is an alumnus of IIT Roorkee and INSEAD. He is currently working with Reliance Jio. 

                                                                                                            STORY: Harjeet regrets wasting so much of his life working hard instead of working smart. Though he succeeded in his career, he completely ignored his family and led an unbalanced life. 

                                                                                                            LEARNING: Learn how to delegate so you can have time to focus on other things in your life. You must care for your family and inner self to be more productive. 

                                                                                                             

                                                                                                            “When you harness everyone’s energy, then you can work in a broader environment and grow. When you’re happy, you can do more things in life, not just for your business.” 

                                                                                                            Harjeet Khanduja 

                                                                                                             

                                                                                                            Guest profile 

                                                                                                            Harjeet Khanduja is an international speaker, author, poet, visionary, inventor, influencer, and HR Leader. He is an alumnus of IIT Roorkee and INSEAD. He is currently working with Reliance Jio.  

                                                                                                            He is an SAP HCM consultant, Six Sigma Green Belt, and Assessor for Predictive Index. He has 3 published patents, and his book “Nothing About Business” has been a best-seller on Amazon. 

                                                                                                            Harjeet has been conferred with the HR Leadership Award, Pride of Nation Award, HR Personality of the Year, Global Digital Ambassador, Global Learning Award, ET HR Influencer of 2022, and Top 200 Global Leadership Voices of 2022. Harjeet has been a LinkedIn Power Profile, TEDx speaker, Guest Faculty at IIM Ahmedabad, Board Member of the Federation of World Academics, Member of the CII HR IR committee, and Co-chair of Nasscom Diversity Committee. 

                                                                                                            Worst investment ever 

                                                                                                            The first investment mistake Harjeet ever made was opening a PPF account because his father asked him to. Harjeet kept investing in that account year after year without knowing why he was investing. He regrets never having control over that decision. 

                                                                                                            Harjeet also regrets wasting so much of his life working hard instead of working smart. In every company Harjeet worked for, he’d work himself to the bone trying to prove his abilities. Even though he achieved massive success in every position he took up, his life outside work suffered. Harjeet barely had any time to spend with his family. After all the time and effort he put into his work, Harjeet soon realized his life was not balanced.  

                                                                                                            In 2012, Harjeet started looking at life holistically rather than unidimensional. Now his life is better, and his wife is happier. 

                                                                                                            Lessons learned 

                                                                                                            • Your team can solve problems on their own. You don’t need to hold their hands constantly; delegate and only assist where necessary.  
                                                                                                            • You must care for your family and inner self to be more productive. 
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s takeaways 

                                                                                                            • Life is a balance of opposing forces, and we’re constantly making trade-offs. 
                                                                                                            
                                                                                                            

                                                                                                            Actionable advice 

                                                                                                            Learn to delegate and trust. It will take time for others to catch up to your quality or delivery standards. But if you don’t start delegating, you’ll never have time to focus on other important parts of your life. 

                                                                                                            Parting words 

                                                                                                             

                                                                                                            “It’s okay to fail. Just believe in yourself. Whatever you’ve got, nobody can take it from you.” 

                                                                                                            Harjeet Khanduja 

                                                                                                            
                                                                                                            

                                                                                                            Connect with Harjeet Khanduja

                                                                                                            • LinkedIn
                                                                                                            • Twitter
                                                                                                            • Instagram
                                                                                                            • YouTube
                                                                                                            • Blog
                                                                                                            • Book
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s books

                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                            • My Worst Investment Ever
                                                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s online programs

                                                                                                            • Valuation Master Class
                                                                                                            • The Become a Better Investor Community
                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                            • Finance Made Ridiculously Simple
                                                                                                            • FVMR Investing: Quantamental Investing Across the World
                                                                                                            • Become a Great Presenter and Increase Your Influence
                                                                                                            • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                            • Achieve Your Goals
                                                                                                            
                                                                                                            

                                                                                                            Connect with Andrew Stotz:

                                                                                                            • astotz.com
                                                                                                            • LinkedIn
                                                                                                            • Facebook
                                                                                                            • Instagram
                                                                                                            • Twitter
                                                                                                            • YouTube
                                                                                                            • My Worst Investment Ever Podcast
                                                                                                            
                                                                                                            ]]>536f38e0-0d62-4908-a5f1-be120f24b0edWed, 28 Jun 2023 06:00:00 +070029:55falsefullLaurens Swinkels – Stay Liquid Even When Investing Long-TermBIO: Laurens Swinkels is an Associate Professor of Finance at Erasmus University in Rotterdam and Executive Director and Head of Quant Strategy at Robeco’s Sustainable Multi-Asset Strategies team.

                                                                                                            STORY: Lauren bought a house in Rotterdam. Just five years later, he had to move to Norway. Laurens managed to sell the house in the Netherlands many years later at a loss.

                                                                                                            LEARNING: Liquidity is very important even when investing long-term. Remove emotions from your decision-making.

                                                                                                             

                                                                                                            “Even though you’re a long-term investor and you think you’re really long-term, there may be things that cross your path that require liquidity.”

                                                                                                            Laurens Swinkels

                                                                                                             

                                                                                                            Guest profile

                                                                                                            Laurens Swinkels is an Associate Professor of Finance at Erasmus University in Rotterdam and Executive Director and Head of Quant Strategy at Robeco’s Sustainable Multi-Asset Strategies team. His areas of expertise include allocation research and empirical asset pricing. He teaches Finance courses and has published his academic work in peer-reviewed journals such as the Journal of Financial Economics. Laurens holds a Ph.D. in Finance and a Master’s in Econometrics from Tilburg University in the Netherlands.

                                                                                                            Worst investment ever

                                                                                                            When Laurens started his masters in Tilburg, Netherlands, he decided to move out of his parent’s home. He was torn between buying an apartment and renting one because the real estate prices were quite favorable for buyers then. He decided to rent since he would only be in school for a few years.

                                                                                                            After completing his master’s, Laurens decided to do a Ph.D. and stayed another five years in Tilburg. He was still renting his apartment. After graduating, Laurens moved to Amsterdam, where the house prices were unimaginably high. Hoping that the prices would go down, he rented an apartment. But the prices just kept going up. Laurens had to commute daily from Amsterdam to Rotterdam. After getting tired of the commute, Laurens decided to buy a house in Rotterdam, where the prices were lower than in Amsterdam.

                                                                                                            Laurens didn’t foresee that he would have to move to Norway five years after that decision. At this point, the house he’d bought was 25% underwater. The investment in this house made a large part of his wealth, so taking a 25% loss was tough for Laurens. He managed to sell the house only two years ago.

                                                                                                            Lessons learned

                                                                                                            • The liquidity that allows you to sell and buy a house in another location whenever you want is very valuable.
                                                                                                            • Even when you’re investing long-term, liquidity is still essential.
                                                                                                            • Remove emotions from your decision-making.
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s takeaways

                                                                                                            • Buying a house is a trap because you may lack liquidity.
                                                                                                            • Home buying comes with the risk of not realizing the final capital gain that you thought you would.
                                                                                                            
                                                                                                            

                                                                                                            Actionable advice

                                                                                                            If you’re not yet ready to buy a home or don’t know where to buy, you can first get exposure to real estate through listed markets.

                                                                                                            Lauren’s recommendations

                                                                                                            Laurens recommends his data page on the university website, where you can download datasets if you want to do number crunching when investing. You can also check out Google Scholar or SSRN, where people post their latest thoughts. You can set alerts and get notified when papers on topics you’re interested in are published. If you don’t have the time for that, there are several people, like Larry Swedroe, that have blogs that summarize the papers for you and make them easily digestible.

                                                                                                            No.1 goal for the next 12 months

                                                                                                            Lauren’s number one goal for the next 12 months is to discover things he doesn’t know yet so he can change his prior ideas on how financial markets work.

                                                                                                            Parting words

                                                                                                             

                                                                                                            “Till next time, take care of yourselves and each other.”

                                                                                                            Laurens Swinkels

                                                                                                             

                                                                                                            [spp-transcript]

                                                                                                             

                                                                                                            Connect with Laurens Swinkels

                                                                                                            • LinkedIn
                                                                                                            • Twitter
                                                                                                            • Blog
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s books

                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                            • My Worst Investment Ever
                                                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s online programs

                                                                                                            • Valuation Master Class
                                                                                                            • The Become a Better Investor Community
                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                            • Finance Made Ridiculously Simple
                                                                                                            • FVMR Investing: Quantamental Investing Across the World
                                                                                                            • Become a Great Presenter and Increase Your Influence
                                                                                                            • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                            • Achieve Your Goals
                                                                                                            
                                                                                                            

                                                                                                            Connect with Andrew Stotz:

                                                                                                            • astotz.com
                                                                                                            • LinkedIn
                                                                                                            • Facebook
                                                                                                            • Instagram
                                                                                                            • Twitter
                                                                                                            • YouTube
                                                                                                            • My Worst Investment Ever Podcast
                                                                                                            
                                                                                                            ]]>BIO: Laurens Swinkels is an Associate Professor of Finance at Erasmus University in Rotterdam and Executive Director and Head of Quant Strategy at Robeco’s Sustainable Multi-Asset Strategies team.

                                                                                                            STORY: Lauren bought a house in Rotterdam. Just five years later, he had to move to Norway. Laurens managed to sell the house in the Netherlands many years later at a loss.

                                                                                                            LEARNING: Liquidity is very important even when investing long-term. Remove emotions from your decision-making.

                                                                                                             

                                                                                                            “Even though you’re a long-term investor and you think you’re really long-term, there may be things that cross your path that require liquidity.”

                                                                                                            Laurens Swinkels

                                                                                                             

                                                                                                            Guest profile

                                                                                                            Laurens Swinkels is an Associate Professor of Finance at Erasmus University in Rotterdam and Executive Director and Head of Quant Strategy at Robeco’s Sustainable Multi-Asset Strategies team. His areas of expertise include allocation research and empirical asset pricing. He teaches Finance courses and has published his academic work in peer-reviewed journals such as the Journal of Financial Economics. Laurens holds a Ph.D. in Finance and a Master’s in Econometrics from Tilburg University in the Netherlands.

                                                                                                            Worst investment ever

                                                                                                            When Laurens started his masters in Tilburg, Netherlands, he decided to move out of his parent’s home. He was torn between buying an apartment and renting one because the real estate prices were quite favorable for buyers then. He decided to rent since he would only be in school for a few years.

                                                                                                            After completing his master’s, Laurens decided to do a Ph.D. and stayed another five years in Tilburg. He was still renting his apartment. After graduating, Laurens moved to Amsterdam, where the house prices were unimaginably high. Hoping that the prices would go down, he rented an apartment. But the prices just kept going up. Laurens had to commute daily from Amsterdam to Rotterdam. After getting tired of the commute, Laurens decided to buy a house in Rotterdam, where the prices were lower than in Amsterdam.

                                                                                                            Laurens didn’t foresee that he would have to move to Norway five years after that decision. At this point, the house he’d bought was 25% underwater. The investment in this house made a large part of his wealth, so taking a 25% loss was tough for Laurens. He managed to sell the house only two years ago.

                                                                                                            Lessons learned

                                                                                                            • The liquidity that allows you to sell and buy a house in another location whenever you want is very valuable.
                                                                                                            • Even when you’re investing long-term, liquidity is still essential.
                                                                                                            • Remove emotions from your decision-making.
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s takeaways

                                                                                                            • Buying a house is a trap because you may lack liquidity.
                                                                                                            • Home buying comes with the risk of not realizing the final capital gain that you thought you would.
                                                                                                            
                                                                                                            

                                                                                                            Actionable advice

                                                                                                            If you’re not yet ready to buy a home or don’t know where to buy, you can first get exposure to real estate through listed markets.

                                                                                                            Lauren’s recommendations

                                                                                                            Laurens recommends his data page on the university website, where you can download datasets if you want to do number crunching when investing. You can also check out Google Scholar or SSRN, where people post their latest thoughts. You can set alerts and get notified when papers on topics you’re interested in are published. If you don’t have the time for that, there are several people, like Larry Swedroe, that have blogs that summarize the papers for you and make them easily digestible.

                                                                                                            No.1 goal for the next 12 months

                                                                                                            Lauren’s number one goal for the next 12 months is to discover things he doesn’t know yet so he can change his prior ideas on how financial markets work.

                                                                                                            Parting words

                                                                                                             

                                                                                                            “Till next time, take care of yourselves and each other.”

                                                                                                            Laurens Swinkels

                                                                                                             

                                                                                                            [spp-transcript]

                                                                                                             

                                                                                                            Connect with Laurens Swinkels

                                                                                                            • LinkedIn
                                                                                                            • Twitter
                                                                                                            • Blog
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s books

                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                            • My Worst Investment Ever
                                                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s online programs

                                                                                                            • Valuation Master Class
                                                                                                            • The Become a Better Investor Community
                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                            • Finance Made Ridiculously Simple
                                                                                                            • FVMR Investing: Quantamental Investing Across the World
                                                                                                            • Become a Great Presenter and Increase Your Influence
                                                                                                            • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                            • Achieve Your Goals
                                                                                                            
                                                                                                            

                                                                                                            Connect with Andrew Stotz:

                                                                                                            • astotz.com
                                                                                                            • LinkedIn
                                                                                                            • Facebook
                                                                                                            • Instagram
                                                                                                            • Twitter
                                                                                                            • YouTube
                                                                                                            • My Worst Investment Ever Podcast
                                                                                                            
                                                                                                            ]]>4b28c02b-b509-470b-9abe-b87c8496696cMon, 26 Jun 2023 06:00:00 +070037:53falsefullSpencer Jakab – Don’t Take Investment Tips from PeopleBIO: Spencer Jakab is the global editor of the Wall Street Journal’s financial and economic analysis column, Heard on the Street. Prior to becoming a financial journalist 20 years ago, he was a top-rated emerging market stock analyst.

                                                                                                            STORY: Spencer took investment advice without doing due diligence and ended up losing his entire investment.

                                                                                                            LEARNING: Don’t take investment tips from people; do your due diligence. Diversify your portfolio. Don’t invest more than you can lose.

                                                                                                             

                                                                                                            “Don’t take investment tips from people because those who tell don’t know, and those who know, don’t tell.”

                                                                                                            Spencer Jakab

                                                                                                             

                                                                                                            Guest profile

                                                                                                            Spencer Jakab is the global editor of the Wall Street Journal’s financial and economic analysis column, Heard on the Street. Prior to becoming a financial journalist 20 years ago, he was a top-rated emerging market stock analyst. He has written two books, the most recent being “The Revolution That Wasn’t,” about novice investors caught up in GameStop mania.

                                                                                                            Worst investment ever

                                                                                                            Spencer moved to Hungary in the early 90s because he was very excited about all the changes due to the fall of the Berlin Wall and the opening up of the Eastern European region. Spencer wanted to make money and also see history being made.

                                                                                                            After writing to many investment banks looking, he got a couple of interviews with local accountants and banks. Spencer accepted a job as a country analyst in Hungary. He had no idea what he was doing.

                                                                                                            The job was to meet fund managers who were wealthy, nicely dressed, and suave, talking about all these things they had done and how much money they’d made from various investments. He thought they were so clever and believed that if he followed their lead, he’d be rich too. At the time, Spencer had saved $5,000. He invested half the money in a Southeast Asia fund and the other half in a US bond fund. The market became bearish, and Spencer lost most of his investment.

                                                                                                            Later, Spencer met a suave, sophisticated fund manager who convinced him to invest in a Canadian company. The company made permanent magnets. The company had a PE ratio of about nine, which is very low. Spencer looked the company up and read the annual report. He still couldn’t figure out what a permanent magnet was, but it sounded impressive and very high-tech. The company also had all these PhDs working for them. So Spencer decided to invest in it. He also told his good friend about it, who also invested.

                                                                                                            Some time went by, and one day as Spencer read the newspaper, he came across a story of how the FBI had raided the offices of the magnet company. The company was run by Russian mobsters and was just a front. Obviously, the stock went to zero after the expose. Spencer and his friend lost all their investment.

                                                                                                            Lessons learned

                                                                                                            • Don’t take investment tips from people; do your due diligence.
                                                                                                            • Do your own research.
                                                                                                            • Diversify your portfolio.
                                                                                                            • Only invest what you can lose.
                                                                                                            • If you want to be a stock picker, do it with a small amount of your money.
                                                                                                            • Invest in diversified, low-cost funds, hold for the long term, and don’t try to time the market. You’ll do better than 85% of fund managers over any 10-year period.
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s takeaways

                                                                                                            • Only buy a stock recommended by a person after researching it.
                                                                                                            • Focus on taking care of yourself, but be very careful about starting to promote something to other people because it can backfire on you.
                                                                                                            
                                                                                                            

                                                                                                            Actionable advice

                                                                                                            Stop looking for the needle in the haystack; buy the whole haystack. This way, you’ll buy into a big diversified pool of investments and do okay even if there’s inflation.

                                                                                                            Spencer’s recommendations

                                                                                                            Spencer recommends using robo-advisors because it’s a cheap way of monitoring your investment portfolio, especially if you’re starting out.

                                                                                                            No.1 goal for the next 12 months

                                                                                                            Spencer’s number one goal for the next 12 months is to make sense of the current economy, understand what’s going on, be nuanced, and not get caught in a head fake.

                                                                                                            Parting words

                                                                                                             

                                                                                                            “My motto in investing is to be cheap and lazy. That’s the formula for success.”

                                                                                                            Spencer Jakab

                                                                                                             

                                                                                                            [spp-transcript]

                                                                                                             

                                                                                                            Connect with Spencer Jakab

                                                                                                            • LinkedIn
                                                                                                            • Twitter
                                                                                                            • Website
                                                                                                            • Book
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s books

                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                            • My Worst Investment Ever
                                                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s online programs

                                                                                                            • Valuation Master Class
                                                                                                            • The Become a Better Investor Community
                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                            • Finance Made Ridiculously Simple
                                                                                                            • FVMR Investing: Quantamental Investing Across the World
                                                                                                            • Become a Great Presenter and Increase Your Influence
                                                                                                            • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                            • Achieve Your Goals
                                                                                                            
                                                                                                            

                                                                                                            Connect with Andrew Stotz:

                                                                                                            • astotz.com
                                                                                                            • LinkedIn
                                                                                                            • Facebook
                                                                                                            • Instagram
                                                                                                            • Twitter
                                                                                                            • YouTube
                                                                                                            • My Worst Investment Ever Podcast
                                                                                                            
                                                                                                            ]]>BIO: Spencer Jakab is the global editor of the Wall Street Journal’s financial and economic analysis column, Heard on the Street. Prior to becoming a financial journalist 20 years ago, he was a top-rated emerging market stock analyst.

                                                                                                            STORY: Spencer took investment advice without doing due diligence and ended up losing his entire investment.

                                                                                                            LEARNING: Don’t take investment tips from people; do your due diligence. Diversify your portfolio. Don’t invest more than you can lose.

                                                                                                             

                                                                                                            “Don’t take investment tips from people because those who tell don’t know, and those who know, don’t tell.”

                                                                                                            Spencer Jakab

                                                                                                             

                                                                                                            Guest profile

                                                                                                            Spencer Jakab is the global editor of the Wall Street Journal’s financial and economic analysis column, Heard on the Street. Prior to becoming a financial journalist 20 years ago, he was a top-rated emerging market stock analyst. He has written two books, the most recent being “The Revolution That Wasn’t,” about novice investors caught up in GameStop mania.

                                                                                                            Worst investment ever

                                                                                                            Spencer moved to Hungary in the early 90s because he was very excited about all the changes due to the fall of the Berlin Wall and the opening up of the Eastern European region. Spencer wanted to make money and also see history being made.

                                                                                                            After writing to many investment banks looking, he got a couple of interviews with local accountants and banks. Spencer accepted a job as a country analyst in Hungary. He had no idea what he was doing.

                                                                                                            The job was to meet fund managers who were wealthy, nicely dressed, and suave, talking about all these things they had done and how much money they’d made from various investments. He thought they were so clever and believed that if he followed their lead, he’d be rich too. At the time, Spencer had saved $5,000. He invested half the money in a Southeast Asia fund and the other half in a US bond fund. The market became bearish, and Spencer lost most of his investment.

                                                                                                            Later, Spencer met a suave, sophisticated fund manager who convinced him to invest in a Canadian company. The company made permanent magnets. The company had a PE ratio of about nine, which is very low. Spencer looked the company up and read the annual report. He still couldn’t figure out what a permanent magnet was, but it sounded impressive and very high-tech. The company also had all these PhDs working for them. So Spencer decided to invest in it. He also told his good friend about it, who also invested.

                                                                                                            Some time went by, and one day as Spencer read the newspaper, he came across a story of how the FBI had raided the offices of the magnet company. The company was run by Russian mobsters and was just a front. Obviously, the stock went to zero after the expose. Spencer and his friend lost all their investment.

                                                                                                            Lessons learned

                                                                                                            • Don’t take investment tips from people; do your due diligence.
                                                                                                            • Do your own research.
                                                                                                            • Diversify your portfolio.
                                                                                                            • Only invest what you can lose.
                                                                                                            • If you want to be a stock picker, do it with a small amount of your money.
                                                                                                            • Invest in diversified, low-cost funds, hold for the long term, and don’t try to time the market. You’ll do better than 85% of fund managers over any 10-year period.
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s takeaways

                                                                                                            • Only buy a stock recommended by a person after researching it.
                                                                                                            • Focus on taking care of yourself, but be very careful about starting to promote something to other people because it can backfire on you.
                                                                                                            
                                                                                                            

                                                                                                            Actionable advice

                                                                                                            Stop looking for the needle in the haystack; buy the whole haystack. This way, you’ll buy into a big diversified pool of investments and do okay even if there’s inflation.

                                                                                                            Spencer’s recommendations

                                                                                                            Spencer recommends using robo-advisors because it’s a cheap way of monitoring your investment portfolio, especially if you’re starting out.

                                                                                                            No.1 goal for the next 12 months

                                                                                                            Spencer’s number one goal for the next 12 months is to make sense of the current economy, understand what’s going on, be nuanced, and not get caught in a head fake.

                                                                                                            Parting words

                                                                                                             

                                                                                                            “My motto in investing is to be cheap and lazy. That’s the formula for success.”

                                                                                                            Spencer Jakab

                                                                                                             

                                                                                                            [spp-transcript]

                                                                                                             

                                                                                                            Connect with Spencer Jakab

                                                                                                            • LinkedIn
                                                                                                            • Twitter
                                                                                                            • Website
                                                                                                            • Book
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s books

                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                            • My Worst Investment Ever
                                                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s online programs

                                                                                                            • Valuation Master Class
                                                                                                            • The Become a Better Investor Community
                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                            • Finance Made Ridiculously Simple
                                                                                                            • FVMR Investing: Quantamental Investing Across the World
                                                                                                            • Become a Great Presenter and Increase Your Influence
                                                                                                            • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                            • Achieve Your Goals
                                                                                                            
                                                                                                            

                                                                                                            Connect with Andrew Stotz:

                                                                                                            • astotz.com
                                                                                                            • LinkedIn
                                                                                                            • Facebook
                                                                                                            • Instagram
                                                                                                            • Twitter
                                                                                                            • YouTube
                                                                                                            • My Worst Investment Ever Podcast
                                                                                                            
                                                                                                            ]]>c7cf233b-1544-4e6d-a2df-64cbc17ece26Thu, 22 Jun 2023 06:00:00 +070045:59falsefullCharles Rotblut – Realize When You’re Lucky and Walk AwayBIO: Charles Rotblut, CFA, is a vice president and financial analyst at the American Association of Individual Investors (AAII).

                                                                                                            STORY: Charles bought a Dotcom stock in 1998. A week later, the stock had tripled. His dad advised him to take the profits, but he insisted the stock would keep going up. Three days later, the stock lost almost all its value. Charles sold the stock and made very little profit.

                                                                                                            LEARNING: Don’t confuse luck with skill. Utilize a rolling stop loss to manage risk. Always have a diversified portfolio.

                                                                                                             

                                                                                                            “The market has an uncanny ability to make you look silly. It doesn’t matter how smart you are, how skilled you are, the market can and will make you look stupid, and not just on one occasion, but on several occasions.”

                                                                                                            Charles Rotblut

                                                                                                             

                                                                                                            Guest profile

                                                                                                            Charles Rotblut, CFA, is a vice president and financial analyst at the American Association of Individual Investors (AAII). He is the editor of the AAII Journal, created both the PRISM Wealth-Building Process and VMQ Stocks, and authors the weekly AAII Investor Update email. His book, “Better Good than Lucky: How Savvy Investors Create Fortune With the Risk-Reward Ratio,” was published in November 2010. Charles holds the Chartered Financial Analyst (CFA) designation and has analyzed both publicly traded and privately held companies.

                                                                                                            Worst investment ever

                                                                                                            Charles bought a Dotcom stock in 1998, right before Thanksgiving. The stock took off, and he made triple-digit gains. On Thanksgiving day, Charles told his dad about the stock, and he advised him to take the profits. Charles insisted that the stock could run even higher. The following Monday, he got to work, logged into his computer just as the market opened, and saw that the stock had increased. On checking on the stock again a few hours later, it had lost almost all its value. All the profits had pretty much vanished.

                                                                                                            Charles got out of the stock and made just a slight gain, but nothing near what he could have made had he listened to his dad.

                                                                                                            Lessons learned

                                                                                                            • It’s easy to confuse skill with luck, so be conscious of when luck happens.
                                                                                                            • If you don’t want to sell your stock, take some of your profits and hold a little.
                                                                                                            • Put the gains you take in an index fund.
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s takeaways

                                                                                                            • Whenever you get to a point where a stock has gone up or down so much that you’re starting to question your situation, sell 50% of your position.
                                                                                                            • Utilize a rolling stop loss to manage risk.
                                                                                                            • Always have a diversified portfolio.
                                                                                                            
                                                                                                            

                                                                                                            Charles’s recommendations

                                                                                                            Charles recommends using a stock screen to find stocks with all the traits you seek that nobody else is discussing.

                                                                                                            No.1 goal for the next 12 months

                                                                                                            Charles’s number one goal for the next 12 months is to save more than last year. He also wants to get onto the TED Talk stage.

                                                                                                            Parting words

                                                                                                             

                                                                                                            “Just be disciplined. Think about simple strategies. If all you do is write down very simple buy and sell rules and follow those routinely, you’ll have returns that are far in excess of the average investor.”

                                                                                                            Charles Rotblut

                                                                                                             

                                                                                                            [spp-transcript]

                                                                                                             

                                                                                                            Connect with Charles Rotblut

                                                                                                            • LinkedIn
                                                                                                            • Twitter
                                                                                                            • Instagram
                                                                                                            • YouTube
                                                                                                            • Website
                                                                                                            • Book
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s books

                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                            • My Worst Investment Ever
                                                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s online programs

                                                                                                            • Valuation Master Class
                                                                                                            • The Become a Better Investor Community
                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                            • Finance Made Ridiculously Simple
                                                                                                            • FVMR Investing: Quantamental Investing Across the World
                                                                                                            • Become a Great Presenter and Increase Your Influence
                                                                                                            • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                            • Achieve Your Goals
                                                                                                            
                                                                                                            

                                                                                                            Connect with Andrew Stotz:

                                                                                                            • astotz.com
                                                                                                            • LinkedIn
                                                                                                            • Facebook
                                                                                                            • Instagram
                                                                                                            • Twitter
                                                                                                            • YouTube
                                                                                                            • My Worst Investment Ever Podcast
                                                                                                            
                                                                                                            

                                                                                                            Further reading mentioned

                                                                                                            • James O’Shaughnessy, What Works on Wall Street, Fourth Edition: The Classic Guide to the Best-Performing Investment Strategies of All Time
                                                                                                            • John P. Reese and Todd O. Glassman, The Market Gurus: Stock Investing Strategies You Can Use From Wall Street’s Best
                                                                                                            
                                                                                                            ]]>BIO: Charles Rotblut, CFA, is a vice president and financial analyst at the American Association of Individual Investors (AAII).

                                                                                                            STORY: Charles bought a Dotcom stock in 1998. A week later, the stock had tripled. His dad advised him to take the profits, but he insisted the stock would keep going up. Three days later, the stock lost almost all its value. Charles sold the stock and made very little profit.

                                                                                                            LEARNING: Don’t confuse luck with skill. Utilize a rolling stop loss to manage risk. Always have a diversified portfolio.

                                                                                                             

                                                                                                            “The market has an uncanny ability to make you look silly. It doesn’t matter how smart you are, how skilled you are, the market can and will make you look stupid, and not just on one occasion, but on several occasions.”

                                                                                                            Charles Rotblut

                                                                                                             

                                                                                                            Guest profile

                                                                                                            Charles Rotblut, CFA, is a vice president and financial analyst at the American Association of Individual Investors (AAII). He is the editor of the AAII Journal, created both the PRISM Wealth-Building Process and VMQ Stocks, and authors the weekly AAII Investor Update email. His book, “Better Good than Lucky: How Savvy Investors Create Fortune With the Risk-Reward Ratio,” was published in November 2010. Charles holds the Chartered Financial Analyst (CFA) designation and has analyzed both publicly traded and privately held companies.

                                                                                                            Worst investment ever

                                                                                                            Charles bought a Dotcom stock in 1998, right before Thanksgiving. The stock took off, and he made triple-digit gains. On Thanksgiving day, Charles told his dad about the stock, and he advised him to take the profits. Charles insisted that the stock could run even higher. The following Monday, he got to work, logged into his computer just as the market opened, and saw that the stock had increased. On checking on the stock again a few hours later, it had lost almost all its value. All the profits had pretty much vanished.

                                                                                                            Charles got out of the stock and made just a slight gain, but nothing near what he could have made had he listened to his dad.

                                                                                                            Lessons learned

                                                                                                            • It’s easy to confuse skill with luck, so be conscious of when luck happens.
                                                                                                            • If you don’t want to sell your stock, take some of your profits and hold a little.
                                                                                                            • Put the gains you take in an index fund.
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s takeaways

                                                                                                            • Whenever you get to a point where a stock has gone up or down so much that you’re starting to question your situation, sell 50% of your position.
                                                                                                            • Utilize a rolling stop loss to manage risk.
                                                                                                            • Always have a diversified portfolio.
                                                                                                            
                                                                                                            

                                                                                                            Charles’s recommendations

                                                                                                            Charles recommends using a stock screen to find stocks with all the traits you seek that nobody else is discussing.

                                                                                                            No.1 goal for the next 12 months

                                                                                                            Charles’s number one goal for the next 12 months is to save more than last year. He also wants to get onto the TED Talk stage.

                                                                                                            Parting words

                                                                                                             

                                                                                                            “Just be disciplined. Think about simple strategies. If all you do is write down very simple buy and sell rules and follow those routinely, you’ll have returns that are far in excess of the average investor.”

                                                                                                            Charles Rotblut

                                                                                                             

                                                                                                            [spp-transcript]

                                                                                                             

                                                                                                            Connect with Charles Rotblut

                                                                                                            • LinkedIn
                                                                                                            • Twitter
                                                                                                            • Instagram
                                                                                                            • YouTube
                                                                                                            • Website
                                                                                                            • Book
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s books

                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                            • My Worst Investment Ever
                                                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s online programs

                                                                                                            • Valuation Master Class
                                                                                                            • The Become a Better Investor Community
                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                            • Finance Made Ridiculously Simple
                                                                                                            • FVMR Investing: Quantamental Investing Across the World
                                                                                                            • Become a Great Presenter and Increase Your Influence
                                                                                                            • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                            • Achieve Your Goals
                                                                                                            
                                                                                                            

                                                                                                            Connect with Andrew Stotz:

                                                                                                            • astotz.com
                                                                                                            • LinkedIn
                                                                                                            • Facebook
                                                                                                            • Instagram
                                                                                                            • Twitter
                                                                                                            • YouTube
                                                                                                            • My Worst Investment Ever Podcast
                                                                                                            
                                                                                                            

                                                                                                            Further reading mentioned

                                                                                                            • James O’Shaughnessy, What Works on Wall Street, Fourth Edition: The Classic Guide to the Best-Performing Investment Strategies of All Time
                                                                                                            • John P. Reese and Todd O. Glassman, The Market Gurus: Stock Investing Strategies You Can Use From Wall Street’s Best
                                                                                                            
                                                                                                            ]]>4e82bea7-7a8a-47ff-8c63-b6e40515bd0fWed, 21 Jun 2023 06:00:00 +070033:29falsefullArjun Murti – You’ve Got to Get Out of the Battle At Some PointBIO: Arjun Murti has over 30 years of experience as an equity research analyst, senior advisor, and board member, with global expertise covering traditional oil & gas and new energy technologies.

                                                                                                            STORY: Arjun made a call that oil prices would quintuple from $20 a barrel in the 90s to $105 in the 2000s and stay there for at least five years. The price averaged $100 a barrel from 2000 to 2014, entirely consistent with Arjun’s call. However, after the 2008 financial crisis, the return on capital in the energy sector started falling. Arjun made excuses and continued to ride the wave all the way down.

                                                                                                            LEARNING: Let go of your ego and get out of the battle at some point. Frameworks need to grow, evolve and adjust to circumstances. Understand and inculcate reversion to the mean into your thinking.

                                                                                                             

                                                                                                            “At some point, you got to get out of your own ego and get out of the battle.”

                                                                                                            Arjun Murti

                                                                                                             

                                                                                                            Guest profile

                                                                                                            Arjun Murti has over 30 years of experience as an equity research analyst, senior advisor, and board member, with global experience covering traditional oil & gas and new energy technologies.

                                                                                                            The bulk of his Wall Street career was at Goldman Sachs, where he retired as a partner in 2014. He recently “un-retired” to join Veriten, an energy research, strategy, and investing firm. Arjun publishes Super-Spiked, a Substack blog focused on the messy energy transition era.

                                                                                                            He is on the board of ConocoPhillips, a senior advisor at Warburg Pincus, and on the advisory boards for ClearPath and the Center on Global Energy Policy.

                                                                                                            Worst investment ever

                                                                                                            At the height of his career, Arjun made a call that oil was going to go from the $15 to $20 a barrel range it had been in from the mid-80s. He said the price would rise to between $50 to $105 in the 2000s and stay there for at least five years. And with that, the returns on capital and profitability in energy as a sector would do very well. Arjun called this the super spike.

                                                                                                            In 2002, the market started becoming bullish, and oil went from the 20-dollar range everyone thought the sector would be at forever to ultimately as high as $147 in 2008. The price averaged $100 a barrel from 2000 to 2014, entirely consistent with the high end of the range of Arjun’s original call. He was pretty excited about the sector’s profitability and experienced an ego boost after being proven right for five years.

                                                                                                            However, the returns on capital started rolling over, and Arjun made excuses for it. From 2006 to 2008, oil went from $65 to $100 a barrel, but returns on capital for the sector fell from 22% to 19%. 19% is still an excellent number, and that’s the excuse Arjun used to continue riding the call. The sector then got interrupted by the great financial crisis of 2008, which Arjun never viewed as an energy event. The industry rebounded dramatically off those 2008 and 2009 lows, but the returns on capital had now fallen to 16%. Arjun kept making excuses as the returns continued to fall and never got off. Making excuses for his framework the entire way down became his worst investment mistake ever.

                                                                                                            Lessons learned

                                                                                                            • At some point, you’ve to get let go of your ego and get out of the battle.
                                                                                                            • Frameworks need to grow, evolve and adjust to circumstances.
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s takeaways

                                                                                                            • Understand and inculcate reversion to the mean into your thinking.
                                                                                                            • Understand what the average is. Ride the wave but remember the numbers will go down to the average and, in some cases, below.
                                                                                                            • Research shows that high returns on invested capital tend to revert toward the mean. However, that’s not the case with cyclical industries like oil.
                                                                                                            
                                                                                                            

                                                                                                            Actionable advice

                                                                                                            You can do all the data analysis in the world and project the future, but what’s probably most important is understanding the emotion and psychology of investing.

                                                                                                            Arjun’s recommendations

                                                                                                            Arjun strongly advocates energy literacy and therefore recommends subscribing to his substack Super-Spiked, which is free. He also recommends reading The Prize: The Epic Quest for Oil, Money & Power to understand the history of oil, why we use it, and its critical importance. You can also check out books by Vaclav Smil, an actual scientist who provides authentic fundamental understandings of energy.

                                                                                                            No.1 goal for the next 12 months

                                                                                                            Arjun’s number one goal for the next 12 months is to speak up and engage more in pragmatic energy discussions.

                                                                                                            Parting words

                                                                                                             

                                                                                                            “I’m very excited to be alumni of your academy. Thank you so much.”

                                                                                                            Arjun Murti

                                                                                                             

                                                                                                            [spp-transcript]

                                                                                                             

                                                                                                            Connect with Arjun Murti

                                                                                                            • LinkedIn
                                                                                                            • Twitter
                                                                                                            • YouTube
                                                                                                            • Website
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s books

                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                            • My Worst Investment Ever
                                                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s online programs

                                                                                                            • Valuation Master Class
                                                                                                            • The Become a Better Investor Community
                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                            • Finance Made Ridiculously Simple
                                                                                                            • FVMR Investing: Quantamental Investing Across the World
                                                                                                            • Become a Great Presenter and Increase Your Influence
                                                                                                            • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                            • Achieve Your Goals
                                                                                                            
                                                                                                            

                                                                                                            Connect with Andrew Stotz:

                                                                                                            • astotz.com
                                                                                                            • LinkedIn
                                                                                                            • Facebook
                                                                                                            • Instagram
                                                                                                            • Twitter
                                                                                                            • YouTube
                                                                                                            • My Worst Investment Ever Podcast
                                                                                                            
                                                                                                            

                                                                                                            Further reading mentioned

                                                                                                            • Jack Weatherford, Genghis Khan and the Making of the Modern World
                                                                                                            
                                                                                                            ]]>BIO: Arjun Murti has over 30 years of experience as an equity research analyst, senior advisor, and board member, with global expertise covering traditional oil & gas and new energy technologies.

                                                                                                            STORY: Arjun made a call that oil prices would quintuple from $20 a barrel in the 90s to $105 in the 2000s and stay there for at least five years. The price averaged $100 a barrel from 2000 to 2014, entirely consistent with Arjun’s call. However, after the 2008 financial crisis, the return on capital in the energy sector started falling. Arjun made excuses and continued to ride the wave all the way down.

                                                                                                            LEARNING: Let go of your ego and get out of the battle at some point. Frameworks need to grow, evolve and adjust to circumstances. Understand and inculcate reversion to the mean into your thinking.

                                                                                                             

                                                                                                            “At some point, you got to get out of your own ego and get out of the battle.”

                                                                                                            Arjun Murti

                                                                                                             

                                                                                                            Guest profile

                                                                                                            Arjun Murti has over 30 years of experience as an equity research analyst, senior advisor, and board member, with global experience covering traditional oil & gas and new energy technologies.

                                                                                                            The bulk of his Wall Street career was at Goldman Sachs, where he retired as a partner in 2014. He recently “un-retired” to join Veriten, an energy research, strategy, and investing firm. Arjun publishes Super-Spiked, a Substack blog focused on the messy energy transition era.

                                                                                                            He is on the board of ConocoPhillips, a senior advisor at Warburg Pincus, and on the advisory boards for ClearPath and the Center on Global Energy Policy.

                                                                                                            Worst investment ever

                                                                                                            At the height of his career, Arjun made a call that oil was going to go from the $15 to $20 a barrel range it had been in from the mid-80s. He said the price would rise to between $50 to $105 in the 2000s and stay there for at least five years. And with that, the returns on capital and profitability in energy as a sector would do very well. Arjun called this the super spike.

                                                                                                            In 2002, the market started becoming bullish, and oil went from the 20-dollar range everyone thought the sector would be at forever to ultimately as high as $147 in 2008. The price averaged $100 a barrel from 2000 to 2014, entirely consistent with the high end of the range of Arjun’s original call. He was pretty excited about the sector’s profitability and experienced an ego boost after being proven right for five years.

                                                                                                            However, the returns on capital started rolling over, and Arjun made excuses for it. From 2006 to 2008, oil went from $65 to $100 a barrel, but returns on capital for the sector fell from 22% to 19%. 19% is still an excellent number, and that’s the excuse Arjun used to continue riding the call. The sector then got interrupted by the great financial crisis of 2008, which Arjun never viewed as an energy event. The industry rebounded dramatically off those 2008 and 2009 lows, but the returns on capital had now fallen to 16%. Arjun kept making excuses as the returns continued to fall and never got off. Making excuses for his framework the entire way down became his worst investment mistake ever.

                                                                                                            Lessons learned

                                                                                                            • At some point, you’ve to get let go of your ego and get out of the battle.
                                                                                                            • Frameworks need to grow, evolve and adjust to circumstances.
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s takeaways

                                                                                                            • Understand and inculcate reversion to the mean into your thinking.
                                                                                                            • Understand what the average is. Ride the wave but remember the numbers will go down to the average and, in some cases, below.
                                                                                                            • Research shows that high returns on invested capital tend to revert toward the mean. However, that’s not the case with cyclical industries like oil.
                                                                                                            
                                                                                                            

                                                                                                            Actionable advice

                                                                                                            You can do all the data analysis in the world and project the future, but what’s probably most important is understanding the emotion and psychology of investing.

                                                                                                            Arjun’s recommendations

                                                                                                            Arjun strongly advocates energy literacy and therefore recommends subscribing to his substack Super-Spiked, which is free. He also recommends reading The Prize: The Epic Quest for Oil, Money & Power to understand the history of oil, why we use it, and its critical importance. You can also check out books by Vaclav Smil, an actual scientist who provides authentic fundamental understandings of energy.

                                                                                                            No.1 goal for the next 12 months

                                                                                                            Arjun’s number one goal for the next 12 months is to speak up and engage more in pragmatic energy discussions.

                                                                                                            Parting words

                                                                                                             

                                                                                                            “I’m very excited to be alumni of your academy. Thank you so much.”

                                                                                                            Arjun Murti

                                                                                                             

                                                                                                            [spp-transcript]

                                                                                                             

                                                                                                            Connect with Arjun Murti

                                                                                                            • LinkedIn
                                                                                                            • Twitter
                                                                                                            • YouTube
                                                                                                            • Website
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s books

                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                            • My Worst Investment Ever
                                                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s online programs

                                                                                                            • Valuation Master Class
                                                                                                            • The Become a Better Investor Community
                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                            • Finance Made Ridiculously Simple
                                                                                                            • FVMR Investing: Quantamental Investing Across the World
                                                                                                            • Become a Great Presenter and Increase Your Influence
                                                                                                            • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                            • Achieve Your Goals
                                                                                                            
                                                                                                            

                                                                                                            Connect with Andrew Stotz:

                                                                                                            • astotz.com
                                                                                                            • LinkedIn
                                                                                                            • Facebook
                                                                                                            • Instagram
                                                                                                            • Twitter
                                                                                                            • YouTube
                                                                                                            • My Worst Investment Ever Podcast
                                                                                                            
                                                                                                            

                                                                                                            Further reading mentioned

                                                                                                            • Jack Weatherford, Genghis Khan and the Making of the Modern World
                                                                                                            
                                                                                                            ]]>6a59cff7-20ac-4cbc-9500-803ddf52067dMon, 19 Jun 2023 06:00:00 +070040:25falsefullISMS 25: Larry Swedroe – Admit Your Mistakes and Don’t Listen to Fake ExpertsIn this episode of Investment Strategy Made Simple (ISMS), Andrew and Larry discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this sixth episode, they talk about mistake number 9: Do you avoid admitting your investment mistakes? And mistake number 10: Do you pay attention to the experts?

                                                                                                            LEARNING: You’ll only learn from mistakes if you admit that you made them. Just because someone is famous and confident in what they’re saying doesn’t mean they’re experts who know what they’re saying.

                                                                                                             

                                                                                                            “If you could admit a mistake when it’s the size of an acorn, it’s easier to repair than when it’s the size of a tree with deep, wide-ranging roots.”

                                                                                                            Larry Swedroe

                                                                                                             

                                                                                                            In today’s episode, Andrew continues his discussion with Larry Swedroe, head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                                                            Larry deeply understands the world of academic research and investing, especially risk. Today Andrew and Larry discuss a chapter of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this sixth episode, they talk about mistake number 9: Do you avoid admitting your investment mistakes? And mistake number 10: Do you pay attention to the experts?

                                                                                                            Missed out on previous mistakes? Check them out:

                                                                                                            • ISMS 8: Larry Swedroe – Are You Overconfident in Your Skills?
                                                                                                            • ISMS 17: Larry Swedroe – Do You Project Recent Trends Indefinitely Into the Future?
                                                                                                            • ISMS 20: Larry Swedroe – Do You Extrapolate From Small Samples and Trust Your Intuition?
                                                                                                            • ISMS 23: Larry Swedroe – Do You Allow Yourself to Be Influenced by Your Ego and Herd Mentality?
                                                                                                            • ISMS 24: Larry Swedroe – Confusing Skill and Luck Can Stop You From Investing Wisely
                                                                                                            
                                                                                                            

                                                                                                            Mistake number 9: Do you avoid admitting your investment mistakes?

                                                                                                            As human beings, we’re hardwired to avoid admitting mistakes. And, of course, you can’t correct a mistake unless you acknowledge that your behavior was a mistake in the first place. A typical investment mistake most people make is engaging in actively managed funds and stock picking, even though there’s hard evidence that a vast majority of active managers fail persistently to outperform over the long term.

                                                                                                            According to Larry, when you’ve made an investment mistake and have a poorly performing asset, the right thing to do is count your losses and substitute the asset with a superior choice. However, many people don’t want to sell because they’ll hurt their ego. Selling means they have to admit that they were wrong in the first place in making that investment.

                                                                                                            So for most people, ego and their inability to acknowledge that they’re wrong are the number one reason they’re stuck in bad investments. Most people, when directly confronted, even with proof that they’re wrong, don’t change their point of view. In fact, they tend to defend it more aggressively. They’ll selectively gather evidence or recall information and interpret it biasedly to reinforce their established beliefs.

                                                                                                            Mistake number 10: Do you pay attention to the experts?

                                                                                                            According to Larry, you shouldn’t listen to experts. But here, he means experts forecasting what the stock market and the economy will do. You should instead listen to experts quoting scientific or empirical evidence in peer-reviewed journals.

                                                                                                            When someone’s telling you exactly what’s going to happen, they’re doing it because they’re overconfident. There’s a good chance they don’t know what they’re saying. In Larry’s opinion, only one thing correlates with the ability to make forecasts; fame. The more famous someone is, the worse their predictions are, probably because they’re just overconfident in their skill sets. People fall for such ‘experts’ thinking they know what they’re talking about because they say things with confidence. Larry insists on ignoring such experts. To drive the point home, Larry quotes the authors of Mistakes Were Made (but Not By Me):

                                                                                                            “When experts are wrong, the centerpiece of their professional identity is threatened. Therefore, the more self-confident and famous they are, the less likely they’ll admit mistakes. They Just come up with statements to justify the forecast and explain if only this has happened. If only the timing was different, I would have been right. It was some unfortunate event that occurred that wasn’t forecast. So, of course, that’s why you can’t make forecasts. We can’t predict the future with any persistence better than the market does.”

                                                                                                            About Larry Swedroe

                                                                                                            Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                                                            Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                                                            Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                                                            Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                                                             

                                                                                                            [spp-transcript]

                                                                                                             

                                                                                                            Connect with Larry Swedroe

                                                                                                            • LinkedIn
                                                                                                            • Twitter
                                                                                                            • Website
                                                                                                            • Books
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s books

                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                            • My Worst Investment Ever
                                                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                            
                                                                                                            

                                                                                                            Andrew’s online programs

                                                                                                            • Valuation Master Class
                                                                                                            • The Become a Better Investor Community
                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                            • Finance Made Ridiculously Simple
                                                                                                            • FVMR Investing: Quantamental Investing Across the World
                                                                                                            • Become a Great Presenter and Increase Your Influence
                                                                                                            • In this episode of Investment Strategy Made Simple (ISMS), Andrew and Larry discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this sixth episode, they talk about mistake number 9: Do you avoid admitting your investment mistakes? And mistake number 10: Do you pay attention to the experts?

                                                                                                              LEARNING: You’ll only learn from mistakes if you admit that you made them. Just because someone is famous and confident in what they’re saying doesn’t mean they’re experts who know what they’re saying.

                                                                                                               

                                                                                                              “If you could admit a mistake when it’s the size of an acorn, it’s easier to repair than when it’s the size of a tree with deep, wide-ranging roots.”

                                                                                                              Larry Swedroe

                                                                                                               

                                                                                                              In today’s episode, Andrew continues his discussion with Larry Swedroe, head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                                                              Larry deeply understands the world of academic research and investing, especially risk. Today Andrew and Larry discuss a chapter of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this sixth episode, they talk about mistake number 9: Do you avoid admitting your investment mistakes? And mistake number 10: Do you pay attention to the experts?

                                                                                                              Missed out on previous mistakes? Check them out:

                                                                                                              • ISMS 8: Larry Swedroe – Are You Overconfident in Your Skills?
                                                                                                              • ISMS 17: Larry Swedroe – Do You Project Recent Trends Indefinitely Into the Future?
                                                                                                              • ISMS 20: Larry Swedroe – Do You Extrapolate From Small Samples and Trust Your Intuition?
                                                                                                              • ISMS 23: Larry Swedroe – Do You Allow Yourself to Be Influenced by Your Ego and Herd Mentality?
                                                                                                              • ISMS 24: Larry Swedroe – Confusing Skill and Luck Can Stop You From Investing Wisely
                                                                                                              
                                                                                                              

                                                                                                              Mistake number 9: Do you avoid admitting your investment mistakes?

                                                                                                              As human beings, we’re hardwired to avoid admitting mistakes. And, of course, you can’t correct a mistake unless you acknowledge that your behavior was a mistake in the first place. A typical investment mistake most people make is engaging in actively managed funds and stock picking, even though there’s hard evidence that a vast majority of active managers fail persistently to outperform over the long term.

                                                                                                              According to Larry, when you’ve made an investment mistake and have a poorly performing asset, the right thing to do is count your losses and substitute the asset with a superior choice. However, many people don’t want to sell because they’ll hurt their ego. Selling means they have to admit that they were wrong in the first place in making that investment.

                                                                                                              So for most people, ego and their inability to acknowledge that they’re wrong are the number one reason they’re stuck in bad investments. Most people, when directly confronted, even with proof that they’re wrong, don’t change their point of view. In fact, they tend to defend it more aggressively. They’ll selectively gather evidence or recall information and interpret it biasedly to reinforce their established beliefs.

                                                                                                              Mistake number 10: Do you pay attention to the experts?

                                                                                                              According to Larry, you shouldn’t listen to experts. But here, he means experts forecasting what the stock market and the economy will do. You should instead listen to experts quoting scientific or empirical evidence in peer-reviewed journals.

                                                                                                              When someone’s telling you exactly what’s going to happen, they’re doing it because they’re overconfident. There’s a good chance they don’t know what they’re saying. In Larry’s opinion, only one thing correlates with the ability to make forecasts; fame. The more famous someone is, the worse their predictions are, probably because they’re just overconfident in their skill sets. People fall for such ‘experts’ thinking they know what they’re talking about because they say things with confidence. Larry insists on ignoring such experts. To drive the point home, Larry quotes the authors of Mistakes Were Made (but Not By Me):

                                                                                                              “When experts are wrong, the centerpiece of their professional identity is threatened. Therefore, the more self-confident and famous they are, the less likely they’ll admit mistakes. They Just come up with statements to justify the forecast and explain if only this has happened. If only the timing was different, I would have been right. It was some unfortunate event that occurred that wasn’t forecast. So, of course, that’s why you can’t make forecasts. We can’t predict the future with any persistence better than the market does.”

                                                                                                              About Larry Swedroe

                                                                                                              Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                                                              Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                                                              Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                                                              Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                                                               

                                                                                                              [spp-transcript]

                                                                                                               

                                                                                                              Connect with Larry Swedroe

                                                                                                              • LinkedIn
                                                                                                              • Twitter
                                                                                                              • Website
                                                                                                              • Books
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s books

                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                              • My Worst Investment Ever
                                                                                                              • 9 Valuation Mistakes and How to Avoid Them
                                                                                                              • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s online programs

                                                                                                              • Valuation Master Class
                                                                                                              • The Become a Better Investor Community
                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                              • Finance Made Ridiculously Simple
                                                                                                              • FVMR Investing: Quantamental Investing Across the World
                                                                                                              • Become a Great Presenter and Increase Your Influence
                                                                                                              • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                              • Achieve Your Goals
                                                                                                              
                                                                                                              

                                                                                                              Connect with Andrew Stotz:

                                                                                                              • astotz.com
                                                                                                              • LinkedIn
                                                                                                              • Facebook
                                                                                                              • Instagram
                                                                                                              • Twitter
                                                                                                              • YouTube
                                                                                                              • My Worst Investment Ever Podcast
                                                                                                              
                                                                                                              

                                                                                                              Further reading mentioned

                                                                                                              • Larry Swedroe and RC Balaban, Investment Mistakes Even Smart Investors Make and How to Avoid Them
                                                                                                              • Philip E. Tetlock, Expert Political Judgment: How Good Is It? How Can We Know?
                                                                                                              • Carol Tavris and Elliot Aronson, Mistakes Were Made (But Not by Me): Third Edition: Why We Justify Foolish Beliefs, Bad Decisions, and Hurtful Acts
                                                                                                              • Kathryn Schulz, Being Wrong: Adventures in the Margin of Error
                                                                                                              
                                                                                                              ]]>3c7d9e18-68ea-4407-a806-36ccbaf2f3f4Fri, 16 Jun 2023 06:00:00 +070026:04falsefullSteven Wilkinson – Your Success Is 100% Dependent on YouBIO: Sir Steven Wilkinson is the founder and CEO of Good & Prosper and has been involved in business finance and investment for the best part of 30 years, having started working for Merrill Lynch Investment Bank in Munich, Germany, in 1987 at the age of 24.

                                                                                                              STORY: Steven entered a successful partnership that saw them take a stock from 50 cents to 400 euros. They made so much money from their business, but the problem was Steve wasn’t ready for that kind of success. He had no system for dealing with the wealth he created and eventually lost all his money.

                                                                                                              LEARNING: Being successful is 100% dependent on you. Working on yourself is the key to having whatever it is that you want to have.

                                                                                                               

                                                                                                              “You’ve got to be the owner in order to do the things that owners do and thereby to have the things that owners have.”

                                                                                                              Steven Wilkinson

                                                                                                               

                                                                                                              Guest profile

                                                                                                              Sir Steven Wilkinson is the founder and CEO of Good & Prosper and has been involved in business finance and investment for the best part of 30 years, having started working for Merrill Lynch Investment Bank in Munich, Germany, in 1987 at the tender age of 24.

                                                                                                              Good & Prosper is an advisory and investment company through which Steven acts as a thinking partner for business leaders and owners, supporting them as a generalist business expert across the fields of finance, leadership, and culture.

                                                                                                              Good & Prosper is also a knowledge platform teaching finance to entrepreneurs with a focus on Small & Medium sized businesses, primarily in the English-speaking world.

                                                                                                              Steven founded the publishing business Pitchfork Press and publishes a weekly essay, “Pitchfork Papers,” via Substack to a rapidly growing and diverse international audience.

                                                                                                              Worst investment ever

                                                                                                              Steven started his investment business in 1998 and had an excellent first couple of years. This was because, as a value investor, he had no interest in any of the new economy stocks. Steven stuck with stocks in the public markets, mainly because that’s all he could afford. Steven had a couple of stocks that were mind-bogglingly great investments. And so his business did quite well, and capital increased substantially over the following years.

                                                                                                              Steven met an American gentleman who invited him to be on the board of a company he was considering setting up. The gentleman was working for one of the more famous German companies. This publishing company profited enormously from the new economy boom. He’d been in charge of managing what was a promiscuously bought portfolio of new economy businesses.

                                                                                                              The gentleman invited a senior law firm partner and a guy with deep restructuring experience to join his board. The gentleman set up the initial board meeting to get to know each other. The meeting was at the lawyer’s office. The gentleman never showed up, and the lawyer had to return to work. So Steven and the restructuring guy chatted and were fascinated by each other’s stories. They decided to stay in touch.

                                                                                                              The restructuring guy had made much money with his previous partnership and wanted to see what he could do on a bigger stage. That’s how Steven got into a partnership with him. The guy was impressed by Steven’s capital markets intelligence and excellent networks. And Steve saw the guy as an absolutely focused money maker and restructuring genius, which he undoubtedly was.

                                                                                                              The two new partners came up with the idea of buying a shell company, an empty stock-exchange-listed company. The thinking behind this idea was that they were coming into a time when they could buy assets cheaply. And if they could generate the sort of returns they thought they could return, the share price would reflect that reasonably quickly. Then they could determine through rights issues or shares issues how much money to take in and how much control to give up.

                                                                                                              So they found a shell company that had been formed for a spa in a little village and bought 90% of it. The deal was that Steve would take 40% of the shares, be the chairman and help with strategy, investors, and networks. His partner would take 60% and do all the work. The company was phenomenally successful. They took the share price from 50 cents to 400 euros.

                                                                                                              While this should have been Steve’s most successful investment, it turned out to be his worst because he was not ready for that kind of success and had no system for dealing with the wealth he had created. In 2007 everything blew up. Steve lost all his partnership and his money. He was also left with a wealth-destroying amount of debt.

                                                                                                              Lessons learned

                                                                                                              • Being successful in business, being good at investing, and being a good owner is 100% dependent on you.
                                                                                                              • You have to be ready, deserving of wealth, and be in a position of giving to receive.
                                                                                                              • Working on yourself is the key to having whatever it is that you want to have.
                                                                                                              • Whatever you experience results from your own self-reflection, self-development, and maturity.
                                                                                                              
                                                                                                              

                                                                                                               

                                                                                                              [spp-transcript]

                                                                                                               

                                                                                                              Connect with Steven Wilkinson

                                                                                                              • LinkedIn
                                                                                                              • Twitter
                                                                                                              • Website
                                                                                                              • Substack
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s books

                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                              • My Worst Investment Ever
                                                                                                              • 9 Valuation Mistakes and How to Avoid Them
                                                                                                              • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s online programs

                                                                                                              • Valuation Master Class
                                                                                                              • The Become a Better Investor Community
                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                              • Finance Made Ridiculously Simple
                                                                                                              • FVMR Investing: Quantamental Investing Across the World
                                                                                                              • Become a Great Presenter and Increase Your Influence
                                                                                                              • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                              • Achieve Your Goals
                                                                                                              
                                                                                                              

                                                                                                              Connect with Andrew Stotz:

                                                                                                              • astotz.com
                                                                                                              • LinkedIn
                                                                                                              • Facebook
                                                                                                              • Instagram
                                                                                                              • Twitter
                                                                                                              • YouTube
                                                                                                              • My Worst Investment Ever Podcast
                                                                                                              
                                                                                                              ]]>BIO: Sir Steven Wilkinson is the founder and CEO of Good & Prosper and has been involved in business finance and investment for the best part of 30 years, having started working for Merrill Lynch Investment Bank in Munich, Germany, in 1987 at the age of 24.

                                                                                                              STORY: Steven entered a successful partnership that saw them take a stock from 50 cents to 400 euros. They made so much money from their business, but the problem was Steve wasn’t ready for that kind of success. He had no system for dealing with the wealth he created and eventually lost all his money.

                                                                                                              LEARNING: Being successful is 100% dependent on you. Working on yourself is the key to having whatever it is that you want to have.

                                                                                                               

                                                                                                              “You’ve got to be the owner in order to do the things that owners do and thereby to have the things that owners have.”

                                                                                                              Steven Wilkinson

                                                                                                               

                                                                                                              Guest profile

                                                                                                              Sir Steven Wilkinson is the founder and CEO of Good & Prosper and has been involved in business finance and investment for the best part of 30 years, having started working for Merrill Lynch Investment Bank in Munich, Germany, in 1987 at the tender age of 24.

                                                                                                              Good & Prosper is an advisory and investment company through which Steven acts as a thinking partner for business leaders and owners, supporting them as a generalist business expert across the fields of finance, leadership, and culture.

                                                                                                              Good & Prosper is also a knowledge platform teaching finance to entrepreneurs with a focus on Small & Medium sized businesses, primarily in the English-speaking world.

                                                                                                              Steven founded the publishing business Pitchfork Press and publishes a weekly essay, “Pitchfork Papers,” via Substack to a rapidly growing and diverse international audience.

                                                                                                              Worst investment ever

                                                                                                              Steven started his investment business in 1998 and had an excellent first couple of years. This was because, as a value investor, he had no interest in any of the new economy stocks. Steven stuck with stocks in the public markets, mainly because that’s all he could afford. Steven had a couple of stocks that were mind-bogglingly great investments. And so his business did quite well, and capital increased substantially over the following years.

                                                                                                              Steven met an American gentleman who invited him to be on the board of a company he was considering setting up. The gentleman was working for one of the more famous German companies. This publishing company profited enormously from the new economy boom. He’d been in charge of managing what was a promiscuously bought portfolio of new economy businesses.

                                                                                                              The gentleman invited a senior law firm partner and a guy with deep restructuring experience to join his board. The gentleman set up the initial board meeting to get to know each other. The meeting was at the lawyer’s office. The gentleman never showed up, and the lawyer had to return to work. So Steven and the restructuring guy chatted and were fascinated by each other’s stories. They decided to stay in touch.

                                                                                                              The restructuring guy had made much money with his previous partnership and wanted to see what he could do on a bigger stage. That’s how Steven got into a partnership with him. The guy was impressed by Steven’s capital markets intelligence and excellent networks. And Steve saw the guy as an absolutely focused money maker and restructuring genius, which he undoubtedly was.

                                                                                                              The two new partners came up with the idea of buying a shell company, an empty stock-exchange-listed company. The thinking behind this idea was that they were coming into a time when they could buy assets cheaply. And if they could generate the sort of returns they thought they could return, the share price would reflect that reasonably quickly. Then they could determine through rights issues or shares issues how much money to take in and how much control to give up.

                                                                                                              So they found a shell company that had been formed for a spa in a little village and bought 90% of it. The deal was that Steve would take 40% of the shares, be the chairman and help with strategy, investors, and networks. His partner would take 60% and do all the work. The company was phenomenally successful. They took the share price from 50 cents to 400 euros.

                                                                                                              While this should have been Steve’s most successful investment, it turned out to be his worst because he was not ready for that kind of success and had no system for dealing with the wealth he had created. In 2007 everything blew up. Steve lost all his partnership and his money. He was also left with a wealth-destroying amount of debt.

                                                                                                              Lessons learned

                                                                                                              • Being successful in business, being good at investing, and being a good owner is 100% dependent on you.
                                                                                                              • You have to be ready, deserving of wealth, and be in a position of giving to receive.
                                                                                                              • Working on yourself is the key to having whatever it is that you want to have.
                                                                                                              • Whatever you experience results from your own self-reflection, self-development, and maturity.
                                                                                                              
                                                                                                              

                                                                                                               

                                                                                                              [spp-transcript]

                                                                                                               

                                                                                                              Connect with Steven Wilkinson

                                                                                                              • LinkedIn
                                                                                                              • Twitter
                                                                                                              • Website
                                                                                                              • Substack
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s books

                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                              • My Worst Investment Ever
                                                                                                              • 9 Valuation Mistakes and How to Avoid Them
                                                                                                              • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s online programs

                                                                                                              • Valuation Master Class
                                                                                                              • The Become a Better Investor Community
                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                              • Finance Made Ridiculously Simple
                                                                                                              • FVMR Investing: Quantamental Investing Across the World
                                                                                                              • Become a Great Presenter and Increase Your Influence
                                                                                                              • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                              • Achieve Your Goals
                                                                                                              
                                                                                                              

                                                                                                              Connect with Andrew Stotz:

                                                                                                              • astotz.com
                                                                                                              • LinkedIn
                                                                                                              • Facebook
                                                                                                              • Instagram
                                                                                                              • Twitter
                                                                                                              • YouTube
                                                                                                              • My Worst Investment Ever Podcast
                                                                                                              
                                                                                                              ]]>87b0b300-89f2-41b8-b442-bfdfb35c365bThu, 15 Jun 2023 06:00:00 +070001:08:03falsefullShawn O'Malley – Geopolitics Can Take Your Investment to ZeroBIO: Shawn O’Malley is the chief editor and writer of the We Study Markets newsletter from The Investor’s Podcast Network, the world’s largest stock-investing podcast with over 110 million downloads.

                                                                                                              STORY: Shawn wanted to hedge inflation during the COVID pandemic, so he invested in the Russian ETF at the end of 2021. The ETF performed well, and Shawn was happy. Then rumors of Russia invading Ukraine started. The invasion happened in February, and the Russian ETF stopped trading, taking Shawn’s investment to zero.

                                                                                                              LEARNING: Understand how geopolitical events and domestic politics affect investments. You won’t be compensated for lack of knowledge.

                                                                                                               

                                                                                                              “Investing is all about continuous learning and getting comfortable with the risks that we take.”

                                                                                                              Shawn O’Malley

                                                                                                               

                                                                                                              Guest profile

                                                                                                              Shawn O’Malley is the chief editor and writer of the We Study Markets newsletter from The Investor’s Podcast Network, which is the world’s largest stock-investing podcast with over 110 million downloads.

                                                                                                              He writes for an audience of over 30,000 readers daily, breaking down the most important stories in financial markets with longer write-ups exploring financial history, the economics behind everyday life, and insights from legendary investors.

                                                                                                              Shawn hopes to help keep people informed about current news while adding the perspective of a long-term investor.

                                                                                                              Worst investment ever

                                                                                                              In April 2020, Shawn was sent home from school because of the COVID lockdowns. He was a junior in college at the time. He spent a few weeks doing nothing productive but soon realized this would be an extended lockdown. Shawn decided to find valuable ways to manage his time. He started taking long walks while listening to the We Study Billionaires podcast, which interested him in value investing.

                                                                                                              At the time, oil prices were negative. Shawn didn’t understand the futures market or know anything about oil. Still, it felt like an opportunity since he believed oil prices wouldn’t stay negative forever. Shawn bought into some oil and gas stocks and held them.

                                                                                                              Over the next year or so, Shawn developed this sort of outlook that some of the inflationary pressures of the lockdown would eventually manifest. So he started thinking more about how to hedge inflation to have exposure to energy prices. Shawn naively started looking for the most undervalued energy stocks in Russia. At the end of 2021, he bought into the Russia ETF as a creative and cheap way to play this inflation and energy price spike he was trying to foresee.

                                                                                                              Shawn held that investment for a year, and things were looking good. The inflation manifested, and the energy stocks started to rally. At this point, Shawn thought he was pretty clever. In January 2022, all these rumors about Russian troops gathering around Ukraine for an invasion started. Shawn believed it was just a conspiracy theory. He played down the risk and held down his investment. The attack happened in February, and the Russian ETF stopped trading, taking Shawn’s investment to zero.

                                                                                                              Lessons learned

                                                                                                              • Understand how geopolitical events and domestic politics affect investments.
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s takeaways

                                                                                                              • It takes time to become aware that risks are everywhere, and your first job is to understand them.
                                                                                                              • You won’t be compensated for lack of knowledge.
                                                                                                              • When you build a portfolio of international stocks, you’re not investing in global stocks but in a currency. So you have to at least understand the currency impact.
                                                                                                              
                                                                                                              

                                                                                                              Actionable advice

                                                                                                              You have to learn investment lessons for yourself. But, there are a lot of investment mistake stories from investing legends such as Warren Buffett. Read those archives, and you’ll learn a lot about investing mistakes, how to run or find great businesses, excellent management, compounding goodwill, and treating people well.

                                                                                                              No.1 goal for the next 12 months

                                                                                                              Shawn’s goal for the next 12 months is to hit 100,000 subscribers for the We Study Markets newsletter and make financial markets understandable to as many people as possible.

                                                                                                              Parting words

                                                                                                               

                                                                                                              “Thank you for having me on the show. I hope I can count on your listeners as readers of my newsletter one day.”

                                                                                                              Shawn O’Malley

                                                                                                               

                                                                                                              [spp-transcript]

                                                                                                               

                                                                                                              Connect with Shawn O'Malley

                                                                                                              • LinkedIn
                                                                                                              • Twitter
                                                                                                              • YouTube
                                                                                                              • Podcast
                                                                                                              • Website
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s books

                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                              • My Worst Investment Ever
                                                                                                              • 9 Valuation Mistakes and How to Avoid Them
                                                                                                              • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s online programs

                                                                                                              • Valuation Master Class
                                                                                                              • The Become a Better Investor Community
                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                              • Finance Made Ridiculously Simple
                                                                                                              • FVMR Investing: Quantamental Investing Across the World
                                                                                                              • Become a Great Presenter and Increase Your Influence
                                                                                                              • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                              • Achieve Your Goals
                                                                                                              
                                                                                                              

                                                                                                              Connect with Andrew Stotz:

                                                                                                              • astotz.com
                                                                                                              • LinkedIn
                                                                                                              • Facebook
                                                                                                              • Instagram
                                                                                                              • Twitter
                                                                                                              • YouTube
                                                                                                              • My Worst Investment Ever Podcast
                                                                                                              
                                                                                                              

                                                                                                              Further reading mentioned

                                                                                                              • Jeremy J. Siegel (September 2022), Stocks for the Long Run: The Definitive Guide to Financial Market Returns & Long-Term Investment Strategies
                                                                                                              
                                                                                                              ]]>BIO: Shawn O’Malley is the chief editor and writer of the We Study Markets newsletter from The Investor’s Podcast Network, the world’s largest stock-investing podcast with over 110 million downloads.

                                                                                                              STORY: Shawn wanted to hedge inflation during the COVID pandemic, so he invested in the Russian ETF at the end of 2021. The ETF performed well, and Shawn was happy. Then rumors of Russia invading Ukraine started. The invasion happened in February, and the Russian ETF stopped trading, taking Shawn’s investment to zero.

                                                                                                              LEARNING: Understand how geopolitical events and domestic politics affect investments. You won’t be compensated for lack of knowledge.

                                                                                                               

                                                                                                              “Investing is all about continuous learning and getting comfortable with the risks that we take.”

                                                                                                              Shawn O’Malley

                                                                                                               

                                                                                                              Guest profile

                                                                                                              Shawn O’Malley is the chief editor and writer of the We Study Markets newsletter from The Investor’s Podcast Network, which is the world’s largest stock-investing podcast with over 110 million downloads.

                                                                                                              He writes for an audience of over 30,000 readers daily, breaking down the most important stories in financial markets with longer write-ups exploring financial history, the economics behind everyday life, and insights from legendary investors.

                                                                                                              Shawn hopes to help keep people informed about current news while adding the perspective of a long-term investor.

                                                                                                              Worst investment ever

                                                                                                              In April 2020, Shawn was sent home from school because of the COVID lockdowns. He was a junior in college at the time. He spent a few weeks doing nothing productive but soon realized this would be an extended lockdown. Shawn decided to find valuable ways to manage his time. He started taking long walks while listening to the We Study Billionaires podcast, which interested him in value investing.

                                                                                                              At the time, oil prices were negative. Shawn didn’t understand the futures market or know anything about oil. Still, it felt like an opportunity since he believed oil prices wouldn’t stay negative forever. Shawn bought into some oil and gas stocks and held them.

                                                                                                              Over the next year or so, Shawn developed this sort of outlook that some of the inflationary pressures of the lockdown would eventually manifest. So he started thinking more about how to hedge inflation to have exposure to energy prices. Shawn naively started looking for the most undervalued energy stocks in Russia. At the end of 2021, he bought into the Russia ETF as a creative and cheap way to play this inflation and energy price spike he was trying to foresee.

                                                                                                              Shawn held that investment for a year, and things were looking good. The inflation manifested, and the energy stocks started to rally. At this point, Shawn thought he was pretty clever. In January 2022, all these rumors about Russian troops gathering around Ukraine for an invasion started. Shawn believed it was just a conspiracy theory. He played down the risk and held down his investment. The attack happened in February, and the Russian ETF stopped trading, taking Shawn’s investment to zero.

                                                                                                              Lessons learned

                                                                                                              • Understand how geopolitical events and domestic politics affect investments.
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s takeaways

                                                                                                              • It takes time to become aware that risks are everywhere, and your first job is to understand them.
                                                                                                              • You won’t be compensated for lack of knowledge.
                                                                                                              • When you build a portfolio of international stocks, you’re not investing in global stocks but in a currency. So you have to at least understand the currency impact.
                                                                                                              
                                                                                                              

                                                                                                              Actionable advice

                                                                                                              You have to learn investment lessons for yourself. But, there are a lot of investment mistake stories from investing legends such as Warren Buffett. Read those archives, and you’ll learn a lot about investing mistakes, how to run or find great businesses, excellent management, compounding goodwill, and treating people well.

                                                                                                              No.1 goal for the next 12 months

                                                                                                              Shawn’s goal for the next 12 months is to hit 100,000 subscribers for the We Study Markets newsletter and make financial markets understandable to as many people as possible.

                                                                                                              Parting words

                                                                                                               

                                                                                                              “Thank you for having me on the show. I hope I can count on your listeners as readers of my newsletter one day.”

                                                                                                              Shawn O’Malley

                                                                                                               

                                                                                                              [spp-transcript]

                                                                                                               

                                                                                                              Connect with Shawn O'Malley

                                                                                                              • LinkedIn
                                                                                                              • Twitter
                                                                                                              • YouTube
                                                                                                              • Podcast
                                                                                                              • Website
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s books

                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                              • My Worst Investment Ever
                                                                                                              • 9 Valuation Mistakes and How to Avoid Them
                                                                                                              • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s online programs

                                                                                                              • Valuation Master Class
                                                                                                              • The Become a Better Investor Community
                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                              • Finance Made Ridiculously Simple
                                                                                                              • FVMR Investing: Quantamental Investing Across the World
                                                                                                              • Become a Great Presenter and Increase Your Influence
                                                                                                              • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                              • Achieve Your Goals
                                                                                                              
                                                                                                              

                                                                                                              Connect with Andrew Stotz:

                                                                                                              • astotz.com
                                                                                                              • LinkedIn
                                                                                                              • Facebook
                                                                                                              • Instagram
                                                                                                              • Twitter
                                                                                                              • YouTube
                                                                                                              • My Worst Investment Ever Podcast
                                                                                                              
                                                                                                              

                                                                                                              Further reading mentioned

                                                                                                              • Jeremy J. Siegel (September 2022), Stocks for the Long Run: The Definitive Guide to Financial Market Returns & Long-Term Investment Strategies
                                                                                                              
                                                                                                              ]]>0fa9bea9-c86c-4541-9f45-591ae2c3b790Wed, 14 Jun 2023 06:00:00 +070033:21falsefullPeter Saddington – I Got Fired From My Own CompanyBIO: Peter Saddington is a software developer, a multi-founder, an author, and a VC. He founded a $2.5M BTC mining fund, a $10M IoT fund, and a$50M Web3 fund in 2022.

                                                                                                              STORY: Peter hired an engineer who had impeccable technical skills. Peter was so impressed by the guy that he decided to make him the CEO of his startup. Six months later, the guy fired Peter from his own company.

                                                                                                              LEARNING: It takes more than technical skills to be a leader. A leader needs to be a person that can be led and can lead others.

                                                                                                               

                                                                                                              “The number one most important skill, I believe, in any type of investment, is are you willing to ask every single question possible?”

                                                                                                              Peter Saddington

                                                                                                               

                                                                                                              Guest profile

                                                                                                              Peter Saddington is a software developer, a multi-founder, an author, and a VC. He founded a $2.5M BTC mining fund, a $10M IoT fund, and a$50M Web3 fund in 2022. He published three books - Scrum, Agile, and PersonalBranding. He writes “The Agile VC” newsletter, which covers Inside Startups, Venture Capital, and life!

                                                                                                              Worst investment ever

                                                                                                              Over a decade ago, Peter built a great startup and bootstrapped it out of his garage. This was a passion project of his. At the time, the digital currencies were growing. Interestingly, there were all these silos of exchanges and no ability to create arbitrage opportunities between multiple exchanges. As an engineer, Peter thought this was an absolutely fantastic proposition of becoming a middleware solution provider so that traders and investors could trade across platforms and multiple exchanges and find opportunities for liquidity.

                                                                                                              Peter started building it. He put together a team and bootstrapped it with his own money. Eventually, over many validations, his community and user groups said this was amazing and should be scaled. Peter raised $4.8 million for this venture. Everything was great, and it seemed like there was no possibility that this thing could ever go off the rails. His global community of cryptocurrency and digital currency enthusiasts grew and had almost 78% daily active users.

                                                                                                              Peter had hired an engineer in whom he saw an amazing ability to take the company to great heights. Peter was so enamored by this engineer’s communication ability that he decided to mentor him. Peter was really impressed by his technical prowess. In his naivety, he believed this was the primary value that the engineer could bring to his company. Peter elevated the engineer to CEO. Big mistake! Six months later, the engineer fired Peter from his passion project.

                                                                                                              Lessons learned

                                                                                                              • When promoting an employee, you must understand the individual deeper than just what they bring to the table.
                                                                                                              • When choosing a leader, they need to be a person that can be led and can lead others.
                                                                                                              • Spend enough time with people before you promote them to truly understand their depth, morality, ethics, and, most importantly, integrity.
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s takeaways

                                                                                                              • When hiring a prospective leader, analyze everything that person can bring to the table, not just the skills.
                                                                                                              • Leaders need to be multifaceted and able to rise when things are tough.
                                                                                                              • The key to asking questions is listening; the key to listening is taking notes.
                                                                                                              
                                                                                                              

                                                                                                              Actionable advice

                                                                                                              Ask more questions. Reach for questions that avail emergent opportunities in emergent contexts and conversation. Be situationally aware enough to listen actively and ask pertinent and essential questions that give you context for informed decision-making.

                                                                                                              No.1 goal for the next 12 months

                                                                                                              Peter’s goal for the next 12 months is to launch a startup that intertwines his top passions; blockchain, cars, racing, and family.

                                                                                                              Parting words

                                                                                                               

                                                                                                              “Stay positive, and understand, as the stoics used to say, that the only thing that you ever have in your control is your own reasoned choice and how you’re going to respond to the situation at hand.”

                                                                                                              Peter Saddington

                                                                                                               

                                                                                                              [spp-transcript]

                                                                                                               

                                                                                                              Connect with Peter Saddington

                                                                                                              • LinkedIn
                                                                                                              • Twitter
                                                                                                              • Instagram
                                                                                                              • YouTube
                                                                                                              • Podcast
                                                                                                              • Blog
                                                                                                              • Book
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s books

                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                              • My Worst Investment Ever
                                                                                                              • 9 Valuation Mistakes and How to Avoid Them
                                                                                                              • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s online programs

                                                                                                              • Valuation Master Class
                                                                                                              • The Become a Better Investor Community
                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                              • Finance Made Ridiculously Simple
                                                                                                              • FVMR Investing: Quantamental Investing Across the World
                                                                                                              • Become a Great Presenter and Increase Your Influence
                                                                                                              • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                              • Achieve Your Goals
                                                                                                              
                                                                                                              

                                                                                                              Connect with Andrew Stotz:

                                                                                                              • astotz.com
                                                                                                              • LinkedIn
                                                                                                              • Facebook
                                                                                                              • Instagram
                                                                                                              • Twitter
                                                                                                              • YouTube
                                                                                                              • My Worst Investment Ever Podcast
                                                                                                              
                                                                                                              ]]>BIO: Peter Saddington is a software developer, a multi-founder, an author, and a VC. He founded a $2.5M BTC mining fund, a $10M IoT fund, and a$50M Web3 fund in 2022.

                                                                                                              STORY: Peter hired an engineer who had impeccable technical skills. Peter was so impressed by the guy that he decided to make him the CEO of his startup. Six months later, the guy fired Peter from his own company.

                                                                                                              LEARNING: It takes more than technical skills to be a leader. A leader needs to be a person that can be led and can lead others.

                                                                                                               

                                                                                                              “The number one most important skill, I believe, in any type of investment, is are you willing to ask every single question possible?”

                                                                                                              Peter Saddington

                                                                                                               

                                                                                                              Guest profile

                                                                                                              Peter Saddington is a software developer, a multi-founder, an author, and a VC. He founded a $2.5M BTC mining fund, a $10M IoT fund, and a$50M Web3 fund in 2022. He published three books - Scrum, Agile, and PersonalBranding. He writes “The Agile VC” newsletter, which covers Inside Startups, Venture Capital, and life!

                                                                                                              Worst investment ever

                                                                                                              Over a decade ago, Peter built a great startup and bootstrapped it out of his garage. This was a passion project of his. At the time, the digital currencies were growing. Interestingly, there were all these silos of exchanges and no ability to create arbitrage opportunities between multiple exchanges. As an engineer, Peter thought this was an absolutely fantastic proposition of becoming a middleware solution provider so that traders and investors could trade across platforms and multiple exchanges and find opportunities for liquidity.

                                                                                                              Peter started building it. He put together a team and bootstrapped it with his own money. Eventually, over many validations, his community and user groups said this was amazing and should be scaled. Peter raised $4.8 million for this venture. Everything was great, and it seemed like there was no possibility that this thing could ever go off the rails. His global community of cryptocurrency and digital currency enthusiasts grew and had almost 78% daily active users.

                                                                                                              Peter had hired an engineer in whom he saw an amazing ability to take the company to great heights. Peter was so enamored by this engineer’s communication ability that he decided to mentor him. Peter was really impressed by his technical prowess. In his naivety, he believed this was the primary value that the engineer could bring to his company. Peter elevated the engineer to CEO. Big mistake! Six months later, the engineer fired Peter from his passion project.

                                                                                                              Lessons learned

                                                                                                              • When promoting an employee, you must understand the individual deeper than just what they bring to the table.
                                                                                                              • When choosing a leader, they need to be a person that can be led and can lead others.
                                                                                                              • Spend enough time with people before you promote them to truly understand their depth, morality, ethics, and, most importantly, integrity.
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s takeaways

                                                                                                              • When hiring a prospective leader, analyze everything that person can bring to the table, not just the skills.
                                                                                                              • Leaders need to be multifaceted and able to rise when things are tough.
                                                                                                              • The key to asking questions is listening; the key to listening is taking notes.
                                                                                                              
                                                                                                              

                                                                                                              Actionable advice

                                                                                                              Ask more questions. Reach for questions that avail emergent opportunities in emergent contexts and conversation. Be situationally aware enough to listen actively and ask pertinent and essential questions that give you context for informed decision-making.

                                                                                                              No.1 goal for the next 12 months

                                                                                                              Peter’s goal for the next 12 months is to launch a startup that intertwines his top passions; blockchain, cars, racing, and family.

                                                                                                              Parting words

                                                                                                               

                                                                                                              “Stay positive, and understand, as the stoics used to say, that the only thing that you ever have in your control is your own reasoned choice and how you’re going to respond to the situation at hand.”

                                                                                                              Peter Saddington

                                                                                                               

                                                                                                              [spp-transcript]

                                                                                                               

                                                                                                              Connect with Peter Saddington

                                                                                                              • LinkedIn
                                                                                                              • Twitter
                                                                                                              • Instagram
                                                                                                              • YouTube
                                                                                                              • Podcast
                                                                                                              • Blog
                                                                                                              • Book
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s books

                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                              • My Worst Investment Ever
                                                                                                              • 9 Valuation Mistakes and How to Avoid Them
                                                                                                              • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s online programs

                                                                                                              • Valuation Master Class
                                                                                                              • The Become a Better Investor Community
                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                              • Finance Made Ridiculously Simple
                                                                                                              • FVMR Investing: Quantamental Investing Across the World
                                                                                                              • Become a Great Presenter and Increase Your Influence
                                                                                                              • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                              • Achieve Your Goals
                                                                                                              
                                                                                                              

                                                                                                              Connect with Andrew Stotz:

                                                                                                              • astotz.com
                                                                                                              • LinkedIn
                                                                                                              • Facebook
                                                                                                              • Instagram
                                                                                                              • Twitter
                                                                                                              • YouTube
                                                                                                              • My Worst Investment Ever Podcast
                                                                                                              
                                                                                                              ]]>1edddd4a-dabf-46e8-bbc0-1bafb5785f5bMon, 12 Jun 2023 06:00:00 +070039:45falsefullNeville Medhora – Hot Stock Tips Are Generally UnreliableBIO: Neville Medhora has been starting businesses and side projects since high school and has learned a bunch about what works and what doesn’t work. He is an advisor to numerous software companies and teaches copywriting at his business, CopywritingCourse.com.

                                                                                                              STORY: Neville started day trading in college and would try to get inside scoops to find cheap stocks that would explode. None of the scoops he ever got worked. Neville only made 5% return on his investment after a year of trading.

                                                                                                              LEARNING: 99% of the inside scoop is unreliable secondhand information. Do your due diligence. It’s important to know when to sell.

                                                                                                               

                                                                                                              “I realized that hot stock tips are terrible; none of them ever panned out. It’s when I did my due diligence that my investment worked out really well.”

                                                                                                              Neville Medhora

                                                                                                               

                                                                                                              Guest profile

                                                                                                              Neville Medhora has been starting businesses and side projects since high school and has learned a bunch about what works and what DOESN’T work. He is an advisor to numerous software companies and teaches copywriting at his business, CopywritingCourse.com.

                                                                                                              You can find him at “Neville Medhora” across all socials.

                                                                                                              Worst investment ever

                                                                                                              Neville was fortunate to have a little extra cash in college because he had started several businesses before. He started day trading stocks, and his plan was to pick a stock when it was cheap and then sell it when the price went up.

                                                                                                              Neville would try all sorts of things to find cheap stocks about to go up. He’d wake up in the morning to catch the bell ringing and start talking to people about stocks just to get the inside scoop, but none of his tactics worked.

                                                                                                              After a year of all the stress of trying to beat the market, Neville made just 5% gains on his investments.

                                                                                                              Lessons learned

                                                                                                              • It’s important to know when to sell.
                                                                                                              • The market is crazy and erratic and doesn’t obey timelines.
                                                                                                              • Buying a good business is better than trying to beat the stock market.
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s takeaways

                                                                                                              • 99% of the inside scoop is unreliable secondhand information.
                                                                                                              • Always do your due diligence before you invest.
                                                                                                              
                                                                                                              

                                                                                                              Actionable advice

                                                                                                              Don’t get caught up in buying something because it’s cheap. Instead, read the company statements and learn how to analyze a company.

                                                                                                              Neville’s recommendations

                                                                                                              Neville recommends following him on social media, where you’ll find much of the stuff he teaches. He also recommends joining his newsletter to get helpful marketing tips every Friday.

                                                                                                              No.1 goal for the next 12 months

                                                                                                              Neville’s goal for the next 12 months is to make sure that he is set up well to retire at 50.

                                                                                                              Parting words

                                                                                                               

                                                                                                              “Be well and prosper. Don’t make stupid mistakes, but when you do, learn from them.”

                                                                                                              Neville Medhora

                                                                                                               

                                                                                                              [spp-transcript]

                                                                                                               

                                                                                                              Connect with Neville Medhora

                                                                                                              • LinkedIn
                                                                                                              • Twitter
                                                                                                              • Facebook
                                                                                                              • YouTube
                                                                                                              • Podcast
                                                                                                              • Book
                                                                                                              
                                                                                                              

                                                                                                              Connect with Jack Farley

                                                                                                              • LinkedIn
                                                                                                              • Twitter
                                                                                                              • YouTube
                                                                                                              • Podcast
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s books

                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                              • My Worst Investment Ever
                                                                                                              • 9 Valuation Mistakes and How to Avoid Them
                                                                                                              • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s online programs

                                                                                                              • Valuation Master Class
                                                                                                              • The Become a Better Investor Community
                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                              • Finance Made Ridiculously Simple
                                                                                                              • FVMR Investing: Quantamental Investing Across the World
                                                                                                              • Become a Great Presenter and Increase Your Influence
                                                                                                              • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                              • Achieve Your Goals
                                                                                                              
                                                                                                              

                                                                                                              Connect with Andrew Stotz:

                                                                                                              • astotz.com
                                                                                                              • LinkedIn
                                                                                                              • Facebook
                                                                                                              • Instagram
                                                                                                              • Twitter
                                                                                                              • YouTube
                                                                                                              • My Worst Investment Ever Podcast
                                                                                                              
                                                                                                              ]]>BIO: Neville Medhora has been starting businesses and side projects since high school and has learned a bunch about what works and what doesn’t work. He is an advisor to numerous software companies and teaches copywriting at his business, CopywritingCourse.com.

                                                                                                              STORY: Neville started day trading in college and would try to get inside scoops to find cheap stocks that would explode. None of the scoops he ever got worked. Neville only made 5% return on his investment after a year of trading.

                                                                                                              LEARNING: 99% of the inside scoop is unreliable secondhand information. Do your due diligence. It’s important to know when to sell.

                                                                                                               

                                                                                                              “I realized that hot stock tips are terrible; none of them ever panned out. It’s when I did my due diligence that my investment worked out really well.”

                                                                                                              Neville Medhora

                                                                                                               

                                                                                                              Guest profile

                                                                                                              Neville Medhora has been starting businesses and side projects since high school and has learned a bunch about what works and what DOESN’T work. He is an advisor to numerous software companies and teaches copywriting at his business, CopywritingCourse.com.

                                                                                                              You can find him at “Neville Medhora” across all socials.

                                                                                                              Worst investment ever

                                                                                                              Neville was fortunate to have a little extra cash in college because he had started several businesses before. He started day trading stocks, and his plan was to pick a stock when it was cheap and then sell it when the price went up.

                                                                                                              Neville would try all sorts of things to find cheap stocks about to go up. He’d wake up in the morning to catch the bell ringing and start talking to people about stocks just to get the inside scoop, but none of his tactics worked.

                                                                                                              After a year of all the stress of trying to beat the market, Neville made just 5% gains on his investments.

                                                                                                              Lessons learned

                                                                                                              • It’s important to know when to sell.
                                                                                                              • The market is crazy and erratic and doesn’t obey timelines.
                                                                                                              • Buying a good business is better than trying to beat the stock market.
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s takeaways

                                                                                                              • 99% of the inside scoop is unreliable secondhand information.
                                                                                                              • Always do your due diligence before you invest.
                                                                                                              
                                                                                                              

                                                                                                              Actionable advice

                                                                                                              Don’t get caught up in buying something because it’s cheap. Instead, read the company statements and learn how to analyze a company.

                                                                                                              Neville’s recommendations

                                                                                                              Neville recommends following him on social media, where you’ll find much of the stuff he teaches. He also recommends joining his newsletter to get helpful marketing tips every Friday.

                                                                                                              No.1 goal for the next 12 months

                                                                                                              Neville’s goal for the next 12 months is to make sure that he is set up well to retire at 50.

                                                                                                              Parting words

                                                                                                               

                                                                                                              “Be well and prosper. Don’t make stupid mistakes, but when you do, learn from them.”

                                                                                                              Neville Medhora

                                                                                                               

                                                                                                              [spp-transcript]

                                                                                                               

                                                                                                              Connect with Neville Medhora

                                                                                                              • LinkedIn
                                                                                                              • Twitter
                                                                                                              • Facebook
                                                                                                              • YouTube
                                                                                                              • Podcast
                                                                                                              • Book
                                                                                                              
                                                                                                              

                                                                                                              Connect with Jack Farley

                                                                                                              • LinkedIn
                                                                                                              • Twitter
                                                                                                              • YouTube
                                                                                                              • Podcast
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s books

                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                              • My Worst Investment Ever
                                                                                                              • 9 Valuation Mistakes and How to Avoid Them
                                                                                                              • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s online programs

                                                                                                              • Valuation Master Class
                                                                                                              • The Become a Better Investor Community
                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                              • Finance Made Ridiculously Simple
                                                                                                              • FVMR Investing: Quantamental Investing Across the World
                                                                                                              • Become a Great Presenter and Increase Your Influence
                                                                                                              • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                              • Achieve Your Goals
                                                                                                              
                                                                                                              

                                                                                                              Connect with Andrew Stotz:

                                                                                                              • astotz.com
                                                                                                              • LinkedIn
                                                                                                              • Facebook
                                                                                                              • Instagram
                                                                                                              • Twitter
                                                                                                              • YouTube
                                                                                                              • My Worst Investment Ever Podcast
                                                                                                              
                                                                                                              ]]>1285254e-c3ec-4eea-a47c-03160cf876b1Thu, 08 Jun 2023 06:00:00 +070034:23falsefullJack Farley – Don’t Play in Markets You Don’t KnowBIO: Jack Farley is the host of the Forward Guidance podcast. He is interested in all things liquidity, macro, and central banking.

                                                                                                              STORY: Jack bought a lot of put options on the markets and individual stocks, notably Tesla, in February 2020 when the market was bearish. When the market crashed in March 2020, Jack made so much money. But, soon, the market started going up, and his position dropped to zero.

                                                                                                              LEARNING: Don’t view the market as a place to create wealth; view it as a place to grow it. Don’t confuse being lucky with being an intelligent investor.

                                                                                                               

                                                                                                              “When you get a windfall, realize those gains, and at the very least, trim the position down.”

                                                                                                              Jack Farley

                                                                                                               

                                                                                                              Guest profile

                                                                                                              Jack Farley is the host of the Forward Guidance podcast. He is interested in all things liquidity, macro, and central banking. Jack graduated from Brown University with a degree in Economics and has done nearly 500 long-form interviews on investing and macroeconomics.

                                                                                                              Worst investment ever

                                                                                                              Jack had gotten quite bearish on the market in January and February 2020. So he bought a lot of put options on the markets and individual stocks, notably Tesla. All individual stocks crashed throughout early March 2020. Jack made so much more money than he ever thought was possible.

                                                                                                              He continued consuming this bearish macro content from CNBC, Bloomberg, and the Wall Street Journal. When the stock market rallied from March 23 to April 1, Jack was told it was just a bear market rally and believed it. But the market continued to grind higher, and Jack’s position kept falling until it reached zero.

                                                                                                              Lessons learned

                                                                                                              • Know the difference between winning because you were smart and made the right decision and when you were lucky.
                                                                                                              • It’s really tough to beat the market.
                                                                                                              • The ultimate hack is to beat the stock market and then invest in the S&P 500 for the rest of your life.
                                                                                                              • When you get a windfall, and you’re lucky enough to win the day, don’t assume it’s because you’re so smart because, most likely, you’re not.
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s takeaways

                                                                                                              • Set up your wealth creation engine. That’s either your business or your salary.
                                                                                                              • Don’t view the market as a place to create wealth; view it as a place to grow it.
                                                                                                              
                                                                                                              

                                                                                                              Actionable advice

                                                                                                              Don’t play in markets where you don’t know what you’re doing.

                                                                                                              Jack’s recommendations

                                                                                                              Jack recommends listening to his podcast for a deep-dive conversation on finance. The talks are associated with what’s going on now.

                                                                                                              No.1 goal for the next 12 months

                                                                                                              Jack’s goal for the next 12 months is to create kickass content for his podcast and grow the show.

                                                                                                              Parting words

                                                                                                               

                                                                                                              “I feel like a winner for having been on the show.”

                                                                                                              Jack Farley

                                                                                                               

                                                                                                              [spp-transcript]

                                                                                                               

                                                                                                              Connect with Jack Farley

                                                                                                              • LinkedIn
                                                                                                              • Twitter
                                                                                                              • YouTube
                                                                                                              • Podcast
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s books

                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                              • My Worst Investment Ever
                                                                                                              • 9 Valuation Mistakes and How to Avoid Them
                                                                                                              • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s online programs

                                                                                                              • Valuation Master Class
                                                                                                              • The Become a Better Investor Community
                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                              • Finance Made Ridiculously Simple
                                                                                                              • FVMR Investing: Quantamental Investing Across the World
                                                                                                              • Become a Great Presenter and Increase Your Influence
                                                                                                              • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                              • Achieve Your Goals
                                                                                                              
                                                                                                              

                                                                                                              Connect with Andrew Stotz:

                                                                                                              • astotz.com
                                                                                                              • LinkedIn
                                                                                                              • Facebook
                                                                                                              • Instagram
                                                                                                              • Twitter
                                                                                                              • YouTube
                                                                                                              • My Worst Investment Ever Podcast
                                                                                                              
                                                                                                              ]]>BIO: Jack Farley is the host of the Forward Guidance podcast. He is interested in all things liquidity, macro, and central banking.

                                                                                                              STORY: Jack bought a lot of put options on the markets and individual stocks, notably Tesla, in February 2020 when the market was bearish. When the market crashed in March 2020, Jack made so much money. But, soon, the market started going up, and his position dropped to zero.

                                                                                                              LEARNING: Don’t view the market as a place to create wealth; view it as a place to grow it. Don’t confuse being lucky with being an intelligent investor.

                                                                                                               

                                                                                                              “When you get a windfall, realize those gains, and at the very least, trim the position down.”

                                                                                                              Jack Farley

                                                                                                               

                                                                                                              Guest profile

                                                                                                              Jack Farley is the host of the Forward Guidance podcast. He is interested in all things liquidity, macro, and central banking. Jack graduated from Brown University with a degree in Economics and has done nearly 500 long-form interviews on investing and macroeconomics.

                                                                                                              Worst investment ever

                                                                                                              Jack had gotten quite bearish on the market in January and February 2020. So he bought a lot of put options on the markets and individual stocks, notably Tesla. All individual stocks crashed throughout early March 2020. Jack made so much more money than he ever thought was possible.

                                                                                                              He continued consuming this bearish macro content from CNBC, Bloomberg, and the Wall Street Journal. When the stock market rallied from March 23 to April 1, Jack was told it was just a bear market rally and believed it. But the market continued to grind higher, and Jack’s position kept falling until it reached zero.

                                                                                                              Lessons learned

                                                                                                              • Know the difference between winning because you were smart and made the right decision and when you were lucky.
                                                                                                              • It’s really tough to beat the market.
                                                                                                              • The ultimate hack is to beat the stock market and then invest in the S&P 500 for the rest of your life.
                                                                                                              • When you get a windfall, and you’re lucky enough to win the day, don’t assume it’s because you’re so smart because, most likely, you’re not.
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s takeaways

                                                                                                              • Set up your wealth creation engine. That’s either your business or your salary.
                                                                                                              • Don’t view the market as a place to create wealth; view it as a place to grow it.
                                                                                                              
                                                                                                              

                                                                                                              Actionable advice

                                                                                                              Don’t play in markets where you don’t know what you’re doing.

                                                                                                              Jack’s recommendations

                                                                                                              Jack recommends listening to his podcast for a deep-dive conversation on finance. The talks are associated with what’s going on now.

                                                                                                              No.1 goal for the next 12 months

                                                                                                              Jack’s goal for the next 12 months is to create kickass content for his podcast and grow the show.

                                                                                                              Parting words

                                                                                                               

                                                                                                              “I feel like a winner for having been on the show.”

                                                                                                              Jack Farley

                                                                                                               

                                                                                                              [spp-transcript]

                                                                                                               

                                                                                                              Connect with Jack Farley

                                                                                                              • LinkedIn
                                                                                                              • Twitter
                                                                                                              • YouTube
                                                                                                              • Podcast
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s books

                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                              • My Worst Investment Ever
                                                                                                              • 9 Valuation Mistakes and How to Avoid Them
                                                                                                              • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s online programs

                                                                                                              • Valuation Master Class
                                                                                                              • The Become a Better Investor Community
                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                              • Finance Made Ridiculously Simple
                                                                                                              • FVMR Investing: Quantamental Investing Across the World
                                                                                                              • Become a Great Presenter and Increase Your Influence
                                                                                                              • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                              • Achieve Your Goals
                                                                                                              
                                                                                                              

                                                                                                              Connect with Andrew Stotz:

                                                                                                              • astotz.com
                                                                                                              • LinkedIn
                                                                                                              • Facebook
                                                                                                              • Instagram
                                                                                                              • Twitter
                                                                                                              • YouTube
                                                                                                              • My Worst Investment Ever Podcast
                                                                                                              
                                                                                                              ]]>ccc9c381-66aa-4fab-888f-af178e8106f1Wed, 07 Jun 2023 06:00:00 +070034:45falsefullCarter Malloy – Valuation Is Not a Reason to InvestBIO: AcreTrader’s CEO, Carter Malloy, grew up in an Arkansas farming family and has had a lifelong passion for agriculture and investing. Before founding AcreTrader, he spent five years as part of the founding team of a successful global equity investment firm.

                                                                                                              STORY: Carter was super impressed by a healthcare software company whose stock was really expensive, and the valuation was crazy high. Carter decided to short the company’s stock. However, he lost most of his money because the stock almost doubled on him.

                                                                                                              LEARNING: Valuation is not a reason to invest. Don’t bet against really good management teams.

                                                                                                               

                                                                                                              “Valuation should inform your position size. However, look at it across a large spectrum of metrics and measurements to help you determine whether you have a thesis or not.”

                                                                                                              Carter Malloy

                                                                                                               

                                                                                                              Guest profile

                                                                                                              AcreTrader’s CEO, Carter Malloy, grew up in an Arkansas farming family and has had a lifelong passion for agriculture and investing. Before founding AcreTrader, he spent five years as part of the founding team of a successful global equity investment firm.

                                                                                                              Before joining in 2013, Carter was a Managing Director with Stephens Inc., a large private investment bank, where he was an equity research analyst.

                                                                                                              At AcreTrader, Carter has successfully raised over $60 million in Series B funding and grown from 20 employees to 120 employees across the company’s two business divisions, which include AcreTrader, the farmland investing platform, and Acres, a land research platform.

                                                                                                              Worst investment ever

                                                                                                              As an equity investor, Carter would generally chase okay businesses valued as great ones. One particular company, a healthcare software business, caught Carter’s attention. He had a thesis around the macro developments—both cyclical and secular headwinds—that this company faced. He realized there were these real pressures on that business that the rest of Wall Street and the investment world was seeing. The stock was really expensive, and the valuation was crazy high.

                                                                                                              Carter started digging into the company. He met with the company CEO, and this guy was unbelievably impressive. Carter dug deeper into the company culture and the people who worked there, concluding that this was a well-run business. Carter decided to invest in the company. However, he lost most of the principal because the stock almost halved on him.

                                                                                                              Lessons learned

                                                                                                              • Valuation is an essential part of your research. It can support an investment decision but is not a reason to invest.
                                                                                                              • Don’t bet against excellent management teams because they can absolutely—and often do—determine the outcome.
                                                                                                              • Valuation should inform your position size.
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s takeaways

                                                                                                              • Valuation will be a tool if you don’t have any other fundamental things driving your investment decision.
                                                                                                              
                                                                                                              

                                                                                                              Actionable advice

                                                                                                              Don’t invest in single securities. Instead, invest in ETFs.

                                                                                                              Carter’s recommendations

                                                                                                              If you want to be a good investor, understand what CFAs read and then take the Kaplan Schweser CFA Level One course.

                                                                                                              No.1 goal for the next 12 months

                                                                                                              Carter’s goal for the next 12 months is to spend more time with his children.

                                                                                                              Parting words

                                                                                                               

                                                                                                              “This has been fantastic. I sincerely appreciate you.”

                                                                                                              Carter Malloy

                                                                                                               

                                                                                                              [spp-transcript]

                                                                                                               

                                                                                                              Connect with Carter Malloy

                                                                                                              • LinkedIn
                                                                                                              • Twitter
                                                                                                              • Facebook
                                                                                                              • Instagram
                                                                                                              • YouTube
                                                                                                              • Website
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s books

                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                              • My Worst Investment Ever
                                                                                                              • 9 Valuation Mistakes and How to Avoid Them
                                                                                                              • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s online programs

                                                                                                              • Valuation Master Class
                                                                                                              • The Become a Better Investor Community
                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                              • Finance Made Ridiculously Simple
                                                                                                              • FVMR Investing: Quantamental Investing Across the World
                                                                                                              • Become a Great Presenter and Increase Your Influence
                                                                                                              • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                              • Achieve Your Goals
                                                                                                              
                                                                                                              

                                                                                                              Connect with Andrew Stotz:

                                                                                                              • astotz.com
                                                                                                              • LinkedIn
                                                                                                              • Facebook
                                                                                                              • Instagram
                                                                                                              • Twitter
                                                                                                              • YouTube
                                                                                                              • My Worst Investment Ever Podcast
                                                                                                              
                                                                                                              ]]>BIO: AcreTrader’s CEO, Carter Malloy, grew up in an Arkansas farming family and has had a lifelong passion for agriculture and investing. Before founding AcreTrader, he spent five years as part of the founding team of a successful global equity investment firm.

                                                                                                              STORY: Carter was super impressed by a healthcare software company whose stock was really expensive, and the valuation was crazy high. Carter decided to short the company’s stock. However, he lost most of his money because the stock almost doubled on him.

                                                                                                              LEARNING: Valuation is not a reason to invest. Don’t bet against really good management teams.

                                                                                                               

                                                                                                              “Valuation should inform your position size. However, look at it across a large spectrum of metrics and measurements to help you determine whether you have a thesis or not.”

                                                                                                              Carter Malloy

                                                                                                               

                                                                                                              Guest profile

                                                                                                              AcreTrader’s CEO, Carter Malloy, grew up in an Arkansas farming family and has had a lifelong passion for agriculture and investing. Before founding AcreTrader, he spent five years as part of the founding team of a successful global equity investment firm.

                                                                                                              Before joining in 2013, Carter was a Managing Director with Stephens Inc., a large private investment bank, where he was an equity research analyst.

                                                                                                              At AcreTrader, Carter has successfully raised over $60 million in Series B funding and grown from 20 employees to 120 employees across the company’s two business divisions, which include AcreTrader, the farmland investing platform, and Acres, a land research platform.

                                                                                                              Worst investment ever

                                                                                                              As an equity investor, Carter would generally chase okay businesses valued as great ones. One particular company, a healthcare software business, caught Carter’s attention. He had a thesis around the macro developments—both cyclical and secular headwinds—that this company faced. He realized there were these real pressures on that business that the rest of Wall Street and the investment world was seeing. The stock was really expensive, and the valuation was crazy high.

                                                                                                              Carter started digging into the company. He met with the company CEO, and this guy was unbelievably impressive. Carter dug deeper into the company culture and the people who worked there, concluding that this was a well-run business. Carter decided to invest in the company. However, he lost most of the principal because the stock almost halved on him.

                                                                                                              Lessons learned

                                                                                                              • Valuation is an essential part of your research. It can support an investment decision but is not a reason to invest.
                                                                                                              • Don’t bet against excellent management teams because they can absolutely—and often do—determine the outcome.
                                                                                                              • Valuation should inform your position size.
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s takeaways

                                                                                                              • Valuation will be a tool if you don’t have any other fundamental things driving your investment decision.
                                                                                                              
                                                                                                              

                                                                                                              Actionable advice

                                                                                                              Don’t invest in single securities. Instead, invest in ETFs.

                                                                                                              Carter’s recommendations

                                                                                                              If you want to be a good investor, understand what CFAs read and then take the Kaplan Schweser CFA Level One course.

                                                                                                              No.1 goal for the next 12 months

                                                                                                              Carter’s goal for the next 12 months is to spend more time with his children.

                                                                                                              Parting words

                                                                                                               

                                                                                                              “This has been fantastic. I sincerely appreciate you.”

                                                                                                              Carter Malloy

                                                                                                               

                                                                                                              [spp-transcript]

                                                                                                               

                                                                                                              Connect with Carter Malloy

                                                                                                              • LinkedIn
                                                                                                              • Twitter
                                                                                                              • Facebook
                                                                                                              • Instagram
                                                                                                              • YouTube
                                                                                                              • Website
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s books

                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                              • My Worst Investment Ever
                                                                                                              • 9 Valuation Mistakes and How to Avoid Them
                                                                                                              • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s online programs

                                                                                                              • Valuation Master Class
                                                                                                              • The Become a Better Investor Community
                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                              • Finance Made Ridiculously Simple
                                                                                                              • FVMR Investing: Quantamental Investing Across the World
                                                                                                              • Become a Great Presenter and Increase Your Influence
                                                                                                              • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                              • Achieve Your Goals
                                                                                                              
                                                                                                              

                                                                                                              Connect with Andrew Stotz:

                                                                                                              • astotz.com
                                                                                                              • LinkedIn
                                                                                                              • Facebook
                                                                                                              • Instagram
                                                                                                              • Twitter
                                                                                                              • YouTube
                                                                                                              • My Worst Investment Ever Podcast
                                                                                                              
                                                                                                              ]]>fe944144-d5d2-4f05-86d1-4df76366de1dMon, 05 Jun 2023 06:00:00 +070031:40falsefullISMS 24: Larry Swedroe – Confusing Skill and Luck Can Stop You From Investing WiselyIn this episode of Investment Strategy Made Simple (ISMS), Andrew and Larry discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this fourth episode, they talk about mistake number 7: Do you confuse skill and luck? And mistake number 8: Do you avoid passive investing because you sense a loss of control?

                                                                                                              LEARNING: When gauging a fund manager’s performance, consider risk-adjusted performance. If you’re a passive investor and use a systematic strategy, you’re 100% in control.

                                                                                                               

                                                                                                              “You have to accept that you can only control what you can control; you can’t control the unpredictable things that happen.”

                                                                                                              Larry Swedroe

                                                                                                               

                                                                                                              In today’s episode, Andrew continues his discussion with Larry Swedroe, head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                                                              Larry deeply understands the world of academic research and investing, especially risk. Today Andrew and Larry discuss a chapter of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this fifth series, they talk about mistake number seven: Do you confuse skill and luck? And mistake number eight: Do you avoid passive investing because you sense a loss of control?

                                                                                                              Missed out on previous mistakes? Check them out:

                                                                                                              • ISMS 8: Larry Swedroe – Are You Overconfident in Your Skills?
                                                                                                              • ISMS 17: Larry Swedroe – Do You Project Recent Trends Indefinitely Into the Future?
                                                                                                              • ISMS 20: Larry Swedroe – Do You Extrapolate From Small Samples and Trust Your Intuition?
                                                                                                              • ISMS 23: Larry Swedroe – Do You Allow Yourself to Be Influenced by Your Ego and Herd Mentality?
                                                                                                              
                                                                                                              

                                                                                                              Mistake number 7: Do you confuse skill and luck?

                                                                                                              According to Larry, investors don’t know statistics well enough to differentiate skill from luck. To understand if an outperformer is outperforming because of skill and not luck, look at risk-adjusted performance. So, for example, over the very long term, value stocks have outperformed growth stocks, and small stocks have outperformed large stocks. So somebody who outperforms simply because they owned lots of small and value stocks more than the market isn’t outperforming on a properly adjusted basis. Other factors than size and value, such as momentum, profitability, or quality, can also drive the return. Larry recommends Portfolio Visualizer, a tool that shows how much exposure an active fund has to those factors. It also reveals the alpha or the remaining performance that cannot be explained.

                                                                                                              The second thing you need to consider is whether the fund’s assets are growing. If they’ve grown, the odds are pretty good that that outperformance will disappear. The other thing you can look at is the metrics of the stocks they’re holding. If they’re invested in hot stocks and their values have gone up, that’s a sign not to chase the outperformance.

                                                                                                              If you want to outperform by picking managers, Larry advises choosing the largest pension plans because they hire great consultants. They also have the best databases and do thousands of interviews yearly, so you can be sure they’ve asked every question you can think of while doing their due diligence. But still, evidence shows their ability to predict future winners doesn’t exist.

                                                                                                              Mistake number 8: Do you avoid passive investing because you sense a loss of control?

                                                                                                              In active investing, individuals perform stock selection and/or market timing. Passive investing doesn’t involve any of that. It defines its universe and then buys and holds all the securities that meet that definition.

                                                                                                              With passive investing, the problem comes in when the markets are experiencing uncertainties like the Ukrainian war, the COVID-19 pandemic, etc. The investor wants to be in control but with an index fund, the markets are in control. So many people consider active management a way of giving them control. They’re either in control of buying individual stocks, choosing the fund manager, and when they go in and out of the market. The problem is all the evidence shows that control costs you money, and you’re more likely to make mistakes and end up underperforming.

                                                                                                              Larry also advises investors to understand that when you’re passive and use a systematic strategy, you’re 100% in control. But you have to accept that you can only control what you can; you can’t control the unpredictable things that happen. Make sure your portfolio design doesn’t take more risks than you have the ability, willingness, and need to take. You should also be hyper-diversified to withstand the shocks that happen to every asset class.

                                                                                                              About Larry Swedroe

                                                                                                              Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                                                              Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                                                              Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                                                              Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                                                               

                                                                                                              [spp-transcript]

                                                                                                               

                                                                                                              Connect with Larry Swedroe

                                                                                                              • LinkedIn
                                                                                                              • Twitter
                                                                                                              • Website
                                                                                                              • Books
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s books

                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                              • My Worst Investment Ever
                                                                                                              • 9 Valuation Mistakes and How to Avoid Them
                                                                                                              • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                              
                                                                                                              

                                                                                                              Andrew’s online programs

                                                                                                              • Valuation Master Class
                                                                                                              • The Become a Better Investor Community
                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                              • Finance Made Ridiculously Simple
                                                                                                              • FVMR Investing: Quantamental Investing Across the World
                                                                                                              • Become a Great Presenter and Increase Your Influence
                                                                                                              • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                              • In this episode of Investment Strategy Made Simple (ISMS), Andrew and Larry discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this fourth episode, they talk about mistake number 7: Do you confuse skill and luck? And mistake number 8: Do you avoid passive investing because you sense a loss of control?

                                                                                                                LEARNING: When gauging a fund manager’s performance, consider risk-adjusted performance. If you’re a passive investor and use a systematic strategy, you’re 100% in control.

                                                                                                                 

                                                                                                                “You have to accept that you can only control what you can control; you can’t control the unpredictable things that happen.”

                                                                                                                Larry Swedroe

                                                                                                                 

                                                                                                                In today’s episode, Andrew continues his discussion with Larry Swedroe, head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                                                                Larry deeply understands the world of academic research and investing, especially risk. Today Andrew and Larry discuss a chapter of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this fifth series, they talk about mistake number seven: Do you confuse skill and luck? And mistake number eight: Do you avoid passive investing because you sense a loss of control?

                                                                                                                Missed out on previous mistakes? Check them out:

                                                                                                                • ISMS 8: Larry Swedroe – Are You Overconfident in Your Skills?
                                                                                                                • ISMS 17: Larry Swedroe – Do You Project Recent Trends Indefinitely Into the Future?
                                                                                                                • ISMS 20: Larry Swedroe – Do You Extrapolate From Small Samples and Trust Your Intuition?
                                                                                                                • ISMS 23: Larry Swedroe – Do You Allow Yourself to Be Influenced by Your Ego and Herd Mentality?
                                                                                                                
                                                                                                                

                                                                                                                Mistake number 7: Do you confuse skill and luck?

                                                                                                                According to Larry, investors don’t know statistics well enough to differentiate skill from luck. To understand if an outperformer is outperforming because of skill and not luck, look at risk-adjusted performance. So, for example, over the very long term, value stocks have outperformed growth stocks, and small stocks have outperformed large stocks. So somebody who outperforms simply because they owned lots of small and value stocks more than the market isn’t outperforming on a properly adjusted basis. Other factors than size and value, such as momentum, profitability, or quality, can also drive the return. Larry recommends Portfolio Visualizer, a tool that shows how much exposure an active fund has to those factors. It also reveals the alpha or the remaining performance that cannot be explained.

                                                                                                                The second thing you need to consider is whether the fund’s assets are growing. If they’ve grown, the odds are pretty good that that outperformance will disappear. The other thing you can look at is the metrics of the stocks they’re holding. If they’re invested in hot stocks and their values have gone up, that’s a sign not to chase the outperformance.

                                                                                                                If you want to outperform by picking managers, Larry advises choosing the largest pension plans because they hire great consultants. They also have the best databases and do thousands of interviews yearly, so you can be sure they’ve asked every question you can think of while doing their due diligence. But still, evidence shows their ability to predict future winners doesn’t exist.

                                                                                                                Mistake number 8: Do you avoid passive investing because you sense a loss of control?

                                                                                                                In active investing, individuals perform stock selection and/or market timing. Passive investing doesn’t involve any of that. It defines its universe and then buys and holds all the securities that meet that definition.

                                                                                                                With passive investing, the problem comes in when the markets are experiencing uncertainties like the Ukrainian war, the COVID-19 pandemic, etc. The investor wants to be in control but with an index fund, the markets are in control. So many people consider active management a way of giving them control. They’re either in control of buying individual stocks, choosing the fund manager, and when they go in and out of the market. The problem is all the evidence shows that control costs you money, and you’re more likely to make mistakes and end up underperforming.

                                                                                                                Larry also advises investors to understand that when you’re passive and use a systematic strategy, you’re 100% in control. But you have to accept that you can only control what you can; you can’t control the unpredictable things that happen. Make sure your portfolio design doesn’t take more risks than you have the ability, willingness, and need to take. You should also be hyper-diversified to withstand the shocks that happen to every asset class.

                                                                                                                About Larry Swedroe

                                                                                                                Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                                                                Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                                                                Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                                                                Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                                                                 

                                                                                                                [spp-transcript]

                                                                                                                 

                                                                                                                Connect with Larry Swedroe

                                                                                                                • LinkedIn
                                                                                                                • Twitter
                                                                                                                • Website
                                                                                                                • Books
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s books

                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • My Worst Investment Ever
                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s online programs

                                                                                                                • Valuation Master Class
                                                                                                                • The Become a Better Investor Community
                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                • Achieve Your Goals
                                                                                                                
                                                                                                                

                                                                                                                Connect with Andrew Stotz:

                                                                                                                • astotz.com
                                                                                                                • LinkedIn
                                                                                                                • Facebook
                                                                                                                • Instagram
                                                                                                                • Twitter
                                                                                                                • YouTube
                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                
                                                                                                                ]]>eec07d70-c04a-46c2-90b4-b683309509ccFri, 02 Jun 2023 06:00:00 +070040:50falsefullGisela Hausmann – Encourage and Appreciate Your Employees’ CreativityBIO: Gisela Hausmann graduated with a master’s degree in film & mass media from the University of Vienna. She’s one of a dying breed of adventurers – she digs in and researches topics of interest from the ground up, then tells things as she sees them.

                                                                                                                STORY: Gisela joins the podcast again, discussing her new book Winning @ Amazon. Today she shares advice on how employees can allocate their creativity in a way that’s appreciated. She also talks about why employees need to start thinking outside the box and focus on problem-solving and innovation instead of feeling sorry for themselves and staying stuck where they’re not appreciated.

                                                                                                                LEARNING: Encourage and appreciate your employees’ creativity.

                                                                                                                 

                                                                                                                “Appreciated creativity creates more creativity.”

                                                                                                                Gisela Hausmann

                                                                                                                 

                                                                                                                Guest profile

                                                                                                                Gisela Hausmann graduated with a master’s degree in film & mass media from the University of Vienna, the oldest university in the German-speaking world.

                                                                                                                She is one of a dying breed of adventurers – she digs in and researches topics of interest from the ground up, then tells things as she sees them.

                                                                                                                An author of two dozen books, her work has been featured in regional, national, and international publications, including GeekWire, Inc, Success (print magazine), Entrepreneur, and Bloomberg’s podcast ‘Decrypted.’ She is also the winner of the 2016 Sparky Award “Best Subject Line.”

                                                                                                                Born to be an adventurer, she hiked in the Himalayas and the Gobi Desert, crossed Russia on the Trans-Siberian Railway twice, and meditated in the Dalai Lama’s private room at the Potala Palace in Lhasa, Tibet.

                                                                                                                Her motto is: “Don’t wait. The time will never be just right.” – Napoleon Hill

                                                                                                                Encourage employee creativity

                                                                                                                Gisela Hausmann first appeared on the podcast in episode 539, where she narrated how Amazon implemented suggestions she’d made in her book Inside Amazon: My Story. Gisela is back with a new book Winning @ Amazon. Today she shares advice on how employees can allocate their creativity in a way that’s appreciated. She also talks about why employees need to start thinking outside the box and focus on problem-solving and innovation instead of feeling sorry for themselves and staying stuck where they’re not appreciated.

                                                                                                                According to Gisela, companies consistently ignore the input from clever, hardworking, dedicated people and—seemingly—perceive them as “irrelevant little cogwheels in a big machine.” Senior management is often threatened by subordinates who seem more innovative than them, and it’s no wonder they ignore their creative suggestions. This has led to employees choosing to keep suggestions to themselves, and this is killing most organizations, especially the big ones.

                                                                                                                Gisela advises organizations that want to encourage employee creativity to make a written plan. Define how employees who come up with ideas implemented in the company will be rewarded. Ensure that your rewards are something better than an in-house product. It should be something special that makes the employee feel appreciated. Gisela insists on the written plan because if you don’t encourage creativity in black and white, it won’t happen.

                                                                                                                You create positive energy in your business by acknowledging that you need creative ideas from your people and encouraging them. When you create positive energy, everybody wants to stay with you, and they carry this energy into the rest of the world.

                                                                                                                Parting words

                                                                                                                 

                                                                                                                “If your employees carry forward who you are, they will bring the people to you.”

                                                                                                                Gisela Hausmann

                                                                                                                 

                                                                                                                [spp-transcript]

                                                                                                                 

                                                                                                                Connect with Gisela Hausmann

                                                                                                                • LinkedIn
                                                                                                                • Twitter
                                                                                                                • Books
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s books

                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • My Worst Investment Ever
                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s online programs

                                                                                                                • Valuation Master Class
                                                                                                                • The Become a Better Investor Community
                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                • Achieve Your Goals
                                                                                                                
                                                                                                                

                                                                                                                Connect with Andrew Stotz:

                                                                                                                • astotz.com
                                                                                                                • LinkedIn
                                                                                                                • Facebook
                                                                                                                • Instagram
                                                                                                                • Twitter
                                                                                                                • YouTube
                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                
                                                                                                                ]]>BIO: Gisela Hausmann graduated with a master’s degree in film & mass media from the University of Vienna. She’s one of a dying breed of adventurers – she digs in and researches topics of interest from the ground up, then tells things as she sees them.

                                                                                                                STORY: Gisela joins the podcast again, discussing her new book Winning @ Amazon. Today she shares advice on how employees can allocate their creativity in a way that’s appreciated. She also talks about why employees need to start thinking outside the box and focus on problem-solving and innovation instead of feeling sorry for themselves and staying stuck where they’re not appreciated.

                                                                                                                LEARNING: Encourage and appreciate your employees’ creativity.

                                                                                                                 

                                                                                                                “Appreciated creativity creates more creativity.”

                                                                                                                Gisela Hausmann

                                                                                                                 

                                                                                                                Guest profile

                                                                                                                Gisela Hausmann graduated with a master’s degree in film & mass media from the University of Vienna, the oldest university in the German-speaking world.

                                                                                                                She is one of a dying breed of adventurers – she digs in and researches topics of interest from the ground up, then tells things as she sees them.

                                                                                                                An author of two dozen books, her work has been featured in regional, national, and international publications, including GeekWire, Inc, Success (print magazine), Entrepreneur, and Bloomberg’s podcast ‘Decrypted.’ She is also the winner of the 2016 Sparky Award “Best Subject Line.”

                                                                                                                Born to be an adventurer, she hiked in the Himalayas and the Gobi Desert, crossed Russia on the Trans-Siberian Railway twice, and meditated in the Dalai Lama’s private room at the Potala Palace in Lhasa, Tibet.

                                                                                                                Her motto is: “Don’t wait. The time will never be just right.” – Napoleon Hill

                                                                                                                Encourage employee creativity

                                                                                                                Gisela Hausmann first appeared on the podcast in episode 539, where she narrated how Amazon implemented suggestions she’d made in her book Inside Amazon: My Story. Gisela is back with a new book Winning @ Amazon. Today she shares advice on how employees can allocate their creativity in a way that’s appreciated. She also talks about why employees need to start thinking outside the box and focus on problem-solving and innovation instead of feeling sorry for themselves and staying stuck where they’re not appreciated.

                                                                                                                According to Gisela, companies consistently ignore the input from clever, hardworking, dedicated people and—seemingly—perceive them as “irrelevant little cogwheels in a big machine.” Senior management is often threatened by subordinates who seem more innovative than them, and it’s no wonder they ignore their creative suggestions. This has led to employees choosing to keep suggestions to themselves, and this is killing most organizations, especially the big ones.

                                                                                                                Gisela advises organizations that want to encourage employee creativity to make a written plan. Define how employees who come up with ideas implemented in the company will be rewarded. Ensure that your rewards are something better than an in-house product. It should be something special that makes the employee feel appreciated. Gisela insists on the written plan because if you don’t encourage creativity in black and white, it won’t happen.

                                                                                                                You create positive energy in your business by acknowledging that you need creative ideas from your people and encouraging them. When you create positive energy, everybody wants to stay with you, and they carry this energy into the rest of the world.

                                                                                                                Parting words

                                                                                                                 

                                                                                                                “If your employees carry forward who you are, they will bring the people to you.”

                                                                                                                Gisela Hausmann

                                                                                                                 

                                                                                                                [spp-transcript]

                                                                                                                 

                                                                                                                Connect with Gisela Hausmann

                                                                                                                • LinkedIn
                                                                                                                • Twitter
                                                                                                                • Books
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s books

                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • My Worst Investment Ever
                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s online programs

                                                                                                                • Valuation Master Class
                                                                                                                • The Become a Better Investor Community
                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                • Achieve Your Goals
                                                                                                                
                                                                                                                

                                                                                                                Connect with Andrew Stotz:

                                                                                                                • astotz.com
                                                                                                                • LinkedIn
                                                                                                                • Facebook
                                                                                                                • Instagram
                                                                                                                • Twitter
                                                                                                                • YouTube
                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                
                                                                                                                ]]>4938d0b0-5337-4b64-9922-4876fd263468Thu, 01 Jun 2023 06:00:00 +070040:55falsefullConnor Steinbrook – Do Due Diligence Before Visiting a Real Estate PropertyBIO: Connor Steinbrook is the Founder of the EXP realty Wolfpack Revenue Share Organization, with more than 2,700 agents operating in all 50 states and 12 countries. The group closed almost 10,000 houses and 3.5 billion in sales in 2022.

                                                                                                                STORY: Connor came across a house in a high-priced area that was being sold for dirt cheap. It caught his attention, and he decided to buy it. It turns out the person who sold the house to Connor had killed the homeowner and stolen his identity.

                                                                                                                LEARNING: Always be careful when going into properties to meet strangers. Before you go to view a property, ask the right questions and do due diligence.

                                                                                                                 

                                                                                                                “Just because you wouldn’t do something or you wouldn’t think that this could happen doesn’t mean that people think the way you do and that they’re not setting you up.”

                                                                                                                Connor Steinbrook

                                                                                                                 

                                                                                                                Guest profile

                                                                                                                Connor Steinbrook is the Founder of the EXP realty Wolfpack Revenue Share Organization, which has more than 2,700 agents operating in all 50 states and 12 different countries. The group closed almost 10,000 houses and 3.5 billion in sales in 2022.

                                                                                                                Worst investment ever

                                                                                                                When Connor started in real estate, he got a regular appointment to check a property out. The property was an old house that looked like a single-family house but was built in a duplex-type way. The property was in a high price point area, and the owner asked for a very low amount that didn’t make sense. The owner was not there, and after waiting for a while, Connor decided to go home. After about 15 minutes on the highway, the owner called him, and since the numbers looked so good, he decided to go back.

                                                                                                                Connor found the door open, and when he went in, he couldn’t believe his eyes. It was quite a rundown house. While doing a tour of the place, he had this strong intuition that there was something off about it. But he shook off the feeling and went ahead and bought the property.

                                                                                                                About six weeks later, Connor got a phone call from a detective of a famous murder detective show in Dallas. The detective informed Connor that a resident had found a dead body at one of his properties, and he needed him for questioning.

                                                                                                                It turns out the guy Connor had bought the rundown house from was not the actual owner. The guy had murdered the homeowner, buried him in the backyard, and stolen his identity to sell the house.

                                                                                                                Lessons learned

                                                                                                                • Always be careful when going into properties to meet strangers.
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s takeaways

                                                                                                                • Things happen when you’re least prepared and least expecting it.
                                                                                                                
                                                                                                                

                                                                                                                Actionable advice

                                                                                                                Before you go to view a property, ask the right questions and do due diligence. When you go for the viewing, take another person with you.

                                                                                                                Connor’s recommendations

                                                                                                                Connor recommends several books for self-education and development:

                                                                                                                • Think and Grow Rich
                                                                                                                • Outwitting the Devil: The Secrets to Freedom and Success
                                                                                                                • As A Man Thinketh
                                                                                                                • The Richest Man in Babylon
                                                                                                                
                                                                                                                

                                                                                                                No.1 goal for the next 12 months

                                                                                                                Connor’s number one goal for the next 12 months is to get his EXP organization to 10,000 agents. He also wants to develop properties in North Dallas as a long-term investment plan. Connor also wants to get his new YouTube channel to 10,000 subscribers this year.

                                                                                                                Parting words

                                                                                                                 

                                                                                                                “Believe in yourself and never stop trying. In the end, it will all work out for you.”

                                                                                                                Connor Steinbrook

                                                                                                                 

                                                                                                                 

                                                                                                                Connect with Connor Steinbrook

                                                                                                                • LinkedIn
                                                                                                                • Facebook
                                                                                                                • Instagram
                                                                                                                • YouTube
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s books

                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • My Worst Investment Ever
                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s online programs

                                                                                                                • Valuation Master Class
                                                                                                                • The Become a Better Investor Community
                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                • Achieve Your Goals
                                                                                                                
                                                                                                                

                                                                                                                Connect with Andrew Stotz:

                                                                                                                • astotz.com
                                                                                                                • LinkedIn
                                                                                                                • Facebook
                                                                                                                • Instagram
                                                                                                                • Twitter
                                                                                                                • YouTube
                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                
                                                                                                                ]]>BIO: Connor Steinbrook is the Founder of the EXP realty Wolfpack Revenue Share Organization, with more than 2,700 agents operating in all 50 states and 12 countries. The group closed almost 10,000 houses and 3.5 billion in sales in 2022.

                                                                                                                STORY: Connor came across a house in a high-priced area that was being sold for dirt cheap. It caught his attention, and he decided to buy it. It turns out the person who sold the house to Connor had killed the homeowner and stolen his identity.

                                                                                                                LEARNING: Always be careful when going into properties to meet strangers. Before you go to view a property, ask the right questions and do due diligence.

                                                                                                                 

                                                                                                                “Just because you wouldn’t do something or you wouldn’t think that this could happen doesn’t mean that people think the way you do and that they’re not setting you up.”

                                                                                                                Connor Steinbrook

                                                                                                                 

                                                                                                                Guest profile

                                                                                                                Connor Steinbrook is the Founder of the EXP realty Wolfpack Revenue Share Organization, which has more than 2,700 agents operating in all 50 states and 12 different countries. The group closed almost 10,000 houses and 3.5 billion in sales in 2022.

                                                                                                                Worst investment ever

                                                                                                                When Connor started in real estate, he got a regular appointment to check a property out. The property was an old house that looked like a single-family house but was built in a duplex-type way. The property was in a high price point area, and the owner asked for a very low amount that didn’t make sense. The owner was not there, and after waiting for a while, Connor decided to go home. After about 15 minutes on the highway, the owner called him, and since the numbers looked so good, he decided to go back.

                                                                                                                Connor found the door open, and when he went in, he couldn’t believe his eyes. It was quite a rundown house. While doing a tour of the place, he had this strong intuition that there was something off about it. But he shook off the feeling and went ahead and bought the property.

                                                                                                                About six weeks later, Connor got a phone call from a detective of a famous murder detective show in Dallas. The detective informed Connor that a resident had found a dead body at one of his properties, and he needed him for questioning.

                                                                                                                It turns out the guy Connor had bought the rundown house from was not the actual owner. The guy had murdered the homeowner, buried him in the backyard, and stolen his identity to sell the house.

                                                                                                                Lessons learned

                                                                                                                • Always be careful when going into properties to meet strangers.
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s takeaways

                                                                                                                • Things happen when you’re least prepared and least expecting it.
                                                                                                                
                                                                                                                

                                                                                                                Actionable advice

                                                                                                                Before you go to view a property, ask the right questions and do due diligence. When you go for the viewing, take another person with you.

                                                                                                                Connor’s recommendations

                                                                                                                Connor recommends several books for self-education and development:

                                                                                                                • Think and Grow Rich
                                                                                                                • Outwitting the Devil: The Secrets to Freedom and Success
                                                                                                                • As A Man Thinketh
                                                                                                                • The Richest Man in Babylon
                                                                                                                
                                                                                                                

                                                                                                                No.1 goal for the next 12 months

                                                                                                                Connor’s number one goal for the next 12 months is to get his EXP organization to 10,000 agents. He also wants to develop properties in North Dallas as a long-term investment plan. Connor also wants to get his new YouTube channel to 10,000 subscribers this year.

                                                                                                                Parting words

                                                                                                                 

                                                                                                                “Believe in yourself and never stop trying. In the end, it will all work out for you.”

                                                                                                                Connor Steinbrook

                                                                                                                 

                                                                                                                 

                                                                                                                Connect with Connor Steinbrook

                                                                                                                • LinkedIn
                                                                                                                • Facebook
                                                                                                                • Instagram
                                                                                                                • YouTube
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s books

                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • My Worst Investment Ever
                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s online programs

                                                                                                                • Valuation Master Class
                                                                                                                • The Become a Better Investor Community
                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                • Achieve Your Goals
                                                                                                                
                                                                                                                

                                                                                                                Connect with Andrew Stotz:

                                                                                                                • astotz.com
                                                                                                                • LinkedIn
                                                                                                                • Facebook
                                                                                                                • Instagram
                                                                                                                • Twitter
                                                                                                                • YouTube
                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                
                                                                                                                ]]>bd0c9fc6-a406-4d33-bbe3-4ec406c480f6Wed, 31 May 2023 06:00:00 +070028:56falsefullZachary Resnick – Invest in People Not Just IdeasBIO: In 2013, Zachary Resnick began to make a living from playing poker cash games and investing in other poker players, providing a unique understanding of risk management that is largely shaped through leveraging volatility to outperform others in the high-risk, high-reward situations of poker.

                                                                                                                STORY: Zach invested in two founders with a brilliant idea and overlooked the fact that they were not A+ founders. He ended up riding the company down by more than 80%.

                                                                                                                LEARNING: Back people that completely blow you away. People are super important, especially at the earlier stage of the business that you invest in.

                                                                                                                 

                                                                                                                “When investing in early-stage companies, the qualities of the founders are paramount and almost inarguably the most important thing for that company.”

                                                                                                                Zachary Resnick

                                                                                                                 

                                                                                                                Guest profile

                                                                                                                In 2013 Zachary Resnick began to make a living from playing cash games and investing in other poker players, providing a unique understanding of risk management that is largely shaped through leveraging volatility to outperform others in the high-risk, high-reward situations of poker.

                                                                                                                In 2016 he made his first personal investment in Bitcoin and, by 2017, was focused on investing and trading crypto full-time.

                                                                                                                In 2018 he founded Unbounded Capital, an early-stage venture capital firm focused on payment infrastructure.

                                                                                                                He is also the founder of FlyFlat - a luxury concierge service that specializes in last-minute, heavily discounted business and first-class air travel.

                                                                                                                Worst investment ever

                                                                                                                Zach’s company invested in these two founders, who loved the company’s media content on the blockchain world. The founders were building a solution that Zach believed was A+. It would be a 100x improvement to existing solutions. There was one problem, though; the founders were not A+ founders. This became the first startup Zach’s company rode down by more than 80% since he started the investment firm.

                                                                                                                Lessons learned

                                                                                                                • Back people that completely blow you away.
                                                                                                                • People are super important, especially at the earlier stage of the business that you invest in.
                                                                                                                • Know your investing style.
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s takeaways

                                                                                                                • When investing in a startup, you’ve got to trust the founders, believe in the idea, have a ready market and ensure the startup has the muscle to execute the vision.
                                                                                                                
                                                                                                                

                                                                                                                Actionable advice

                                                                                                                If you’re in the startup investing business, especially in the early stage, meet with founders in-person before investing.

                                                                                                                Zachary’s recommendations

                                                                                                                For frequent, flexible travelers who fly business class and want to save money, Zach recommends checking out Fly Flat.

                                                                                                                To enhance deeper thinking, Zach recommends reading great books such as The Elephant in the Brain: Hidden Motives in Everyday Life and Thinking Fast and Slow.

                                                                                                                Zach recommends reading his first e-book, How A Scalable Blockchain Will Win, to learn more about how scalable and efficient blockchains will transform the internet and how data and payments operate worldwide.

                                                                                                                No.1 goal for the next 12 months

                                                                                                                Zachary’s number one goal for the next 12 months is to have more spaciousness in his life so he can spend more quality time with his amazing partner. Zach is now focused on working smarter and a little less hard.

                                                                                                                Parting words

                                                                                                                 

                                                                                                                “Thank you for having me today, Andrew. I’ve learned a lot today.”

                                                                                                                Zachary Resnick

                                                                                                                 

                                                                                                                [spp-transcript]

                                                                                                                 

                                                                                                                Connect with Zachary Resnick

                                                                                                                • LinkedIn
                                                                                                                • Twitter
                                                                                                                • Instagram
                                                                                                                • YouTube
                                                                                                                • Blog
                                                                                                                • Podcast
                                                                                                                • Book
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s books

                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • My Worst Investment Ever
                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s online programs

                                                                                                                • Valuation Master Class
                                                                                                                • The Become a Better Investor Community
                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                • Achieve Your Goals
                                                                                                                
                                                                                                                

                                                                                                                Connect with Andrew Stotz:

                                                                                                                • astotz.com
                                                                                                                • LinkedIn
                                                                                                                • Facebook
                                                                                                                • Instagram
                                                                                                                • Twitter
                                                                                                                • YouTube
                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                
                                                                                                                ]]>BIO: In 2013, Zachary Resnick began to make a living from playing poker cash games and investing in other poker players, providing a unique understanding of risk management that is largely shaped through leveraging volatility to outperform others in the high-risk, high-reward situations of poker.

                                                                                                                STORY: Zach invested in two founders with a brilliant idea and overlooked the fact that they were not A+ founders. He ended up riding the company down by more than 80%.

                                                                                                                LEARNING: Back people that completely blow you away. People are super important, especially at the earlier stage of the business that you invest in.

                                                                                                                 

                                                                                                                “When investing in early-stage companies, the qualities of the founders are paramount and almost inarguably the most important thing for that company.”

                                                                                                                Zachary Resnick

                                                                                                                 

                                                                                                                Guest profile

                                                                                                                In 2013 Zachary Resnick began to make a living from playing cash games and investing in other poker players, providing a unique understanding of risk management that is largely shaped through leveraging volatility to outperform others in the high-risk, high-reward situations of poker.

                                                                                                                In 2016 he made his first personal investment in Bitcoin and, by 2017, was focused on investing and trading crypto full-time.

                                                                                                                In 2018 he founded Unbounded Capital, an early-stage venture capital firm focused on payment infrastructure.

                                                                                                                He is also the founder of FlyFlat - a luxury concierge service that specializes in last-minute, heavily discounted business and first-class air travel.

                                                                                                                Worst investment ever

                                                                                                                Zach’s company invested in these two founders, who loved the company’s media content on the blockchain world. The founders were building a solution that Zach believed was A+. It would be a 100x improvement to existing solutions. There was one problem, though; the founders were not A+ founders. This became the first startup Zach’s company rode down by more than 80% since he started the investment firm.

                                                                                                                Lessons learned

                                                                                                                • Back people that completely blow you away.
                                                                                                                • People are super important, especially at the earlier stage of the business that you invest in.
                                                                                                                • Know your investing style.
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s takeaways

                                                                                                                • When investing in a startup, you’ve got to trust the founders, believe in the idea, have a ready market and ensure the startup has the muscle to execute the vision.
                                                                                                                
                                                                                                                

                                                                                                                Actionable advice

                                                                                                                If you’re in the startup investing business, especially in the early stage, meet with founders in-person before investing.

                                                                                                                Zachary’s recommendations

                                                                                                                For frequent, flexible travelers who fly business class and want to save money, Zach recommends checking out Fly Flat.

                                                                                                                To enhance deeper thinking, Zach recommends reading great books such as The Elephant in the Brain: Hidden Motives in Everyday Life and Thinking Fast and Slow.

                                                                                                                Zach recommends reading his first e-book, How A Scalable Blockchain Will Win, to learn more about how scalable and efficient blockchains will transform the internet and how data and payments operate worldwide.

                                                                                                                No.1 goal for the next 12 months

                                                                                                                Zachary’s number one goal for the next 12 months is to have more spaciousness in his life so he can spend more quality time with his amazing partner. Zach is now focused on working smarter and a little less hard.

                                                                                                                Parting words

                                                                                                                 

                                                                                                                “Thank you for having me today, Andrew. I’ve learned a lot today.”

                                                                                                                Zachary Resnick

                                                                                                                 

                                                                                                                [spp-transcript]

                                                                                                                 

                                                                                                                Connect with Zachary Resnick

                                                                                                                • LinkedIn
                                                                                                                • Twitter
                                                                                                                • Instagram
                                                                                                                • YouTube
                                                                                                                • Blog
                                                                                                                • Podcast
                                                                                                                • Book
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s books

                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • My Worst Investment Ever
                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s online programs

                                                                                                                • Valuation Master Class
                                                                                                                • The Become a Better Investor Community
                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                • Achieve Your Goals
                                                                                                                
                                                                                                                

                                                                                                                Connect with Andrew Stotz:

                                                                                                                • astotz.com
                                                                                                                • LinkedIn
                                                                                                                • Facebook
                                                                                                                • Instagram
                                                                                                                • Twitter
                                                                                                                • YouTube
                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                
                                                                                                                ]]>50b3ac39-5376-4efa-a4aa-a7918b3dbb29Mon, 29 May 2023 06:00:00 +070039:18falsefullChris Mamula – Take Responsibility for Your Financial SituationBIO: After poor experiences with the financial industry early in his professional life, Chris Mamula educated himself in investing and tax planning.

                                                                                                                STORY: Because Chris trusted his parents, he also blindly trusted their financial advisor. It was only after he stumbled upon better financial advice that Chris realized he’d wasted well over $100,000 in fees and another $100,000 in taxes.

                                                                                                                LEARNING: Gain financial literacy and take responsibility for your financial situation. Don’t trust financial advisors blindly.

                                                                                                                 

                                                                                                                “The less money you spend on your financial advice and financial products, the more money you’ll have to invest.”

                                                                                                                Chris Mamula

                                                                                                                 

                                                                                                                Guest profile

                                                                                                                After poor experiences with the financial industry early in his professional life, Chris Mamula educated himself in investing and tax planning.

                                                                                                                He now draws on his experiences to write and speak about wealth building, investing, financial planning, financial independence and early retirement (FIRE), and lifestyle design at the blog “Can I Retire Yet?”.

                                                                                                                Chris is also the primary author of the book ChooseFI: Your Blueprint to Financial Independence.

                                                                                                                In addition, he works one-on-one with those looking to improve their finances and use them to create a better lifestyle as an advice-only financial planner with Abundo Wealth.

                                                                                                                Worst investment ever

                                                                                                                Chris was a college graduate with a master’s degree starting to learn how to make and spend money. Like many people, he was overwhelmed and intimidated by the technical parts of finance, investing, and tax planning. The advice Chris would hear everywhere was; if you need help, seek a recommendation from someone you trust. So he went to his parents, whom he trusted more than anyone else. Chris’s parents were generally decent with their money as far as stretching a paycheck, managing a budget, and taking care of their children’s needs.

                                                                                                                Chris didn’t realize that his parents used a financial advisor because they had no idea what they were doing. And because Chris trusted them so much, he started using the same advisor and blindly trusted everything he told him—no questions asked.

                                                                                                                After a decade of this, Chris finally stumbled into some better investment advice and found out all the mistakes he had made. He realized that over a decade, he had wasted well over $100,000 in fees and another $100,000 in taxes. Because he’d started it so early in life, it could easily be a million-dollar mistake when you compound it over time.

                                                                                                                Lessons learned

                                                                                                                • So many conflicts with financial advice exist, so you can’t blindly trust anyone.
                                                                                                                • When looking for an advisor, ask as many questions as possible. What does this person know well? Is there a conflict between your interest and theirs? Are you getting the best advice?
                                                                                                                • Gain financial literacy and take responsibility for your financial situation.
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s takeaways

                                                                                                                • Investing is actually quite simple, but financial professionals often make it complicated.
                                                                                                                • Never invest in anything that somebody calls you about.
                                                                                                                • A piece of advice could work for someone but not necessarily for you.
                                                                                                                • You have the right to ask for further clarification if you don’t understand the fees you’re being charged.
                                                                                                                
                                                                                                                

                                                                                                                Actionable advice

                                                                                                                Be widely diversified and focus on the things you can control. You can’t control what market returns you’ll get or the sequence they’ll come in. But you absolutely can manage your own personal finances. So build your savings, put more money into the market, and draw down at low rates.

                                                                                                                Chris’s recommendations

                                                                                                                Chris recommends reading his book ChooseFI: Your Blueprint to Financial Independence. The book has taken many different stories and distilled them down into common principles that you can use to create your own adventure and story.

                                                                                                                He also recommends The Simple Path to Wealth: Your road map to financial independence and a rich, free life and any book by John Bogle to learn about tax efficiency, limiting your trading, locating your assets, being widely diversified, and more.

                                                                                                                No.1 goal for the next 12 months

                                                                                                                Chris’s number one goal for the next 12 months is not to have a goal. He simply wants to decompress, refine his life, and return to a normal lifestyle. Chris wants to enjoy life over the next year.

                                                                                                                Parting words

                                                                                                                 

                                                                                                                “It’s really not that hard. If you just take a little bit of time to educate yourself and find that confidence, you’re going to be very grateful in the long run.”

                                                                                                                Chris Mamula

                                                                                                                 

                                                                                                                [spp-transcript]

                                                                                                                 

                                                                                                                Connect with Chris Mamula

                                                                                                                • LinkedIn
                                                                                                                • Twitter
                                                                                                                • Blog
                                                                                                                • Website
                                                                                                                • Book
                                                                                                                
                                                                                                                

                                                                                                                Connect with Michael Howell

                                                                                                                • LinkedIn
                                                                                                                • Twitter
                                                                                                                • Website
                                                                                                                • Book
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s books

                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • My Worst Investment Ever
                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s online programs

                                                                                                                • Valuation Master Class
                                                                                                                • The Become a Better Investor Community
                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                • Achieve Your Goals
                                                                                                                
                                                                                                                

                                                                                                                Connect with Andrew Stotz:

                                                                                                                • astotz.com
                                                                                                                • LinkedIn
                                                                                                                • Facebook
                                                                                                                • Instagram
                                                                                                                • Twitter
                                                                                                                • YouTube
                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                
                                                                                                                ]]>BIO: After poor experiences with the financial industry early in his professional life, Chris Mamula educated himself in investing and tax planning.

                                                                                                                STORY: Because Chris trusted his parents, he also blindly trusted their financial advisor. It was only after he stumbled upon better financial advice that Chris realized he’d wasted well over $100,000 in fees and another $100,000 in taxes.

                                                                                                                LEARNING: Gain financial literacy and take responsibility for your financial situation. Don’t trust financial advisors blindly.

                                                                                                                 

                                                                                                                “The less money you spend on your financial advice and financial products, the more money you’ll have to invest.”

                                                                                                                Chris Mamula

                                                                                                                 

                                                                                                                Guest profile

                                                                                                                After poor experiences with the financial industry early in his professional life, Chris Mamula educated himself in investing and tax planning.

                                                                                                                He now draws on his experiences to write and speak about wealth building, investing, financial planning, financial independence and early retirement (FIRE), and lifestyle design at the blog “Can I Retire Yet?”.

                                                                                                                Chris is also the primary author of the book ChooseFI: Your Blueprint to Financial Independence.

                                                                                                                In addition, he works one-on-one with those looking to improve their finances and use them to create a better lifestyle as an advice-only financial planner with Abundo Wealth.

                                                                                                                Worst investment ever

                                                                                                                Chris was a college graduate with a master’s degree starting to learn how to make and spend money. Like many people, he was overwhelmed and intimidated by the technical parts of finance, investing, and tax planning. The advice Chris would hear everywhere was; if you need help, seek a recommendation from someone you trust. So he went to his parents, whom he trusted more than anyone else. Chris’s parents were generally decent with their money as far as stretching a paycheck, managing a budget, and taking care of their children’s needs.

                                                                                                                Chris didn’t realize that his parents used a financial advisor because they had no idea what they were doing. And because Chris trusted them so much, he started using the same advisor and blindly trusted everything he told him—no questions asked.

                                                                                                                After a decade of this, Chris finally stumbled into some better investment advice and found out all the mistakes he had made. He realized that over a decade, he had wasted well over $100,000 in fees and another $100,000 in taxes. Because he’d started it so early in life, it could easily be a million-dollar mistake when you compound it over time.

                                                                                                                Lessons learned

                                                                                                                • So many conflicts with financial advice exist, so you can’t blindly trust anyone.
                                                                                                                • When looking for an advisor, ask as many questions as possible. What does this person know well? Is there a conflict between your interest and theirs? Are you getting the best advice?
                                                                                                                • Gain financial literacy and take responsibility for your financial situation.
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s takeaways

                                                                                                                • Investing is actually quite simple, but financial professionals often make it complicated.
                                                                                                                • Never invest in anything that somebody calls you about.
                                                                                                                • A piece of advice could work for someone but not necessarily for you.
                                                                                                                • You have the right to ask for further clarification if you don’t understand the fees you’re being charged.
                                                                                                                
                                                                                                                

                                                                                                                Actionable advice

                                                                                                                Be widely diversified and focus on the things you can control. You can’t control what market returns you’ll get or the sequence they’ll come in. But you absolutely can manage your own personal finances. So build your savings, put more money into the market, and draw down at low rates.

                                                                                                                Chris’s recommendations

                                                                                                                Chris recommends reading his book ChooseFI: Your Blueprint to Financial Independence. The book has taken many different stories and distilled them down into common principles that you can use to create your own adventure and story.

                                                                                                                He also recommends The Simple Path to Wealth: Your road map to financial independence and a rich, free life and any book by John Bogle to learn about tax efficiency, limiting your trading, locating your assets, being widely diversified, and more.

                                                                                                                No.1 goal for the next 12 months

                                                                                                                Chris’s number one goal for the next 12 months is not to have a goal. He simply wants to decompress, refine his life, and return to a normal lifestyle. Chris wants to enjoy life over the next year.

                                                                                                                Parting words

                                                                                                                 

                                                                                                                “It’s really not that hard. If you just take a little bit of time to educate yourself and find that confidence, you’re going to be very grateful in the long run.”

                                                                                                                Chris Mamula

                                                                                                                 

                                                                                                                [spp-transcript]

                                                                                                                 

                                                                                                                Connect with Chris Mamula

                                                                                                                • LinkedIn
                                                                                                                • Twitter
                                                                                                                • Blog
                                                                                                                • Website
                                                                                                                • Book
                                                                                                                
                                                                                                                

                                                                                                                Connect with Michael Howell

                                                                                                                • LinkedIn
                                                                                                                • Twitter
                                                                                                                • Website
                                                                                                                • Book
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s books

                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • My Worst Investment Ever
                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s online programs

                                                                                                                • Valuation Master Class
                                                                                                                • The Become a Better Investor Community
                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                • Achieve Your Goals
                                                                                                                
                                                                                                                

                                                                                                                Connect with Andrew Stotz:

                                                                                                                • astotz.com
                                                                                                                • LinkedIn
                                                                                                                • Facebook
                                                                                                                • Instagram
                                                                                                                • Twitter
                                                                                                                • YouTube
                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                
                                                                                                                ]]>25a49abe-ef38-4841-b787-602812998328Thu, 25 May 2023 06:00:00 +070026:12falsefullMichael Howell – Liquidity Is the Main Driver of Asset MarketsBIO: Michael Howell is CEO of CrossBorder Capital, a London-based FCA-registered, independent research and investment company he founded in 1996.

                                                                                                                STORY: Michael was once in a meeting with the governor of the Bank of Thailand, who told him they would cut interest rates the following week. Even though all possible data showed this would be a wrong move, Micahel believed him. The bank didn’t lower the rates; instead, it increased them.

                                                                                                                LEARNING: Don’t listen to what people say, particularly central bankers; watch what they do. When participating in macro investing, understand where you are on the liquidity cycle and where investors are positioned.

                                                                                                                 

                                                                                                                “Don’t buy a market with a low PE because you think it’s cheap. It actually tells you a lot more about the liquidity background or about the investors’ positioning, which may be structural features of the markets.”

                                                                                                                Michael Howell

                                                                                                                 

                                                                                                                Guest profile

                                                                                                                Michael Howell is CEO of CrossBorder Capital, a London-based FCA-registered, independent research and investment company that he founded in 1996. The firm provides asset allocation and capital markets advice to institutional investors and manages US$1 billion of assets.

                                                                                                                Worst investment ever

                                                                                                                In the mid-1990s, when Michael was working at ING Barings, there was evidence of some economies beginning to overheat. Michael had a lot of discussions with central bankers, and one of those meetings in early 1995 was with the governor of the Bank of Thailand. Michael remembers the governor saying that the bank would cut interest rates. Michael assumed that the governor wanted to inform people, so it’s not a shock that interest rates will be cut.

                                                                                                                In context, that was a crazy decision to make because Thailand was already overheating. The Chinese had previously overvalued the renminbi by about 30%, and the Japanese yen was beginning to strengthen significantly.

                                                                                                                The governor wasn’t honest because the Bank of Thailand raised interest rates instead of cutting them. This taught Michael never to listen to what central bankers are saying. Instead, he now looks at the numbers and the underlying backdrop.

                                                                                                                Lessons learned

                                                                                                                • When participating in macro investing, understand where you are on the liquidity cycle and where investors are positioned.
                                                                                                                • Equity markets are best valued against inflation, not against bonds.
                                                                                                                • From a global perspective, liquidity will likely be the primary driver of asset markets.
                                                                                                                • Big currency appreciations destroy earnings, and currency devaluations boost earnings.
                                                                                                                • PE multiples work very well at the individual stock level but certainly don’t work at the macro level.
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s takeaways

                                                                                                                • Don’t listen to what people say, particularly central bankers; watch what they do.
                                                                                                                • PE multiples are not a great measure when looking at the overall macro picture.
                                                                                                                
                                                                                                                

                                                                                                                No.1 goal for the next 12 months

                                                                                                                Michael’s number one goal for the next 12 months is to get more people to understand that liquidity is the key thing going forward.

                                                                                                                Parting words

                                                                                                                 

                                                                                                                “Just watch the markets and understand what’s going on. Look at the data. Don’t read the central bankers’ lips; watch their hands.”

                                                                                                                Michael Howell

                                                                                                                 

                                                                                                                [spp-transcript]

                                                                                                                 

                                                                                                                Connect with Michael Howell

                                                                                                                • LinkedIn
                                                                                                                • Twitter
                                                                                                                • Website
                                                                                                                • Book
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s books

                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • My Worst Investment Ever
                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s online programs

                                                                                                                • Valuation Master Class
                                                                                                                • The Become a Better Investor Community
                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                • Achieve Your Goals
                                                                                                                
                                                                                                                

                                                                                                                Connect with Andrew Stotz:

                                                                                                                • astotz.com
                                                                                                                • LinkedIn
                                                                                                                • Facebook
                                                                                                                • Instagram
                                                                                                                • Twitter
                                                                                                                • YouTube
                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                
                                                                                                                

                                                                                                                Further reading mentioned

                                                                                                                • Benjamin Graham (September 2008) Security Analysis: Sixth Edition, Foreword by Warren Buffett (Security Analysis Prior Editions)
                                                                                                                
                                                                                                                ]]>BIO: Michael Howell is CEO of CrossBorder Capital, a London-based FCA-registered, independent research and investment company he founded in 1996.

                                                                                                                STORY: Michael was once in a meeting with the governor of the Bank of Thailand, who told him they would cut interest rates the following week. Even though all possible data showed this would be a wrong move, Micahel believed him. The bank didn’t lower the rates; instead, it increased them.

                                                                                                                LEARNING: Don’t listen to what people say, particularly central bankers; watch what they do. When participating in macro investing, understand where you are on the liquidity cycle and where investors are positioned.

                                                                                                                 

                                                                                                                “Don’t buy a market with a low PE because you think it’s cheap. It actually tells you a lot more about the liquidity background or about the investors’ positioning, which may be structural features of the markets.”

                                                                                                                Michael Howell

                                                                                                                 

                                                                                                                Guest profile

                                                                                                                Michael Howell is CEO of CrossBorder Capital, a London-based FCA-registered, independent research and investment company that he founded in 1996. The firm provides asset allocation and capital markets advice to institutional investors and manages US$1 billion of assets.

                                                                                                                Worst investment ever

                                                                                                                In the mid-1990s, when Michael was working at ING Barings, there was evidence of some economies beginning to overheat. Michael had a lot of discussions with central bankers, and one of those meetings in early 1995 was with the governor of the Bank of Thailand. Michael remembers the governor saying that the bank would cut interest rates. Michael assumed that the governor wanted to inform people, so it’s not a shock that interest rates will be cut.

                                                                                                                In context, that was a crazy decision to make because Thailand was already overheating. The Chinese had previously overvalued the renminbi by about 30%, and the Japanese yen was beginning to strengthen significantly.

                                                                                                                The governor wasn’t honest because the Bank of Thailand raised interest rates instead of cutting them. This taught Michael never to listen to what central bankers are saying. Instead, he now looks at the numbers and the underlying backdrop.

                                                                                                                Lessons learned

                                                                                                                • When participating in macro investing, understand where you are on the liquidity cycle and where investors are positioned.
                                                                                                                • Equity markets are best valued against inflation, not against bonds.
                                                                                                                • From a global perspective, liquidity will likely be the primary driver of asset markets.
                                                                                                                • Big currency appreciations destroy earnings, and currency devaluations boost earnings.
                                                                                                                • PE multiples work very well at the individual stock level but certainly don’t work at the macro level.
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s takeaways

                                                                                                                • Don’t listen to what people say, particularly central bankers; watch what they do.
                                                                                                                • PE multiples are not a great measure when looking at the overall macro picture.
                                                                                                                
                                                                                                                

                                                                                                                No.1 goal for the next 12 months

                                                                                                                Michael’s number one goal for the next 12 months is to get more people to understand that liquidity is the key thing going forward.

                                                                                                                Parting words

                                                                                                                 

                                                                                                                “Just watch the markets and understand what’s going on. Look at the data. Don’t read the central bankers’ lips; watch their hands.”

                                                                                                                Michael Howell

                                                                                                                 

                                                                                                                [spp-transcript]

                                                                                                                 

                                                                                                                Connect with Michael Howell

                                                                                                                • LinkedIn
                                                                                                                • Twitter
                                                                                                                • Website
                                                                                                                • Book
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s books

                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • My Worst Investment Ever
                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s online programs

                                                                                                                • Valuation Master Class
                                                                                                                • The Become a Better Investor Community
                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                • Achieve Your Goals
                                                                                                                
                                                                                                                

                                                                                                                Connect with Andrew Stotz:

                                                                                                                • astotz.com
                                                                                                                • LinkedIn
                                                                                                                • Facebook
                                                                                                                • Instagram
                                                                                                                • Twitter
                                                                                                                • YouTube
                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                
                                                                                                                

                                                                                                                Further reading mentioned

                                                                                                                • Benjamin Graham (September 2008) Security Analysis: Sixth Edition, Foreword by Warren Buffett (Security Analysis Prior Editions)
                                                                                                                
                                                                                                                ]]>b867fe69-9bb2-4105-aca8-cdbe80f83eb2Wed, 24 May 2023 06:00:00 +070044:54falsefullBrady Slack – What to Look For in a Coach or MentorBIO: Brady Slack is the owner of High Country Finance, LLC, a full-service tax and accounting firm based in Utah in the US. His purpose is to be a resource that helps everyone experience wealth while paying the fewest taxes possible.

                                                                                                                STORY: Brady came across a coaching group on Facebook that was good at marketing its coaching package. He was fascinated by the package and bought it for $50,000. While it was a good package, it wasn’t a good fit for him as it didn’t align with his business goals.

                                                                                                                LEARNING: Vet the mentor, coach, or advisor before you engage with them. Pick a mentor or a coach who embodies what you want to be. Don’t decide out of desperation or pressure.

                                                                                                                 

                                                                                                                “If you’re going to make a decision or buy something, or spend money, go to bed first. If you still feel the same in the morning, do it. But if anything’s changed, rethink it.”

                                                                                                                Brady Slack

                                                                                                                 

                                                                                                                Guest profile

                                                                                                                Brady Slack is the owner of High Country Finance, LLC, a full-service tax and accounting firm based in Utah in the US. His purpose is to be a resource that helps everyone experience wealth, all while paying the fewest taxes possible.

                                                                                                                Worst investment ever

                                                                                                                When Brady turned 23, he quit his job at an accounting firm and started a business. He didn’t have the expertise or the experience to create an accounting firm, but he decided to do it anyway. A close friend, a successful businessman, told Brady that the quickest way to learn and grow is to hire someone. So Brady started seeking out mentors, coaches, and development opportunities.

                                                                                                                Brady connected with a group on social media that asked him to speak at their event. He felt this would be an excellent way to reach more people and boost his business. He later found out the group had an offer attached to the back end of the speaking engagement, including some coaching, marketing and advertising, and websites. This was an even better deal for Brady. This all came as a coaching package that cost over $50,000. Brady purchased it.

                                                                                                                While the coaching program was great, Brady soon realized that it didn’t necessarily align with where he wanted to go with his business. It just wasn’t the right fit for him.

                                                                                                                Lessons learned

                                                                                                                • If you need more financial resources to pay for an opportunity, wait until you have it.
                                                                                                                • Vet the mentor, coach, or advisor before you engage with them.
                                                                                                                • Before you pick a mentor or coach, define your goals, your intentions, and what you want your outcome to be.
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s takeaways

                                                                                                                • Pick a mentor or a coach who embodies what you want to be.
                                                                                                                • You may get less value from a generalist, so go for a specialist in your interests.
                                                                                                                • Avoid getting sucked into the flashy coaches on your Facebook feed because those guys are great at selling but not necessarily great at coaching.
                                                                                                                • Don’t decide out of desperation or pressure.
                                                                                                                
                                                                                                                

                                                                                                                Actionable advice

                                                                                                                Take time to define what you want out of your venture clearly, and then look for someone who has already done that and reach out to them to mentor or coach you.

                                                                                                                Brady’s recommendations

                                                                                                                Brady recommends getting as much information and education as possible from the numerous free online resources. Further, vet someone who can accelerate the growth within your venture and ask them to mentor you.

                                                                                                                No.1 goal for the next 12 months

                                                                                                                Brady’s number one goal for the next 12 months is to get his newly launched software to a point where it pays all its capital back and is profitable.

                                                                                                                Parting words

                                                                                                                 

                                                                                                                “Just keep going. The road to entrepreneurship or becoming successful is 75% hard work, grit, and determination. The other 25% is just a little bit of luck.”

                                                                                                                Brady Slack

                                                                                                                 

                                                                                                                [spp-transcript]

                                                                                                                 

                                                                                                                Connect with Brady Slack

                                                                                                                • LinkedIn
                                                                                                                • Twitter
                                                                                                                • Instagram
                                                                                                                • YouTube
                                                                                                                • Website
                                                                                                                • Podcast
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s books

                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • My Worst Investment Ever
                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s online programs

                                                                                                                • Valuation Master Class
                                                                                                                • The Become a Better Investor Community
                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                • Achieve Your Goals
                                                                                                                
                                                                                                                

                                                                                                                Connect with Andrew Stotz:

                                                                                                                • astotz.com
                                                                                                                • LinkedIn
                                                                                                                • Facebook
                                                                                                                • Instagram
                                                                                                                • Twitter
                                                                                                                • YouTube
                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                
                                                                                                                ]]>BIO: Brady Slack is the owner of High Country Finance, LLC, a full-service tax and accounting firm based in Utah in the US. His purpose is to be a resource that helps everyone experience wealth while paying the fewest taxes possible.

                                                                                                                STORY: Brady came across a coaching group on Facebook that was good at marketing its coaching package. He was fascinated by the package and bought it for $50,000. While it was a good package, it wasn’t a good fit for him as it didn’t align with his business goals.

                                                                                                                LEARNING: Vet the mentor, coach, or advisor before you engage with them. Pick a mentor or a coach who embodies what you want to be. Don’t decide out of desperation or pressure.

                                                                                                                 

                                                                                                                “If you’re going to make a decision or buy something, or spend money, go to bed first. If you still feel the same in the morning, do it. But if anything’s changed, rethink it.”

                                                                                                                Brady Slack

                                                                                                                 

                                                                                                                Guest profile

                                                                                                                Brady Slack is the owner of High Country Finance, LLC, a full-service tax and accounting firm based in Utah in the US. His purpose is to be a resource that helps everyone experience wealth, all while paying the fewest taxes possible.

                                                                                                                Worst investment ever

                                                                                                                When Brady turned 23, he quit his job at an accounting firm and started a business. He didn’t have the expertise or the experience to create an accounting firm, but he decided to do it anyway. A close friend, a successful businessman, told Brady that the quickest way to learn and grow is to hire someone. So Brady started seeking out mentors, coaches, and development opportunities.

                                                                                                                Brady connected with a group on social media that asked him to speak at their event. He felt this would be an excellent way to reach more people and boost his business. He later found out the group had an offer attached to the back end of the speaking engagement, including some coaching, marketing and advertising, and websites. This was an even better deal for Brady. This all came as a coaching package that cost over $50,000. Brady purchased it.

                                                                                                                While the coaching program was great, Brady soon realized that it didn’t necessarily align with where he wanted to go with his business. It just wasn’t the right fit for him.

                                                                                                                Lessons learned

                                                                                                                • If you need more financial resources to pay for an opportunity, wait until you have it.
                                                                                                                • Vet the mentor, coach, or advisor before you engage with them.
                                                                                                                • Before you pick a mentor or coach, define your goals, your intentions, and what you want your outcome to be.
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s takeaways

                                                                                                                • Pick a mentor or a coach who embodies what you want to be.
                                                                                                                • You may get less value from a generalist, so go for a specialist in your interests.
                                                                                                                • Avoid getting sucked into the flashy coaches on your Facebook feed because those guys are great at selling but not necessarily great at coaching.
                                                                                                                • Don’t decide out of desperation or pressure.
                                                                                                                
                                                                                                                

                                                                                                                Actionable advice

                                                                                                                Take time to define what you want out of your venture clearly, and then look for someone who has already done that and reach out to them to mentor or coach you.

                                                                                                                Brady’s recommendations

                                                                                                                Brady recommends getting as much information and education as possible from the numerous free online resources. Further, vet someone who can accelerate the growth within your venture and ask them to mentor you.

                                                                                                                No.1 goal for the next 12 months

                                                                                                                Brady’s number one goal for the next 12 months is to get his newly launched software to a point where it pays all its capital back and is profitable.

                                                                                                                Parting words

                                                                                                                 

                                                                                                                “Just keep going. The road to entrepreneurship or becoming successful is 75% hard work, grit, and determination. The other 25% is just a little bit of luck.”

                                                                                                                Brady Slack

                                                                                                                 

                                                                                                                [spp-transcript]

                                                                                                                 

                                                                                                                Connect with Brady Slack

                                                                                                                • LinkedIn
                                                                                                                • Twitter
                                                                                                                • Instagram
                                                                                                                • YouTube
                                                                                                                • Website
                                                                                                                • Podcast
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s books

                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • My Worst Investment Ever
                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s online programs

                                                                                                                • Valuation Master Class
                                                                                                                • The Become a Better Investor Community
                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                • Achieve Your Goals
                                                                                                                
                                                                                                                

                                                                                                                Connect with Andrew Stotz:

                                                                                                                • astotz.com
                                                                                                                • LinkedIn
                                                                                                                • Facebook
                                                                                                                • Instagram
                                                                                                                • Twitter
                                                                                                                • YouTube
                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                
                                                                                                                ]]>7584225f-52d7-4ccb-95cf-09d77efdda5dMon, 22 May 2023 06:00:00 +070031:22falsefullRichard Lawrence – Avoid the Stock That’s the Hype of the DayBIO: Richard H. Lawrence, Jr., is the Founder and Executive Chairman of Overlook Investments Group, an independent fund management company established in Hong Kong in 1991.

                                                                                                                STORY: Richard invested heavily in a successful Korean company that brought him great returns until the founder died. The son took over and brought the stock to its demise.

                                                                                                                LEARNING: If it’s not working, get out. Invest in a company with no or minimal debt. Operating return is the purest way to measure profitability.

                                                                                                                 

                                                                                                                “I’m a big believer in modest self-financed growth.”

                                                                                                                Richard Lawrence

                                                                                                                 

                                                                                                                Guest profile

                                                                                                                Richard H. Lawrence, Jr., is the Founder and Executive Chairman of Overlook Investments Group, an independent fund management company established in Hong Kong in 1991. Overlook invests US$6 billion in a concentrated portfolio of public equities throughout Asia, excluding Japan.

                                                                                                                Richard and his wife, Dee, have founded several non-profit organizations; he’s a philanthropist who is devoted to climate change. He has two grown kids and lives in San Francisco, California.

                                                                                                                Worst investment ever

                                                                                                                In 1992, Richard discovered that stocks in Korea were incredibly cheap. He owned everything at 2-4x earnings. Richard owned a hair dye company and all kinds of oddball companies. Within that mix, there was one company that stood out. Korea, at the time, had massive debt. But this one company didn’t have any debt, so Richard was immediately attracted to it.

                                                                                                                Richard purchased shares in the company initially in 1992. At the time, the company was the largest synthetic fiber producer in South Korea, making spandex. It was a formidable company going from strength to strength. It became among Richard’s most significant holdings, the strongest of this cohort of Korean companies he owned.

                                                                                                                The company was founded by one of the greatest titans of the Asian textile industry. The founder was Korean and a larger-than-life figure in a manner unlike any other business leader in Korea in the lead-up to the Asian financial crisis when Korea went burst. He was a nonconformist in a culture that admired conformity. That was one of the reasons his company had no debt. He had the confidence and independence of someone who knew how to run a company for cash flow. Just as he disliked debt, he also disliked paying taxes. He was the most aggressive executive Richard had ever encountered in Asia or anywhere else. In one instance, he built a US$400 million facility, depreciated it over two and a half years, then revalued it and depreciated it a second time. By doing so, the founder minimized reported profits to minimize taxes and used cash savings to avoid debt. Richard liked this business model, so he invested heavily in it.

                                                                                                                The company did very well in the start-up years until the founder died. His son took over, but he struggled to fit into his father’s giant shoes. Richard thought he could help him be successful and worked on it from 1997 to 2000 during and after the Asian financial crisis. Richard gave him all the advice he could, but he was ignored. By 2000, with no concrete action taken by management, and no upward movement in the sock, Richard’s patience wore thin. Then the new leader crossed a red line and blatantly undertook an unfair related party transaction that effectively bailed out an insurance company owned by the family with cash from the spandex company.

                                                                                                                Richard, at that time, requested a reversal of the acquisition. He asked management to initiate paying cash dividends, execute a series of share splits, establish an IR department, and appoint additional directors that are at least partially independent. The largest internationally managed Korean fund cast the deciding vote against Richard ending the investment in a huge loss.

                                                                                                                Lessons learned

                                                                                                                • Being an activist publicly doesn’t help.
                                                                                                                • If it’s not working, get out.
                                                                                                                • Invest in a company with no or minimal debt.
                                                                                                                • Avoid the stock that’s the hype of the day.
                                                                                                                • Operating return is the purest way to measure profitability and should be high. The higher it is, the better it is.
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s takeaways

                                                                                                                • An activist type of shareholder has its limits.
                                                                                                                • There’s value in owning a diversified portfolio of stocks over a long period.
                                                                                                                
                                                                                                                

                                                                                                                Actionable advice

                                                                                                                Go for companies with modest growth, don’t look for something off the charts. Build a portfolio of roughly 12 companies that can deliver a good operating return and rebalance it regularly.

                                                                                                                Richard’s recommendations

                                                                                                                Richard recommends reading a lot of investing books. You can start with Buffett’s letters and then go to John Train’s books as you grow your library.

                                                                                                                Parting words

                                                                                                                 

                                                                                                                “Beginners in this industry can learn from the tough lessons that we all went through.”

                                                                                                                Richard Lawrence

                                                                                                                 

                                                                                                                [spp-transcript]

                                                                                                                 

                                                                                                                Connect with Richard Lawrence

                                                                                                                • LinkedIn
                                                                                                                • Website
                                                                                                                • Books
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s books

                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • My Worst Investment Ever
                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s online programs

                                                                                                                • Valuation Master Class
                                                                                                                • The Become a Better Investor Community
                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                • Achieve Your Goals
                                                                                                                
                                                                                                                

                                                                                                                Connect with Andrew Stotz:

                                                                                                                • astotz.com
                                                                                                                • LinkedIn
                                                                                                                • Facebook
                                                                                                                • Instagram
                                                                                                                • Twitter
                                                                                                                • YouTube
                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                
                                                                                                                ]]>BIO: Richard H. Lawrence, Jr., is the Founder and Executive Chairman of Overlook Investments Group, an independent fund management company established in Hong Kong in 1991.

                                                                                                                STORY: Richard invested heavily in a successful Korean company that brought him great returns until the founder died. The son took over and brought the stock to its demise.

                                                                                                                LEARNING: If it’s not working, get out. Invest in a company with no or minimal debt. Operating return is the purest way to measure profitability.

                                                                                                                 

                                                                                                                “I’m a big believer in modest self-financed growth.”

                                                                                                                Richard Lawrence

                                                                                                                 

                                                                                                                Guest profile

                                                                                                                Richard H. Lawrence, Jr., is the Founder and Executive Chairman of Overlook Investments Group, an independent fund management company established in Hong Kong in 1991. Overlook invests US$6 billion in a concentrated portfolio of public equities throughout Asia, excluding Japan.

                                                                                                                Richard and his wife, Dee, have founded several non-profit organizations; he’s a philanthropist who is devoted to climate change. He has two grown kids and lives in San Francisco, California.

                                                                                                                Worst investment ever

                                                                                                                In 1992, Richard discovered that stocks in Korea were incredibly cheap. He owned everything at 2-4x earnings. Richard owned a hair dye company and all kinds of oddball companies. Within that mix, there was one company that stood out. Korea, at the time, had massive debt. But this one company didn’t have any debt, so Richard was immediately attracted to it.

                                                                                                                Richard purchased shares in the company initially in 1992. At the time, the company was the largest synthetic fiber producer in South Korea, making spandex. It was a formidable company going from strength to strength. It became among Richard’s most significant holdings, the strongest of this cohort of Korean companies he owned.

                                                                                                                The company was founded by one of the greatest titans of the Asian textile industry. The founder was Korean and a larger-than-life figure in a manner unlike any other business leader in Korea in the lead-up to the Asian financial crisis when Korea went burst. He was a nonconformist in a culture that admired conformity. That was one of the reasons his company had no debt. He had the confidence and independence of someone who knew how to run a company for cash flow. Just as he disliked debt, he also disliked paying taxes. He was the most aggressive executive Richard had ever encountered in Asia or anywhere else. In one instance, he built a US$400 million facility, depreciated it over two and a half years, then revalued it and depreciated it a second time. By doing so, the founder minimized reported profits to minimize taxes and used cash savings to avoid debt. Richard liked this business model, so he invested heavily in it.

                                                                                                                The company did very well in the start-up years until the founder died. His son took over, but he struggled to fit into his father’s giant shoes. Richard thought he could help him be successful and worked on it from 1997 to 2000 during and after the Asian financial crisis. Richard gave him all the advice he could, but he was ignored. By 2000, with no concrete action taken by management, and no upward movement in the sock, Richard’s patience wore thin. Then the new leader crossed a red line and blatantly undertook an unfair related party transaction that effectively bailed out an insurance company owned by the family with cash from the spandex company.

                                                                                                                Richard, at that time, requested a reversal of the acquisition. He asked management to initiate paying cash dividends, execute a series of share splits, establish an IR department, and appoint additional directors that are at least partially independent. The largest internationally managed Korean fund cast the deciding vote against Richard ending the investment in a huge loss.

                                                                                                                Lessons learned

                                                                                                                • Being an activist publicly doesn’t help.
                                                                                                                • If it’s not working, get out.
                                                                                                                • Invest in a company with no or minimal debt.
                                                                                                                • Avoid the stock that’s the hype of the day.
                                                                                                                • Operating return is the purest way to measure profitability and should be high. The higher it is, the better it is.
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s takeaways

                                                                                                                • An activist type of shareholder has its limits.
                                                                                                                • There’s value in owning a diversified portfolio of stocks over a long period.
                                                                                                                
                                                                                                                

                                                                                                                Actionable advice

                                                                                                                Go for companies with modest growth, don’t look for something off the charts. Build a portfolio of roughly 12 companies that can deliver a good operating return and rebalance it regularly.

                                                                                                                Richard’s recommendations

                                                                                                                Richard recommends reading a lot of investing books. You can start with Buffett’s letters and then go to John Train’s books as you grow your library.

                                                                                                                Parting words

                                                                                                                 

                                                                                                                “Beginners in this industry can learn from the tough lessons that we all went through.”

                                                                                                                Richard Lawrence

                                                                                                                 

                                                                                                                [spp-transcript]

                                                                                                                 

                                                                                                                Connect with Richard Lawrence

                                                                                                                • LinkedIn
                                                                                                                • Website
                                                                                                                • Books
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s books

                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • My Worst Investment Ever
                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s online programs

                                                                                                                • Valuation Master Class
                                                                                                                • The Become a Better Investor Community
                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                • Achieve Your Goals
                                                                                                                
                                                                                                                

                                                                                                                Connect with Andrew Stotz:

                                                                                                                • astotz.com
                                                                                                                • LinkedIn
                                                                                                                • Facebook
                                                                                                                • Instagram
                                                                                                                • Twitter
                                                                                                                • YouTube
                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                
                                                                                                                ]]>3a0fb2f7-2eaa-4ec2-be75-7e660e199adaThu, 18 May 2023 06:00:00 +070038:46falsefullVineer Bhansali – You Create Real Value by Being DifferentBIO: Vineer Bhansali is the CIO of LongTail Alpha. The firm was founded in 2015 to help provide risk mitigation strategies.

                                                                                                                STORY: In early 1993, most investors held a significant long position on the Eurodollar futures contract, betting that interest rates would go down. Vineer decided to follow the herd. The Fed increased rates, and Vineer kept buying until he lost his investment.

                                                                                                                LEARNING: Don’t follow the herd blindly. Success in the markets is all about timing. Have an investment framework within which you operate.

                                                                                                                 

                                                                                                                “You’ve got to be very humble and disciplined with your loss thresholds and risk limits.”

                                                                                                                Vineer Bhansali

                                                                                                                 

                                                                                                                Guest profile

                                                                                                                Vineer Bhansali is the CIO of LongTail Alpha. The firm was founded in 2015 to help provide risk mitigation strategies. Vineer was a partner at PIMCO and started their first hedge fund and also started and managed their quantitative investment portfolio teams from 2000-2015.

                                                                                                                He has a Ph.D. in Theoretical Physics from Harvard University and has written six books on finance. He has also run over 60 ultramarathons. He is also an Airline Transport Pilot rated to fly jets and helicopters and has over 4,500 hours of flight time.

                                                                                                                Worst investment ever

                                                                                                                Vineer started at Citibank in late 1992, just after the 1987 big stock market crash. He was participating in a bull market created by an extremely easy central bank policy. At that time, probably the easiest trade to do was just to buy anything like fixed income or stocks, and it would go up.

                                                                                                                Veneer was at some dinner in late 1993, and everybody in that room held a pretty significant long position on the Eurodollar futures contract, betting that interest rates would go down. That should have been a signal that something was amiss. But as a young trader, seeing everything was going up, Veneer also got long Eurodollar futures.

                                                                                                                Then as a surprise, the Fed got a little worried in February of 1994 and raised interest rates by 25 basis points. The Treasury market started to fall, and Vineer thought it was a good time to buy, so he bought some bond futures contracts. The interest was raised again in March, and the market sank a little bit more. He kept buying more, hoping the rates would soon go down again. Eventually, his trades were blown over, and he lost his investment.

                                                                                                                Lessons learned

                                                                                                                • Having an original idea is always good because you create value by being different.
                                                                                                                • Don’t follow a herd blindly.
                                                                                                                • Success in the markets is all about timing.
                                                                                                                • Have an investment framework within which you operate.
                                                                                                                • The markets are very demanding, and to survive, you need to take care of everything about yourself; your mind, your body, and your health.
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s takeaways

                                                                                                                • The market is a predator.
                                                                                                                • Original ideas create value.
                                                                                                                • Markets are a human construct, and you never know which way they can go.
                                                                                                                • Don’t get too hooked on your creative idea because it may not be time right for it.
                                                                                                                • Have an investment framework and follow it.
                                                                                                                
                                                                                                                

                                                                                                                Vineer’s recommendations

                                                                                                                There’s a lot of stuff that’s on Vineer’s website that can help with risk management. He also recommends reading The Feeling of Risk: New Perspectives on Risk Perception. Veneer highly advises people at this stage of the game to abandon some of the preconceptions about how stock markets or bond markets work and just go back and do some honest, independent research on what risk management means for themselves as an individual.

                                                                                                                No.1 goal for the next 12 months

                                                                                                                Vineer’s number one goal for the next 12 months is to stay healthy. For his investors and portfolios, he wants to be very disciplined and positioned on the right side so he can deliver a stellar performance that matches the kind of strategies he has.

                                                                                                                Parting words

                                                                                                                 

                                                                                                                “Take care of yourselves, stay healthy, and be passionate about what you do.”

                                                                                                                Vineer Bhansali

                                                                                                                 

                                                                                                                [spp-transcript]

                                                                                                                 

                                                                                                                Connect with Vineer Bhansali

                                                                                                                • LinkedIn
                                                                                                                • Twitter
                                                                                                                • Website
                                                                                                                • Books
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s books

                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • My Worst Investment Ever
                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s online programs

                                                                                                                • Valuation Master Class
                                                                                                                • The Become a Better Investor Community
                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                • Achieve Your Goals
                                                                                                                
                                                                                                                

                                                                                                                Connect with Andrew Stotz:

                                                                                                                • astotz.com
                                                                                                                • LinkedIn
                                                                                                                • Facebook
                                                                                                                • Instagram
                                                                                                                • Twitter
                                                                                                                • YouTube
                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                
                                                                                                                ]]>BIO: Vineer Bhansali is the CIO of LongTail Alpha. The firm was founded in 2015 to help provide risk mitigation strategies.

                                                                                                                STORY: In early 1993, most investors held a significant long position on the Eurodollar futures contract, betting that interest rates would go down. Vineer decided to follow the herd. The Fed increased rates, and Vineer kept buying until he lost his investment.

                                                                                                                LEARNING: Don’t follow the herd blindly. Success in the markets is all about timing. Have an investment framework within which you operate.

                                                                                                                 

                                                                                                                “You’ve got to be very humble and disciplined with your loss thresholds and risk limits.”

                                                                                                                Vineer Bhansali

                                                                                                                 

                                                                                                                Guest profile

                                                                                                                Vineer Bhansali is the CIO of LongTail Alpha. The firm was founded in 2015 to help provide risk mitigation strategies. Vineer was a partner at PIMCO and started their first hedge fund and also started and managed their quantitative investment portfolio teams from 2000-2015.

                                                                                                                He has a Ph.D. in Theoretical Physics from Harvard University and has written six books on finance. He has also run over 60 ultramarathons. He is also an Airline Transport Pilot rated to fly jets and helicopters and has over 4,500 hours of flight time.

                                                                                                                Worst investment ever

                                                                                                                Vineer started at Citibank in late 1992, just after the 1987 big stock market crash. He was participating in a bull market created by an extremely easy central bank policy. At that time, probably the easiest trade to do was just to buy anything like fixed income or stocks, and it would go up.

                                                                                                                Veneer was at some dinner in late 1993, and everybody in that room held a pretty significant long position on the Eurodollar futures contract, betting that interest rates would go down. That should have been a signal that something was amiss. But as a young trader, seeing everything was going up, Veneer also got long Eurodollar futures.

                                                                                                                Then as a surprise, the Fed got a little worried in February of 1994 and raised interest rates by 25 basis points. The Treasury market started to fall, and Vineer thought it was a good time to buy, so he bought some bond futures contracts. The interest was raised again in March, and the market sank a little bit more. He kept buying more, hoping the rates would soon go down again. Eventually, his trades were blown over, and he lost his investment.

                                                                                                                Lessons learned

                                                                                                                • Having an original idea is always good because you create value by being different.
                                                                                                                • Don’t follow a herd blindly.
                                                                                                                • Success in the markets is all about timing.
                                                                                                                • Have an investment framework within which you operate.
                                                                                                                • The markets are very demanding, and to survive, you need to take care of everything about yourself; your mind, your body, and your health.
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s takeaways

                                                                                                                • The market is a predator.
                                                                                                                • Original ideas create value.
                                                                                                                • Markets are a human construct, and you never know which way they can go.
                                                                                                                • Don’t get too hooked on your creative idea because it may not be time right for it.
                                                                                                                • Have an investment framework and follow it.
                                                                                                                
                                                                                                                

                                                                                                                Vineer’s recommendations

                                                                                                                There’s a lot of stuff that’s on Vineer’s website that can help with risk management. He also recommends reading The Feeling of Risk: New Perspectives on Risk Perception. Veneer highly advises people at this stage of the game to abandon some of the preconceptions about how stock markets or bond markets work and just go back and do some honest, independent research on what risk management means for themselves as an individual.

                                                                                                                No.1 goal for the next 12 months

                                                                                                                Vineer’s number one goal for the next 12 months is to stay healthy. For his investors and portfolios, he wants to be very disciplined and positioned on the right side so he can deliver a stellar performance that matches the kind of strategies he has.

                                                                                                                Parting words

                                                                                                                 

                                                                                                                “Take care of yourselves, stay healthy, and be passionate about what you do.”

                                                                                                                Vineer Bhansali

                                                                                                                 

                                                                                                                [spp-transcript]

                                                                                                                 

                                                                                                                Connect with Vineer Bhansali

                                                                                                                • LinkedIn
                                                                                                                • Twitter
                                                                                                                • Website
                                                                                                                • Books
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s books

                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • My Worst Investment Ever
                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s online programs

                                                                                                                • Valuation Master Class
                                                                                                                • The Become a Better Investor Community
                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                • Achieve Your Goals
                                                                                                                
                                                                                                                

                                                                                                                Connect with Andrew Stotz:

                                                                                                                • astotz.com
                                                                                                                • LinkedIn
                                                                                                                • Facebook
                                                                                                                • Instagram
                                                                                                                • Twitter
                                                                                                                • YouTube
                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                
                                                                                                                ]]>e018d07f-8743-4155-816c-0218692a41bfWed, 17 May 2023 06:00:00 +070036:25falsefullVineer Bhansali is the CIO of LongTail Alpha. The firm was founded in 2015 to help provide risk mitigation strategies.Brenden Kumarasamy – Follow the Data, Not Your EmotionsBIO: Brenden Kumarasamy is the founder of MasterTalk; he coaches ambitious executives & entrepreneurs to become the top 1% of communicators in their industry.

                                                                                                                STORY: Brenden decided to promote his YouTube channel by sending 500 cold emails per day to university professors. After sending 2,000 emails, he received very negative responses. Instead of reviewing his strategy, he sent more emails for three months and got nothing out of it.

                                                                                                                LEARNING: Follow the data and remove emotion as much as possible when making decisions. Make sure your marketing content offers undeniable value.

                                                                                                                 

                                                                                                                “If you want to be in the top 1% of any category, you need to behave in a way that 99% of people aren’t willing to.”

                                                                                                                Brenden Kumarasamy

                                                                                                                 

                                                                                                                Guest profile

                                                                                                                Brenden Kumarasamy is the founder of MasterTalk; he coaches ambitious executives & entrepreneurs to become the top 1% of communicators in their industry. He also has a popular YouTube channel called MasterTalk, with the goal of providing free access to communication tools for everyone in the world.

                                                                                                                Worst investment ever

                                                                                                                When Brenden started MasterTalk, he had this brilliant idea to send 50,000 cold emails to university professors in Canada and the US. His thought was pretty strategic. Even if 10% or even 1% of the recipients shared his videos with their college students every year, Brenden’s distribution would be unlimited, and his YouTube channel would explode in popularity.

                                                                                                                Brenden didn’t know how automated email campaigns worked, so he’d manually send 500 emails each day. He would open universities’ websites, pull up their faculties, find their emails, and start sending emails. About 2,000 emails into it—about a week into it—he started getting negative responses from the university professors. Brenden got so much hatred; it was insane.

                                                                                                                Despite the hate and realizing his strategy wasn’t working, Brenden didn’t stop after 2,000 emails. Being the 22-year-old knucklehead he was then, he spent the rest of that summer sending 500 emails daily for the next three months. After all that dedication, Brenden got just two positive responses.

                                                                                                                Lessons learned

                                                                                                                • Follow the data and remove emotion as much as possible when making decisions.
                                                                                                                • There’s no silver bullet to entrepreneurship, just hundreds of lead bullets. So don’t push just one primary strategy, have hundreds of little different strategies.
                                                                                                                • When something starts working for you, instead of guessing why it’s working, ask your customers. You’ll get to see what’s working, and through that, you’ll get the results you’re looking for.
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s takeaways

                                                                                                                • Try A/B testing across many different things to determine where you’re making a breakthrough.
                                                                                                                • When you send any marketing content, make sure it has some benefit to the recipient.
                                                                                                                • Be relentless when you’ve got the right target, and follow up without giving up.
                                                                                                                
                                                                                                                

                                                                                                                Brenden’s recommendations

                                                                                                                Brenden recommends subscribing to his YouTube channel to access hundreds of free videos on how to speak. He also does free live communication training on Zoom every two weeks. If you want to join that, go to Rockstarcommunicator.com and register for the next one.

                                                                                                                No.1 goal for the next 12 months

                                                                                                                Brenden’s number one goal for the next 12 months is to scale his business to another level to create more impact for everyone around him.

                                                                                                                Parting words

                                                                                                                 

                                                                                                                “Realize that the relationship successful people have with failure is very different than the one unsuccessful people have with failure.”

                                                                                                                Brenden Kumarasamy

                                                                                                                 

                                                                                                                [spp-transcript]

                                                                                                                 

                                                                                                                Connect with Julian Klymochko

                                                                                                                • LinkedIn
                                                                                                                • Instagram
                                                                                                                • YouTube
                                                                                                                • Website
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s books

                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • My Worst Investment Ever
                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s online programs

                                                                                                                • Valuation Master Class
                                                                                                                • The Become a Better Investor Community
                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                • Achieve Your Goals
                                                                                                                
                                                                                                                

                                                                                                                Connect with Andrew Stotz:

                                                                                                                • astotz.com
                                                                                                                • LinkedIn
                                                                                                                • Facebook
                                                                                                                • Instagram
                                                                                                                • Twitter
                                                                                                                • YouTube
                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                
                                                                                                                ]]>BIO: Brenden Kumarasamy is the founder of MasterTalk; he coaches ambitious executives & entrepreneurs to become the top 1% of communicators in their industry.

                                                                                                                STORY: Brenden decided to promote his YouTube channel by sending 500 cold emails per day to university professors. After sending 2,000 emails, he received very negative responses. Instead of reviewing his strategy, he sent more emails for three months and got nothing out of it.

                                                                                                                LEARNING: Follow the data and remove emotion as much as possible when making decisions. Make sure your marketing content offers undeniable value.

                                                                                                                 

                                                                                                                “If you want to be in the top 1% of any category, you need to behave in a way that 99% of people aren’t willing to.”

                                                                                                                Brenden Kumarasamy

                                                                                                                 

                                                                                                                Guest profile

                                                                                                                Brenden Kumarasamy is the founder of MasterTalk; he coaches ambitious executives & entrepreneurs to become the top 1% of communicators in their industry. He also has a popular YouTube channel called MasterTalk, with the goal of providing free access to communication tools for everyone in the world.

                                                                                                                Worst investment ever

                                                                                                                When Brenden started MasterTalk, he had this brilliant idea to send 50,000 cold emails to university professors in Canada and the US. His thought was pretty strategic. Even if 10% or even 1% of the recipients shared his videos with their college students every year, Brenden’s distribution would be unlimited, and his YouTube channel would explode in popularity.

                                                                                                                Brenden didn’t know how automated email campaigns worked, so he’d manually send 500 emails each day. He would open universities’ websites, pull up their faculties, find their emails, and start sending emails. About 2,000 emails into it—about a week into it—he started getting negative responses from the university professors. Brenden got so much hatred; it was insane.

                                                                                                                Despite the hate and realizing his strategy wasn’t working, Brenden didn’t stop after 2,000 emails. Being the 22-year-old knucklehead he was then, he spent the rest of that summer sending 500 emails daily for the next three months. After all that dedication, Brenden got just two positive responses.

                                                                                                                Lessons learned

                                                                                                                • Follow the data and remove emotion as much as possible when making decisions.
                                                                                                                • There’s no silver bullet to entrepreneurship, just hundreds of lead bullets. So don’t push just one primary strategy, have hundreds of little different strategies.
                                                                                                                • When something starts working for you, instead of guessing why it’s working, ask your customers. You’ll get to see what’s working, and through that, you’ll get the results you’re looking for.
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s takeaways

                                                                                                                • Try A/B testing across many different things to determine where you’re making a breakthrough.
                                                                                                                • When you send any marketing content, make sure it has some benefit to the recipient.
                                                                                                                • Be relentless when you’ve got the right target, and follow up without giving up.
                                                                                                                
                                                                                                                

                                                                                                                Brenden’s recommendations

                                                                                                                Brenden recommends subscribing to his YouTube channel to access hundreds of free videos on how to speak. He also does free live communication training on Zoom every two weeks. If you want to join that, go to Rockstarcommunicator.com and register for the next one.

                                                                                                                No.1 goal for the next 12 months

                                                                                                                Brenden’s number one goal for the next 12 months is to scale his business to another level to create more impact for everyone around him.

                                                                                                                Parting words

                                                                                                                 

                                                                                                                “Realize that the relationship successful people have with failure is very different than the one unsuccessful people have with failure.”

                                                                                                                Brenden Kumarasamy

                                                                                                                 

                                                                                                                [spp-transcript]

                                                                                                                 

                                                                                                                Connect with Julian Klymochko

                                                                                                                • LinkedIn
                                                                                                                • Instagram
                                                                                                                • YouTube
                                                                                                                • Website
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s books

                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • My Worst Investment Ever
                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s online programs

                                                                                                                • Valuation Master Class
                                                                                                                • The Become a Better Investor Community
                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                • Achieve Your Goals
                                                                                                                
                                                                                                                

                                                                                                                Connect with Andrew Stotz:

                                                                                                                • astotz.com
                                                                                                                • LinkedIn
                                                                                                                • Facebook
                                                                                                                • Instagram
                                                                                                                • Twitter
                                                                                                                • YouTube
                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                
                                                                                                                ]]>d7cb42dd-03e0-4ea2-96f3-375783c227f2Mon, 15 May 2023 06:00:00 +070024:44falsefullBrenden Kumarasamy is the founder of MasterTalk; he coaches ambitious executives & entrepreneurs to become the top 1% of communicators in their industry.Julian Klymochko – Arbitrage Trades Don’t Always Turn Out to Be Risk-freeBIO: Julian Klymochko is the CEO and Chief Investment Officer of Accelerate, a leading provider of alternative investment solutions.

                                                                                                                STORY: Julian got into an M&A trade where the acquirer had to stage a shareholders’ vote. This led to a hostile acquisition where the target company was bought by another acquirer that was not part of the deal. Julian made a significant loss in this trade.

                                                                                                                LEARNING: Never put on an M&A trade that has the buy side vote. Arbitrage doesn’t always mean a riskless trade.

                                                                                                                 

                                                                                                                “The best way to learn is to practice by doing. So, try it out yourself, and don’t risk more than you can lose.”

                                                                                                                Julian Klymochko

                                                                                                                 

                                                                                                                Guest profile

                                                                                                                Julian Klymochko is the CEO and Chief Investment Officer of Accelerate, a leading provider of alternative investment solutions. Accelerate helps investment advisors, institutions, and individual investors diversify their investment portfolios, manage risk, and improve their portfolio’s risk-adjusted returns. Prior to founding Accelerate in 2018, he was the Chief Investment Officer of Ross Smith Asset Management. He started his career as an Analyst at BMO Capital Markets. Currently, Julian is a Director of the CFA Society Calgary.

                                                                                                                He has been featured in some of the world’s top financial and business media, including Bloomberg, CNBC, The Wall Street Journal, BNN, Business Insider, and The Globe and Mail.

                                                                                                                Worst investment ever

                                                                                                                Julian started out in the mid-2000s as a young investment banking analyst working 100 hours weekly. He was handling mergers and acquisitions (M&A) and advising. During that period, Julian worked on some exciting deals. He got excellent insights into the inner workings of M&A, equity offerings, and capital markets. It was a great place to start a career.

                                                                                                                From that, Julian went to a startup hedge fund. He cut his teeth doing closed-end fund arbitrage, which was a fantastic trade, specifically during the great financial crisis of 2008. He could generate nearly risk-free returns that, at one point, were yielding 50% to 100% annualized returns because there was very low liquidity in the market, and people were desperate to sell. So arbitrage spreads were extensive. After that, Julian got into different arbitrage strategies; volatility arbitrage, convertible arbitrage, and one of his and Warren Buffett’s favorites, risk arbitrage.

                                                                                                                In 2012, Julian launched a standalone risk arbitrage strategy. He started with a $5 million investment from a handful of wealthy investors to conduct this risk arbitrage investment strategy. Risk arbitrage aims to generate high returns consistently—ideally, double-digit annualized returns and no down years.

                                                                                                                For the first four months, Julian put a lot of pressure on himself and was sick to his stomach every morning. But he still had a terrific first year with low volatility. Julian produced a double-digit return with low volatility and minimal drawdown. So investors were happy. The fund continued with that excellent trend for the first three years and grew significantly.

                                                                                                                2015 was an interesting environment in the M&A business. It was open season for pharmaceutical mergers. There was this popular trend called tax inversion. Tax inversion was where pharmaceutical companies would take over a foreign company to re-domicile offshore to lower their tax bill significantly. That trend buoyed M&A activity as domestic US pharmaceutical companies rapidly sought to conduct tax inversions by acquiring non-domestic competitors.

                                                                                                                At the time, a company called Valeant Pharmaceuticals was rapidly consolidating the pharmaceutical space. Their business model was dramatically different than their competitors—the old-school pharma companies. The company hired a former McKinsey consultant, Michael Pearson, to run Valeant. The company had already conducted a tax inversion and was now Canadian-based and not part of the S&P 500. It was part of the Canadian benchmark, the TSX. With that, their attitude toward growth was utterly different. Michael Pearson’s thesis was such that R&D is wasteful. The company grew through acquisitions. They would do hostile takeovers and gobble everyone up. This strategy was working. Their stock was doing exceptionally well.

                                                                                                                Everyone was praising the accolades of Michael Pearson and his business model. It became a highly respected strategy on Main Street and Wall Street. Analysts were going gaga over it, and investors loved it, creating copycats.

                                                                                                                Tax inversions were still all the rage, and Julian was active on these within the fund’s portfolio. Julian had this one particular M&A trade that looked quite attractive. The company, QLT, was a failed biotech company with just a bunch of cash. They were trading at roughly cash value, with few prospects aside from the money they had on the balance sheet and perhaps some tax losses. But one redeeming factor was that they were Canadian, not American, making it a prime candidate for an inversion. That inversion came through a definitive merger agreement with a US company called Auxilium. Auxilium was looking to run this new pharma playbook, re-domicile offshore by a tax inversion merger, then conduct M&A growth like Valeant.

                                                                                                                The requirements to consummate this merger were a successful shareholder vote by QLT shareholders. Additionally, since Auxilium was issuing approximately 25% of its outstanding shares in this merger, its acquirers’ shareholders would have to approve the deal. So they struck a deal with a 5% spread that would close in three months. A 5% spread over three months would be about 20% annualized, a handsome return.

                                                                                                                This trade was 4% of Julian’s fund’s portfolio, both long and short. Over time, Julian felt that a lot of consolidation was happening. He was worried that someone could make a play for Auxilium and acquire the stock in which his fund had a significant short position, which could lead to a considerable loss. So Julian decided to buy call options on Auxilium, utilizing some of that spread available to protect his fund in that awful potential scenario.

                                                                                                                A few months after putting on this trade, the worst-case scenario Julian had imagined happened. A pharmaceutical company run by Michael Pearson’s protege came and made a hostile takeover bid for Auxilium, the target acquirer in this M&A deal. Julian’s fund suffered a massive loss from this deal.

                                                                                                                Lessons learned

                                                                                                                • Never put on a merger arbitrage trade in which the acquirer has to stage a shareholder vote because it makes you vulnerable to a hostile takeover.
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s takeaways

                                                                                                                • Be careful when dealing with arbitrage. It doesn’t always mean riskless arbitrage.
                                                                                                                
                                                                                                                

                                                                                                                Julian’s recommendations

                                                                                                                Julian recommends Twitter as an excellent resource for information. You can follow him @JulianKlymochko. Julian also posts a lot of research and insights on his website that can help you, especially if you’re starting out. You can also check out other investment websites, such as Value Investors Club, where you’ll find professional research.

                                                                                                                Julian also has a couple of favorite investment books that he recommends:

                                                                                                                • You Can Be a Stock Market Genius: Uncover the Secret Hiding Places of Stock Market Profits
                                                                                                                • Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor
                                                                                                                • The Intelligent Investor Rev Ed.: The Definitive Book on Value Investing
                                                                                                                • Any book from Peter Lynch
                                                                                                                
                                                                                                                

                                                                                                                Parting words

                                                                                                                 

                                                                                                                “Teach a man to fish, feed him for a day. Teach a man to arbitrage, feed him for life.”

                                                                                                                Julian Klymochko

                                                                                                                 

                                                                                                                [spp-transcript]

                                                                                                                 

                                                                                                                Connect with Julian Klymochko

                                                                                                                • LinkedIn
                                                                                                                • Twitter
                                                                                                                • Podcast
                                                                                                                • Website
                                                                                                                
                                                                                                                

                                                                                                                Andrew’s books

                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                • My Worst Investment Ever
                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                • Transform Your Business with Dr.Deming’s 14...]]>BIO: Julian Klymochko is the CEO and Chief Investment Officer of Accelerate, a leading provider of alternative investment solutions.

                                                                                                                  STORY: Julian got into an M&A trade where the acquirer had to stage a shareholders’ vote. This led to a hostile acquisition where the target company was bought by another acquirer that was not part of the deal. Julian made a significant loss in this trade.

                                                                                                                  LEARNING: Never put on an M&A trade that has the buy side vote. Arbitrage doesn’t always mean a riskless trade.

                                                                                                                   

                                                                                                                  “The best way to learn is to practice by doing. So, try it out yourself, and don’t risk more than you can lose.”

                                                                                                                  Julian Klymochko

                                                                                                                   

                                                                                                                  Guest profile

                                                                                                                  Julian Klymochko is the CEO and Chief Investment Officer of Accelerate, a leading provider of alternative investment solutions. Accelerate helps investment advisors, institutions, and individual investors diversify their investment portfolios, manage risk, and improve their portfolio’s risk-adjusted returns. Prior to founding Accelerate in 2018, he was the Chief Investment Officer of Ross Smith Asset Management. He started his career as an Analyst at BMO Capital Markets. Currently, Julian is a Director of the CFA Society Calgary.

                                                                                                                  He has been featured in some of the world’s top financial and business media, including Bloomberg, CNBC, The Wall Street Journal, BNN, Business Insider, and The Globe and Mail.

                                                                                                                  Worst investment ever

                                                                                                                  Julian started out in the mid-2000s as a young investment banking analyst working 100 hours weekly. He was handling mergers and acquisitions (M&A) and advising. During that period, Julian worked on some exciting deals. He got excellent insights into the inner workings of M&A, equity offerings, and capital markets. It was a great place to start a career.

                                                                                                                  From that, Julian went to a startup hedge fund. He cut his teeth doing closed-end fund arbitrage, which was a fantastic trade, specifically during the great financial crisis of 2008. He could generate nearly risk-free returns that, at one point, were yielding 50% to 100% annualized returns because there was very low liquidity in the market, and people were desperate to sell. So arbitrage spreads were extensive. After that, Julian got into different arbitrage strategies; volatility arbitrage, convertible arbitrage, and one of his and Warren Buffett’s favorites, risk arbitrage.

                                                                                                                  In 2012, Julian launched a standalone risk arbitrage strategy. He started with a $5 million investment from a handful of wealthy investors to conduct this risk arbitrage investment strategy. Risk arbitrage aims to generate high returns consistently—ideally, double-digit annualized returns and no down years.

                                                                                                                  For the first four months, Julian put a lot of pressure on himself and was sick to his stomach every morning. But he still had a terrific first year with low volatility. Julian produced a double-digit return with low volatility and minimal drawdown. So investors were happy. The fund continued with that excellent trend for the first three years and grew significantly.

                                                                                                                  2015 was an interesting environment in the M&A business. It was open season for pharmaceutical mergers. There was this popular trend called tax inversion. Tax inversion was where pharmaceutical companies would take over a foreign company to re-domicile offshore to lower their tax bill significantly. That trend buoyed M&A activity as domestic US pharmaceutical companies rapidly sought to conduct tax inversions by acquiring non-domestic competitors.

                                                                                                                  At the time, a company called Valeant Pharmaceuticals was rapidly consolidating the pharmaceutical space. Their business model was dramatically different than their competitors—the old-school pharma companies. The company hired a former McKinsey consultant, Michael Pearson, to run Valeant. The company had already conducted a tax inversion and was now Canadian-based and not part of the S&P 500. It was part of the Canadian benchmark, the TSX. With that, their attitude toward growth was utterly different. Michael Pearson’s thesis was such that R&D is wasteful. The company grew through acquisitions. They would do hostile takeovers and gobble everyone up. This strategy was working. Their stock was doing exceptionally well.

                                                                                                                  Everyone was praising the accolades of Michael Pearson and his business model. It became a highly respected strategy on Main Street and Wall Street. Analysts were going gaga over it, and investors loved it, creating copycats.

                                                                                                                  Tax inversions were still all the rage, and Julian was active on these within the fund’s portfolio. Julian had this one particular M&A trade that looked quite attractive. The company, QLT, was a failed biotech company with just a bunch of cash. They were trading at roughly cash value, with few prospects aside from the money they had on the balance sheet and perhaps some tax losses. But one redeeming factor was that they were Canadian, not American, making it a prime candidate for an inversion. That inversion came through a definitive merger agreement with a US company called Auxilium. Auxilium was looking to run this new pharma playbook, re-domicile offshore by a tax inversion merger, then conduct M&A growth like Valeant.

                                                                                                                  The requirements to consummate this merger were a successful shareholder vote by QLT shareholders. Additionally, since Auxilium was issuing approximately 25% of its outstanding shares in this merger, its acquirers’ shareholders would have to approve the deal. So they struck a deal with a 5% spread that would close in three months. A 5% spread over three months would be about 20% annualized, a handsome return.

                                                                                                                  This trade was 4% of Julian’s fund’s portfolio, both long and short. Over time, Julian felt that a lot of consolidation was happening. He was worried that someone could make a play for Auxilium and acquire the stock in which his fund had a significant short position, which could lead to a considerable loss. So Julian decided to buy call options on Auxilium, utilizing some of that spread available to protect his fund in that awful potential scenario.

                                                                                                                  A few months after putting on this trade, the worst-case scenario Julian had imagined happened. A pharmaceutical company run by Michael Pearson’s protege came and made a hostile takeover bid for Auxilium, the target acquirer in this M&A deal. Julian’s fund suffered a massive loss from this deal.

                                                                                                                  Lessons learned

                                                                                                                  • Never put on a merger arbitrage trade in which the acquirer has to stage a shareholder vote because it makes you vulnerable to a hostile takeover.
                                                                                                                  
                                                                                                                  

                                                                                                                  Andrew’s takeaways

                                                                                                                  • Be careful when dealing with arbitrage. It doesn’t always mean riskless arbitrage.
                                                                                                                  
                                                                                                                  

                                                                                                                  Julian’s recommendations

                                                                                                                  Julian recommends Twitter as an excellent resource for information. You can follow him @JulianKlymochko. Julian also posts a lot of research and insights on his website that can help you, especially if you’re starting out. You can also check out other investment websites, such as Value Investors Club, where you’ll find professional research.

                                                                                                                  Julian also has a couple of favorite investment books that he recommends:

                                                                                                                  • You Can Be a Stock Market Genius: Uncover the Secret Hiding Places of Stock Market Profits
                                                                                                                  • Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor
                                                                                                                  • The Intelligent Investor Rev Ed.: The Definitive Book on Value Investing
                                                                                                                  • Any book from Peter Lynch
                                                                                                                  
                                                                                                                  

                                                                                                                  Parting words

                                                                                                                   

                                                                                                                  “Teach a man to fish, feed him for a day. Teach a man to arbitrage, feed him for life.”

                                                                                                                  Julian Klymochko

                                                                                                                   

                                                                                                                  [spp-transcript]

                                                                                                                   

                                                                                                                  Connect with Julian Klymochko

                                                                                                                  • LinkedIn
                                                                                                                  • Twitter
                                                                                                                  • Podcast
                                                                                                                  • Website
                                                                                                                  
                                                                                                                  

                                                                                                                  Andrew’s books

                                                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                  • My Worst Investment Ever
                                                                                                                  • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                  • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                  
                                                                                                                  

                                                                                                                  Andrew’s online programs

                                                                                                                  • Valuation Master Class
                                                                                                                  • The Become a Better Investor Community
                                                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                  • Finance Made Ridiculously Simple
                                                                                                                  • FVMR Investing: Quantamental Investing Across the World
                                                                                                                  • Become a Great Presenter and Increase Your Influence
                                                                                                                  • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                  • Achieve Your Goals
                                                                                                                  
                                                                                                                  

                                                                                                                  Connect with Andrew Stotz:

                                                                                                                  • astotz.com
                                                                                                                  • LinkedIn
                                                                                                                  • Facebook
                                                                                                                  • Instagram
                                                                                                                  • Twitter
                                                                                                                  • YouTube
                                                                                                                  • My Worst Investment Ever Podcast
                                                                                                                  
                                                                                                                  ]]>9043408a-bcc5-4f95-8e8e-9d4fcee265e9Thu, 11 May 2023 06:00:00 +070041:35falsefullJulian Klymochko is the CEO and Chief Investment Officer of Accelerate, a leading provider of alternative investment solutions.David Hay – The Importance of Range ExpansionBIO: David Hay has been employed in the securities industry since 1979 when he joined Dean Witter Reynolds, now Morgan Stanley.

                                                                                                                  STORY: A colleague told David about a business that was going to sell books online. David wasn’t convinced that the business had a competitive edge. So while his colleague invested $50,000 into this company, David chose not to invest. The company was Amazon. Had David invested then, he’d now be a multimillionaire.

                                                                                                                  LEARNING: Invest only what you can afford to lose. Keep challenging your thesis. Have a systematic quantitative framework to help you keep an open and agile mind when investing.

                                                                                                                   

                                                                                                                  “One of the most important things in investing is range expansion.”

                                                                                                                  David Hay

                                                                                                                   

                                                                                                                  Guest profile

                                                                                                                  David Hay has been employed in the securities industry since 1979 when he joined Dean Witter Reynolds, now Morgan Stanley.

                                                                                                                  And since 2022, David has been chief or Co-Chief Investment Officer of Evergreen Gavekal with a special emphasis on macro-economic research.

                                                                                                                  In 2022, David released his highly anticipated book, Bubble 3.0: Who blew it and how to protect yourself when it blows apart.

                                                                                                                  The book explores why he believes the financial markets are headed toward a third iteration of past market rotations.

                                                                                                                  Accordingly, he believes there are a number of investment areas/asset classes poised to benefit from what he has begun referring to as “The New World Disorder.”

                                                                                                                  Worst investment ever

                                                                                                                  In November of 1994, David received a call from a colleague. They were both portfolio managers at Smith Barney. At that point, they were investing side by side in virtually everything. The colleague told David about this guy who was starting a company, and he was going to invest $50,000 in it.

                                                                                                                  The colleague explained that the business would sell books online. David didn’t understand the business’s competitive edge, so he opted not to invest in it.

                                                                                                                  Six months later, the colleague told him the company was going public. Turns out, the company was Amazon. Had David invested in it when his colleague told him to, he’d now be a multimillionaire.

                                                                                                                  Lessons learned

                                                                                                                  • If the idea sounds great, invest only the money you can afford to lose.
                                                                                                                  • The bigger and longer the trading range, the more important the message of the breakout or breakdown is.
                                                                                                                  • Constantly challenge your thesis.
                                                                                                                  
                                                                                                                  

                                                                                                                  Andrew’s takeaways

                                                                                                                  • Have a systematic quantitative framework to help you keep an open and agile mind when investing.
                                                                                                                  • For every company that becomes a billion-dollar or trillion-dollar company, the good news is that 99.99999999999% of people missed it.
                                                                                                                  
                                                                                                                  

                                                                                                                  David’s recommendations

                                                                                                                  David recommends his free newsletter. You can also get a free copy of Bubble 3.0 by emailing him through Substack. David also recommends reading the Felder report by Jesse Felder.

                                                                                                                  No.1 goal for the next 12 months

                                                                                                                  David’s number one goal for the next 12 months is to remove his shorts and go max bullish.

                                                                                                                  Parting words

                                                                                                                   

                                                                                                                  “It’s always so much cheaper to learn from other people’s mistakes than your own.”

                                                                                                                  David Hay

                                                                                                                   

                                                                                                                  [spp-transcript]

                                                                                                                   

                                                                                                                  Connect with David Hay

                                                                                                                  • Twitter
                                                                                                                  • Youtube
                                                                                                                  • Blog
                                                                                                                  
                                                                                                                  

                                                                                                                  Andrew’s books

                                                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                  • My Worst Investment Ever
                                                                                                                  • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                  • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                  
                                                                                                                  

                                                                                                                  Andrew’s online programs

                                                                                                                  • Valuation Master Class
                                                                                                                  • The Become a Better Investor Community
                                                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                  • Finance Made Ridiculously Simple
                                                                                                                  • FVMR Investing: Quantamental Investing Across the World
                                                                                                                  • Become a Great Presenter and Increase Your Influence
                                                                                                                  • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                  • Achieve Your Goals
                                                                                                                  
                                                                                                                  

                                                                                                                  Connect with Andrew Stotz:

                                                                                                                  • astotz.com
                                                                                                                  • LinkedIn
                                                                                                                  • Facebook
                                                                                                                  • Instagram
                                                                                                                  • Twitter
                                                                                                                  • YouTube
                                                                                                                  • My Worst Investment Ever Podcast
                                                                                                                  
                                                                                                                  ]]>BIO: David Hay has been employed in the securities industry since 1979 when he joined Dean Witter Reynolds, now Morgan Stanley.

                                                                                                                  STORY: A colleague told David about a business that was going to sell books online. David wasn’t convinced that the business had a competitive edge. So while his colleague invested $50,000 into this company, David chose not to invest. The company was Amazon. Had David invested then, he’d now be a multimillionaire.

                                                                                                                  LEARNING: Invest only what you can afford to lose. Keep challenging your thesis. Have a systematic quantitative framework to help you keep an open and agile mind when investing.

                                                                                                                   

                                                                                                                  “One of the most important things in investing is range expansion.”

                                                                                                                  David Hay

                                                                                                                   

                                                                                                                  Guest profile

                                                                                                                  David Hay has been employed in the securities industry since 1979 when he joined Dean Witter Reynolds, now Morgan Stanley.

                                                                                                                  And since 2022, David has been chief or Co-Chief Investment Officer of Evergreen Gavekal with a special emphasis on macro-economic research.

                                                                                                                  In 2022, David released his highly anticipated book, Bubble 3.0: Who blew it and how to protect yourself when it blows apart.

                                                                                                                  The book explores why he believes the financial markets are headed toward a third iteration of past market rotations.

                                                                                                                  Accordingly, he believes there are a number of investment areas/asset classes poised to benefit from what he has begun referring to as “The New World Disorder.”

                                                                                                                  Worst investment ever

                                                                                                                  In November of 1994, David received a call from a colleague. They were both portfolio managers at Smith Barney. At that point, they were investing side by side in virtually everything. The colleague told David about this guy who was starting a company, and he was going to invest $50,000 in it.

                                                                                                                  The colleague explained that the business would sell books online. David didn’t understand the business’s competitive edge, so he opted not to invest in it.

                                                                                                                  Six months later, the colleague told him the company was going public. Turns out, the company was Amazon. Had David invested in it when his colleague told him to, he’d now be a multimillionaire.

                                                                                                                  Lessons learned

                                                                                                                  • If the idea sounds great, invest only the money you can afford to lose.
                                                                                                                  • The bigger and longer the trading range, the more important the message of the breakout or breakdown is.
                                                                                                                  • Constantly challenge your thesis.
                                                                                                                  
                                                                                                                  

                                                                                                                  Andrew’s takeaways

                                                                                                                  • Have a systematic quantitative framework to help you keep an open and agile mind when investing.
                                                                                                                  • For every company that becomes a billion-dollar or trillion-dollar company, the good news is that 99.99999999999% of people missed it.
                                                                                                                  
                                                                                                                  

                                                                                                                  David’s recommendations

                                                                                                                  David recommends his free newsletter. You can also get a free copy of Bubble 3.0 by emailing him through Substack. David also recommends reading the Felder report by Jesse Felder.

                                                                                                                  No.1 goal for the next 12 months

                                                                                                                  David’s number one goal for the next 12 months is to remove his shorts and go max bullish.

                                                                                                                  Parting words

                                                                                                                   

                                                                                                                  “It’s always so much cheaper to learn from other people’s mistakes than your own.”

                                                                                                                  David Hay

                                                                                                                   

                                                                                                                  [spp-transcript]

                                                                                                                   

                                                                                                                  Connect with David Hay

                                                                                                                  • Twitter
                                                                                                                  • Youtube
                                                                                                                  • Blog
                                                                                                                  
                                                                                                                  

                                                                                                                  Andrew’s books

                                                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                  • My Worst Investment Ever
                                                                                                                  • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                  • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                  
                                                                                                                  

                                                                                                                  Andrew’s online programs

                                                                                                                  • Valuation Master Class
                                                                                                                  • The Become a Better Investor Community
                                                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                  • Finance Made Ridiculously Simple
                                                                                                                  • FVMR Investing: Quantamental Investing Across the World
                                                                                                                  • Become a Great Presenter and Increase Your Influence
                                                                                                                  • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                  • Achieve Your Goals
                                                                                                                  
                                                                                                                  

                                                                                                                  Connect with Andrew Stotz:

                                                                                                                  • astotz.com
                                                                                                                  • LinkedIn
                                                                                                                  • Facebook
                                                                                                                  • Instagram
                                                                                                                  • Twitter
                                                                                                                  • YouTube
                                                                                                                  • My Worst Investment Ever Podcast
                                                                                                                  
                                                                                                                  ]]>0f505171-6148-4ea4-b739-9acd0b48d8a8Wed, 10 May 2023 06:00:00 +070048:57falsefullDavid Hay has been employed in the securities industry since 1979 when he joined Dean Witter Reynolds, now Morgan Stanley.Rex Salisbury – Quitting Can Be a Very Important Skill to ExerciseBIO: Rex Salisbury is the Founder & General Partner at Cambrian Ventures, a pre-seed & seed focused fintech fund.

                                                                                                                  STORY: Rex’s biggest mistake ever was sticking with his initial career too long, even though he knew he shouldn’t have been working that job.

                                                                                                                  LEARNING: Invest in the skill that you want to move into as much as you. Build networks early in your career.

                                                                                                                   

                                                                                                                  “Make yourself marketable. It’s amazing what you can learn if you invest in certain things.”

                                                                                                                  Rex Salisbury

                                                                                                                   

                                                                                                                  Guest profile

                                                                                                                  Rex Salisbury is the Founder & General Partner at Cambrian Ventures, a pre-seed & seed focused fintech fund. He previously was a Partner at Andreessen Horowitz, where he helped launch the fintech vertical. He has over a decade of experience working in finance & fintech, primarily as a software engineer, before becoming a venture capitalist.

                                                                                                                  Worst investment ever

                                                                                                                  Rex’s biggest mistake ever was sticking with his initial career too long. Rex attended a small liberal arts college on the American east coast—Davidson. He had a great experience and made a lot of good lifelong friends. Rex studied economics and also got a major in history.

                                                                                                                  During his senior year, Rex worked in investment banking, specifically for Merrill Lynch. He also did an internship in South Africa and studied formal money lending. After college, Rex went to work in a bank. He believed that since banks are big businesses, there must be interesting work to do.

                                                                                                                  Unfortunately, the experience wasn’t what Rex had imagined. He hated his job and had begun thinking about quitting from the second month on the job. But he kept dragging on and wasted the first four years of his career doing something he knew he shouldn’t have been doing.

                                                                                                                  Lessons learned

                                                                                                                  • Quitting can be a very important skill to exercise.
                                                                                                                  • If you’re considering leaving something like a job, you should quit it sooner rather than later for better life outcomes.
                                                                                                                  • It’s incredibly important to have access to good networks early in your career.
                                                                                                                  • If you have the unfair advantage of being young, relatively unattached, and the ability to relocate geographically, do it. It will expand your networks.
                                                                                                                  
                                                                                                                  

                                                                                                                  Andrew’s takeaways

                                                                                                                  • If you’re feeling like quitting, take that seriously. Sit down, write about it, talk to someone about it, and start to take some action.
                                                                                                                  • Invest in the skill that you want to move into as much as you. That will help you make that transition.
                                                                                                                  
                                                                                                                  

                                                                                                                  Actionable advice

                                                                                                                  If you’re interested in a particular area, find other people who are really good at writing and talking about that area. Exercising that muscle over time can help open doors to building valuable networks and relationships.

                                                                                                                  No.1 goal for the next 12 months

                                                                                                                  Rex’s number one goal for the next 12 months is to identify individuals building the next big companies that will change financial services and invest in 12 of the most interesting of those.

                                                                                                                  Parting words

                                                                                                                   

                                                                                                                  “If you feel like you don’t have the skill set to affect some of these changes, put in the work.”

                                                                                                                  Rex Salisbury

                                                                                                                   

                                                                                                                  [spp-transcript]

                                                                                                                   

                                                                                                                  Connect with Rex Salisbury

                                                                                                                  • LinkedIn
                                                                                                                  • Twitter
                                                                                                                  • Youtube
                                                                                                                  • Blog
                                                                                                                  • Website
                                                                                                                  • Podcast
                                                                                                                  
                                                                                                                  

                                                                                                                  Andrew’s books

                                                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                  • My Worst Investment Ever
                                                                                                                  • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                  • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                  
                                                                                                                  

                                                                                                                  Andrew’s online programs

                                                                                                                  • Valuation Master Class
                                                                                                                  • The Become a Better Investor Community
                                                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                  • Finance Made Ridiculously Simple
                                                                                                                  • FVMR Investing: Quantamental Investing Across the World
                                                                                                                  • Become a Great Presenter and Increase Your Influence
                                                                                                                  • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                  • Achieve Your Goals
                                                                                                                  
                                                                                                                  

                                                                                                                  Connect with Andrew Stotz:

                                                                                                                  • astotz.com
                                                                                                                  • LinkedIn
                                                                                                                  • Facebook
                                                                                                                  • Instagram
                                                                                                                  • Twitter
                                                                                                                  • YouTube
                                                                                                                  • My Worst Investment Ever Podcast
                                                                                                                  
                                                                                                                  ]]>BIO: Rex Salisbury is the Founder & General Partner at Cambrian Ventures, a pre-seed & seed focused fintech fund.

                                                                                                                  STORY: Rex’s biggest mistake ever was sticking with his initial career too long, even though he knew he shouldn’t have been working that job.

                                                                                                                  LEARNING: Invest in the skill that you want to move into as much as you. Build networks early in your career.

                                                                                                                   

                                                                                                                  “Make yourself marketable. It’s amazing what you can learn if you invest in certain things.”

                                                                                                                  Rex Salisbury

                                                                                                                   

                                                                                                                  Guest profile

                                                                                                                  Rex Salisbury is the Founder & General Partner at Cambrian Ventures, a pre-seed & seed focused fintech fund. He previously was a Partner at Andreessen Horowitz, where he helped launch the fintech vertical. He has over a decade of experience working in finance & fintech, primarily as a software engineer, before becoming a venture capitalist.

                                                                                                                  Worst investment ever

                                                                                                                  Rex’s biggest mistake ever was sticking with his initial career too long. Rex attended a small liberal arts college on the American east coast—Davidson. He had a great experience and made a lot of good lifelong friends. Rex studied economics and also got a major in history.

                                                                                                                  During his senior year, Rex worked in investment banking, specifically for Merrill Lynch. He also did an internship in South Africa and studied formal money lending. After college, Rex went to work in a bank. He believed that since banks are big businesses, there must be interesting work to do.

                                                                                                                  Unfortunately, the experience wasn’t what Rex had imagined. He hated his job and had begun thinking about quitting from the second month on the job. But he kept dragging on and wasted the first four years of his career doing something he knew he shouldn’t have been doing.

                                                                                                                  Lessons learned

                                                                                                                  • Quitting can be a very important skill to exercise.
                                                                                                                  • If you’re considering leaving something like a job, you should quit it sooner rather than later for better life outcomes.
                                                                                                                  • It’s incredibly important to have access to good networks early in your career.
                                                                                                                  • If you have the unfair advantage of being young, relatively unattached, and the ability to relocate geographically, do it. It will expand your networks.
                                                                                                                  
                                                                                                                  

                                                                                                                  Andrew’s takeaways

                                                                                                                  • If you’re feeling like quitting, take that seriously. Sit down, write about it, talk to someone about it, and start to take some action.
                                                                                                                  • Invest in the skill that you want to move into as much as you. That will help you make that transition.
                                                                                                                  
                                                                                                                  

                                                                                                                  Actionable advice

                                                                                                                  If you’re interested in a particular area, find other people who are really good at writing and talking about that area. Exercising that muscle over time can help open doors to building valuable networks and relationships.

                                                                                                                  No.1 goal for the next 12 months

                                                                                                                  Rex’s number one goal for the next 12 months is to identify individuals building the next big companies that will change financial services and invest in 12 of the most interesting of those.

                                                                                                                  Parting words

                                                                                                                   

                                                                                                                  “If you feel like you don’t have the skill set to affect some of these changes, put in the work.”

                                                                                                                  Rex Salisbury

                                                                                                                   

                                                                                                                  [spp-transcript]

                                                                                                                   

                                                                                                                  Connect with Rex Salisbury

                                                                                                                  • LinkedIn
                                                                                                                  • Twitter
                                                                                                                  • Youtube
                                                                                                                  • Blog
                                                                                                                  • Website
                                                                                                                  • Podcast
                                                                                                                  
                                                                                                                  

                                                                                                                  Andrew’s books

                                                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                  • My Worst Investment Ever
                                                                                                                  • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                  • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                  
                                                                                                                  

                                                                                                                  Andrew’s online programs

                                                                                                                  • Valuation Master Class
                                                                                                                  • The Become a Better Investor Community
                                                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                  • Finance Made Ridiculously Simple
                                                                                                                  • FVMR Investing: Quantamental Investing Across the World
                                                                                                                  • Become a Great Presenter and Increase Your Influence
                                                                                                                  • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                  • Achieve Your Goals
                                                                                                                  
                                                                                                                  

                                                                                                                  Connect with Andrew Stotz:

                                                                                                                  • astotz.com
                                                                                                                  • LinkedIn
                                                                                                                  • Facebook
                                                                                                                  • Instagram
                                                                                                                  • Twitter
                                                                                                                  • YouTube
                                                                                                                  • My Worst Investment Ever Podcast
                                                                                                                  
                                                                                                                  ]]>8950d61b-7fc6-4377-a5cd-4b2d119776aeMon, 08 May 2023 06:00:00 +070031:25falsefullRex Salisbury is the Founder & General Partner at Cambrian Ventures, a pre-seed & seed focused fintech fund.ISMS 23: Larry Swedroe – Do You Allow Yourself to Be Influenced by Your Ego and Herd Mentality?In this episode of Investment Strategy Made Simple (ISMS), Andrew and Larry discuss chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this fourth episode, they talk about mistake number five: do you let your ego dominate the decision-making process? And mistake number six: do you allow yourself to be influenced by herd mentality?

                                                                                                                  LEARNING: Don’t let your ego influence your decision-making. Stay disciplined and avoid becoming irrationally exuberant.

                                                                                                                   

                                                                                                                  “The market is a predator preying on the mistakes of investors, their egos, and their herd behavior.”

                                                                                                                  Larry Swedroe

                                                                                                                   

                                                                                                                  In today’s episode, Andrew continues his discussion with Larry Swedroe, head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                                                                  Larry deeply understands the world of academic research and investing, especially risk. Today Andrew and Larry discuss a chapter of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this fourth series, they talk about mistake number five: do you let your ego dominate the decision-making process? And mistake number six: do you allow yourself to be influenced by herd mentality?

                                                                                                                  Missed out on previous mistakes? Check them out:

                                                                                                                  • ISMS 8: Investment Mistake No.1: Are You Overconfident in Your Skills?
                                                                                                                  • ISMS 17: Investment Mistake No.2: Do You Project Recent Trends Indefinitely Into the Future?
                                                                                                                  • ISMS 20: Larry Swedroe – Investment Mistakes No.3 and 4
                                                                                                                  
                                                                                                                  

                                                                                                                  Mistake number 5: Do you let your ego dominate the decision-making process?

                                                                                                                  According to Larry, logically, we make mistakes because we are human beings. One common mistake investors make is letting their egos influence their decision-making. No matter what you ask people, they all tend to think they’re better than average. Ego wants us to feel good, so we believe we’re better than average. But, the problem with ego is that it would much prefer to play a game where it only wins and never loses instead of a game where it can win or lose.

                                                                                                                  Assume you’re a passive investor and put your ego aside because you know you’re unlikely to beat the market. So you choose to invest in the S&P 500, but unfortunately, it does poorly. Since you knew it could go either way, you have no one to blame except yourself.

                                                                                                                  On the other hand, if you choose an active fund and it happens to outperform, you take credit for your brilliant decision to choose that active fund manager. And if it underperforms, you blame the manager and fire them. Here, the ego would much rather play a game of I win, but I don’t lose, which is what happens if you’re an active investor, not a passive one where there’s no one to blame. Larry believes that’s part of why almost half the number of investors, despite all the overwhelming evidence, choose to invest in active funds.

                                                                                                                  Larry states that people with more skills have a better chance of avoiding all these behavioral mistakes. They understand the nature of the game they’re playing. They know that they’re competing against the market’s collective wisdom, which is a lot tougher to beat. This knowledge is what protects them from letting ego dominate their decision-making process.

                                                                                                                  Mistake number 6: Do you allow yourself to be influenced by herd mentality?

                                                                                                                  Psychologists have known for a long time that crowds can influence us. We want to own the same cars as the Joneses. The fear of missing out causes people to follow the herd very quickly. It’s what causes you to be attracted to the next new shiny thing and jump on the bandwagon. But it takes you a long time to unwind and realize the insanity of what you’re doing.

                                                                                                                  The key to staying disciplined and avoiding becoming irrationally exuberant is having a thorough understanding of how markets work and knowing that bubbles eventually burst. You also need to have a well-designed roadmap to achieve your financial goals. Have an investment policy statement and set the framework under which you will be investing. Finally, have an understanding of how human behavior can impact investment decisions.

                                                                                                                  About Larry Swedroe

                                                                                                                  Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                                                                  Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                                                                  Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                                                                  Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                                                                   

                                                                                                                  [spp-transcript]

                                                                                                                   

                                                                                                                  Connect with Larry Swedroe

                                                                                                                  • LinkedIn
                                                                                                                  • Twitter
                                                                                                                  • Website
                                                                                                                  • Books
                                                                                                                  
                                                                                                                  

                                                                                                                  Andrew’s books

                                                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                  • My Worst Investment Ever
                                                                                                                  • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                  • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                  
                                                                                                                  

                                                                                                                  Andrew’s online programs

                                                                                                                  • Valuation Master Class
                                                                                                                  • The Become a Better Investor Community
                                                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                  • Finance Made Ridiculously Simple
                                                                                                                  • FVMR Investing: Quantamental Investing Across the World
                                                                                                                  • Become a Great Presenter and Increase Your Influence
                                                                                                                  • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                  • Achieve Your Goals
                                                                                                                  
                                                                                                                  

                                                                                                                  Connect with Andrew Stotz:

                                                                                                                  • astotz.com
                                                                                                                  • LinkedIn
                                                                                                                  • Facebook
                                                                                                                  • Instagram
                                                                                                                  • Twitter
                                                                                                                  • In this episode of Investment Strategy Made Simple (ISMS), Andrew and Larry discuss chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this fourth episode, they talk about mistake number five: do you let your ego dominate the decision-making process? And mistake number six: do you allow yourself to be influenced by herd mentality?

                                                                                                                    LEARNING: Don’t let your ego influence your decision-making. Stay disciplined and avoid becoming irrationally exuberant.

                                                                                                                     

                                                                                                                    “The market is a predator preying on the mistakes of investors, their egos, and their herd behavior.”

                                                                                                                    Larry Swedroe

                                                                                                                     

                                                                                                                    In today’s episode, Andrew continues his discussion with Larry Swedroe, head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                                                                    Larry deeply understands the world of academic research and investing, especially risk. Today Andrew and Larry discuss a chapter of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this fourth series, they talk about mistake number five: do you let your ego dominate the decision-making process? And mistake number six: do you allow yourself to be influenced by herd mentality?

                                                                                                                    Missed out on previous mistakes? Check them out:

                                                                                                                    • ISMS 8: Investment Mistake No.1: Are You Overconfident in Your Skills?
                                                                                                                    • ISMS 17: Investment Mistake No.2: Do You Project Recent Trends Indefinitely Into the Future?
                                                                                                                    • ISMS 20: Larry Swedroe – Investment Mistakes No.3 and 4
                                                                                                                    
                                                                                                                    

                                                                                                                    Mistake number 5: Do you let your ego dominate the decision-making process?

                                                                                                                    According to Larry, logically, we make mistakes because we are human beings. One common mistake investors make is letting their egos influence their decision-making. No matter what you ask people, they all tend to think they’re better than average. Ego wants us to feel good, so we believe we’re better than average. But, the problem with ego is that it would much prefer to play a game where it only wins and never loses instead of a game where it can win or lose.

                                                                                                                    Assume you’re a passive investor and put your ego aside because you know you’re unlikely to beat the market. So you choose to invest in the S&P 500, but unfortunately, it does poorly. Since you knew it could go either way, you have no one to blame except yourself.

                                                                                                                    On the other hand, if you choose an active fund and it happens to outperform, you take credit for your brilliant decision to choose that active fund manager. And if it underperforms, you blame the manager and fire them. Here, the ego would much rather play a game of I win, but I don’t lose, which is what happens if you’re an active investor, not a passive one where there’s no one to blame. Larry believes that’s part of why almost half the number of investors, despite all the overwhelming evidence, choose to invest in active funds.

                                                                                                                    Larry states that people with more skills have a better chance of avoiding all these behavioral mistakes. They understand the nature of the game they’re playing. They know that they’re competing against the market’s collective wisdom, which is a lot tougher to beat. This knowledge is what protects them from letting ego dominate their decision-making process.

                                                                                                                    Mistake number 6: Do you allow yourself to be influenced by herd mentality?

                                                                                                                    Psychologists have known for a long time that crowds can influence us. We want to own the same cars as the Joneses. The fear of missing out causes people to follow the herd very quickly. It’s what causes you to be attracted to the next new shiny thing and jump on the bandwagon. But it takes you a long time to unwind and realize the insanity of what you’re doing.

                                                                                                                    The key to staying disciplined and avoiding becoming irrationally exuberant is having a thorough understanding of how markets work and knowing that bubbles eventually burst. You also need to have a well-designed roadmap to achieve your financial goals. Have an investment policy statement and set the framework under which you will be investing. Finally, have an understanding of how human behavior can impact investment decisions.

                                                                                                                    About Larry Swedroe

                                                                                                                    Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                                                                    Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                                                                    Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                                                                    Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                                                                     

                                                                                                                    [spp-transcript]

                                                                                                                     

                                                                                                                    Connect with Larry Swedroe

                                                                                                                    • LinkedIn
                                                                                                                    • Twitter
                                                                                                                    • Website
                                                                                                                    • Books
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s books

                                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                    • My Worst Investment Ever
                                                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s online programs

                                                                                                                    • Valuation Master Class
                                                                                                                    • The Become a Better Investor Community
                                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                    • Finance Made Ridiculously Simple
                                                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                    • Achieve Your Goals
                                                                                                                    
                                                                                                                    

                                                                                                                    Connect with Andrew Stotz:

                                                                                                                    • astotz.com
                                                                                                                    • LinkedIn
                                                                                                                    • Facebook
                                                                                                                    • Instagram
                                                                                                                    • Twitter
                                                                                                                    • YouTube
                                                                                                                    • My Worst Investment Ever Podcast
                                                                                                                    
                                                                                                                    

                                                                                                                    Further reading mentioned

                                                                                                                    • Gary Belsky (January 2010), Why Smart People Make Big Money Mistakes and How to Correct Them: Lessons from the Life-Changing Science of Behavioral Economics
                                                                                                                    • Andrew L. Berkin and Larry E. Swedroe (October 2016), Your Complete Guide to Factor-Based Investing: The Way Smart Money Invests Today
                                                                                                                    • James O’Shaughnessy (November 2011), What Works on Wall Street, Fourth Edition: The Classic Guide to the Best-Performing Investment Strategies of All Time
                                                                                                                    
                                                                                                                    ]]>311cb0f6-ab6f-47ce-b697-2d4f60820c5fFri, 05 May 2023 06:00:00 +070034:53falsefullIn this episode of Investment Strategy Made Simple (ISMS), Andrew and Larry discuss chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this fourth episode, they talk about mistake number five: do you let your ego dominate the decision-making process? And mistake number six: do you allow yourself to be influenced by herd mentality?Harvey Sawikin – Do Your Own HomeworkBIO: Harvey Sawikin is the co-founder and co-manager of Firebird. Launched in early 1994, Firebird’s funds were the first dedicated to the stock markets of Russia and the former Soviet Union.

                                                                                                                    STORY: Harvey invested twice in a bank and a vodka company without due diligence. Instead, he believed that other companies who had invested in those investments had done the job of verifying their viability. Harvey lost huge amounts in both investments.

                                                                                                                    LEARNING: You’ll fail if you rely on someone else’s due diligence and work. The most dangerous time to invest is when it’s the easiest to invest.

                                                                                                                     

                                                                                                                    “Relying on someone else’s due diligence is a mistake because you never know what’s going on or when stuff starts to go wrong.”

                                                                                                                    Harvey Sawikin

                                                                                                                     

                                                                                                                    Guest profile

                                                                                                                    Harvey Sawikin is the co-founder and co-manager of Firebird. Launched starting in early 1994, Firebird’s funds were the first dedicated to the stock markets of Russia and the former Soviet Union. Harvey also co-founded the Amber funds, which do private equity in the Baltic States. Before Firebird, he was an M&A lawyer at Wachtell Lipton after attending Harvard Law School and clerking for a Federal judge. Harvey’s novel, about a young lawyer who becomes an inside trader, was published by Simon & Schuster in 1995. He lives in Manhattan with his wife of 32 years and a neurotic 15-year-old cockapoo.

                                                                                                                    Worst investment ever

                                                                                                                    One of the largest banks in Kazakhstan, BTA Bank, approached Harvey’s company with an investment proposal. Another fund in the region had taken a position in it. The bank was supposedly very close with management and had excellent insight into how the company would build. The company looked cheap, with a reasonable price to book, and the economy was performing well. So Harvey invested in the bank.

                                                                                                                    It turns out the bank’s loan book was crooked, and there was a lot of self-dealing. The guy who was the main power behind the bank was arrested for misappropriating millions of dollars from the bank through bad loans. The bank was put into bankruptcy and was taken over by another bank. The shareholders were almost wiped out. Harvey’s company had invested $20 million and got under a million back.

                                                                                                                    In another incident, Harvey was very interested in getting involved in Ukraine. When a vodka company was brought to their attention, they became keen on investing in it, especially since a famous hedge fund in New York had bought a direct position. The fund said they had maxed out how much they could take and were willing to sell Harvey part of their stake.

                                                                                                                    Harvey’s company made its investment, and within two or three weeks, the vodka company released gross earnings. Its financial results were 40% below where they were supposed to be.

                                                                                                                    Harvey believed they had been duped by the hedge fund and wound up litigating against them. He eventually dropped the case due to the ruinous litigation costs in England and where the loser pays. He surrendered to losing that investment.

                                                                                                                    Lessons learned

                                                                                                                    • You’ll fail if you rely on someone else’s due diligence and work.
                                                                                                                    • Be careful when investing during a bubble because it becomes invisible to you when you’re inside it.
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s takeaways

                                                                                                                    • Do your own due diligence.
                                                                                                                    • Don’t overestimate the knowledge, skills, and persistence of other investors.
                                                                                                                    • The most dangerous time to invest is when it is the easiest to invest.
                                                                                                                    
                                                                                                                    

                                                                                                                    Harvey’s recommendations

                                                                                                                    Harvey recommends Twitter as a source of real-time information as long as you follow the right people.

                                                                                                                    No.1 goal for the next 12 months

                                                                                                                    Harvey’s number one goal for the next 12 months is to hang onto his Russian positions and make sure his investors recover their money and continue to find value in the rest of Eastern Europe when the war is over.

                                                                                                                    Parting words

                                                                                                                     

                                                                                                                    “If you don’t obsess over your mistakes, you’re not a real investor.”

                                                                                                                    Harvey Sawikin

                                                                                                                     

                                                                                                                    [spp-transcript]

                                                                                                                     

                                                                                                                    Connect with Harvey Sawikin

                                                                                                                    • Facebook
                                                                                                                    • Twitter
                                                                                                                    • Instagram
                                                                                                                    • Website
                                                                                                                    • Book
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s books

                                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                    • My Worst Investment Ever
                                                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s online programs

                                                                                                                    • Valuation Master Class
                                                                                                                    • The Become a Better Investor Community
                                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                    • Finance Made Ridiculously Simple
                                                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                    • Achieve Your Goals
                                                                                                                    
                                                                                                                    

                                                                                                                    Connect with Andrew Stotz:

                                                                                                                    • astotz.com
                                                                                                                    • LinkedIn
                                                                                                                    • Facebook
                                                                                                                    • Instagram
                                                                                                                    • Twitter
                                                                                                                    • YouTube
                                                                                                                    • My Worst Investment Ever Podcast
                                                                                                                    
                                                                                                                    ]]>BIO: Harvey Sawikin is the co-founder and co-manager of Firebird. Launched in early 1994, Firebird’s funds were the first dedicated to the stock markets of Russia and the former Soviet Union.

                                                                                                                    STORY: Harvey invested twice in a bank and a vodka company without due diligence. Instead, he believed that other companies who had invested in those investments had done the job of verifying their viability. Harvey lost huge amounts in both investments.

                                                                                                                    LEARNING: You’ll fail if you rely on someone else’s due diligence and work. The most dangerous time to invest is when it’s the easiest to invest.

                                                                                                                     

                                                                                                                    “Relying on someone else’s due diligence is a mistake because you never know what’s going on or when stuff starts to go wrong.”

                                                                                                                    Harvey Sawikin

                                                                                                                     

                                                                                                                    Guest profile

                                                                                                                    Harvey Sawikin is the co-founder and co-manager of Firebird. Launched starting in early 1994, Firebird’s funds were the first dedicated to the stock markets of Russia and the former Soviet Union. Harvey also co-founded the Amber funds, which do private equity in the Baltic States. Before Firebird, he was an M&A lawyer at Wachtell Lipton after attending Harvard Law School and clerking for a Federal judge. Harvey’s novel, about a young lawyer who becomes an inside trader, was published by Simon & Schuster in 1995. He lives in Manhattan with his wife of 32 years and a neurotic 15-year-old cockapoo.

                                                                                                                    Worst investment ever

                                                                                                                    One of the largest banks in Kazakhstan, BTA Bank, approached Harvey’s company with an investment proposal. Another fund in the region had taken a position in it. The bank was supposedly very close with management and had excellent insight into how the company would build. The company looked cheap, with a reasonable price to book, and the economy was performing well. So Harvey invested in the bank.

                                                                                                                    It turns out the bank’s loan book was crooked, and there was a lot of self-dealing. The guy who was the main power behind the bank was arrested for misappropriating millions of dollars from the bank through bad loans. The bank was put into bankruptcy and was taken over by another bank. The shareholders were almost wiped out. Harvey’s company had invested $20 million and got under a million back.

                                                                                                                    In another incident, Harvey was very interested in getting involved in Ukraine. When a vodka company was brought to their attention, they became keen on investing in it, especially since a famous hedge fund in New York had bought a direct position. The fund said they had maxed out how much they could take and were willing to sell Harvey part of their stake.

                                                                                                                    Harvey’s company made its investment, and within two or three weeks, the vodka company released gross earnings. Its financial results were 40% below where they were supposed to be.

                                                                                                                    Harvey believed they had been duped by the hedge fund and wound up litigating against them. He eventually dropped the case due to the ruinous litigation costs in England and where the loser pays. He surrendered to losing that investment.

                                                                                                                    Lessons learned

                                                                                                                    • You’ll fail if you rely on someone else’s due diligence and work.
                                                                                                                    • Be careful when investing during a bubble because it becomes invisible to you when you’re inside it.
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s takeaways

                                                                                                                    • Do your own due diligence.
                                                                                                                    • Don’t overestimate the knowledge, skills, and persistence of other investors.
                                                                                                                    • The most dangerous time to invest is when it is the easiest to invest.
                                                                                                                    
                                                                                                                    

                                                                                                                    Harvey’s recommendations

                                                                                                                    Harvey recommends Twitter as a source of real-time information as long as you follow the right people.

                                                                                                                    No.1 goal for the next 12 months

                                                                                                                    Harvey’s number one goal for the next 12 months is to hang onto his Russian positions and make sure his investors recover their money and continue to find value in the rest of Eastern Europe when the war is over.

                                                                                                                    Parting words

                                                                                                                     

                                                                                                                    “If you don’t obsess over your mistakes, you’re not a real investor.”

                                                                                                                    Harvey Sawikin

                                                                                                                     

                                                                                                                    [spp-transcript]

                                                                                                                     

                                                                                                                    Connect with Harvey Sawikin

                                                                                                                    • Facebook
                                                                                                                    • Twitter
                                                                                                                    • Instagram
                                                                                                                    • Website
                                                                                                                    • Book
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s books

                                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                    • My Worst Investment Ever
                                                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s online programs

                                                                                                                    • Valuation Master Class
                                                                                                                    • The Become a Better Investor Community
                                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                    • Finance Made Ridiculously Simple
                                                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                    • Achieve Your Goals
                                                                                                                    
                                                                                                                    

                                                                                                                    Connect with Andrew Stotz:

                                                                                                                    • astotz.com
                                                                                                                    • LinkedIn
                                                                                                                    • Facebook
                                                                                                                    • Instagram
                                                                                                                    • Twitter
                                                                                                                    • YouTube
                                                                                                                    • My Worst Investment Ever Podcast
                                                                                                                    
                                                                                                                    ]]>830c2113-6c24-4f59-a100-444f1102dff4Thu, 04 May 2023 06:00:00 +070036:35falsefullHarvey Sawikin is the co-founder and co-manager of Firebird. Launched in early 1994, Firebird’s funds were the first dedicated to the stock markets of Russia and the former Soviet Union.Paul Krake – Surround Yourself With Experienced PeopleBIO: Paul Krake is a global strategist focusing on mega themes of climate, China, digitization, and demographics.

                                                                                                                    STORY: Paul quit a prestigious job where he had seasoned mentors to start a hedge fund. After a few years, he realized he wasn’t mature enough or emotionally prepared to run a business on his own.

                                                                                                                    LEARNING: Surround yourself with people who are more experienced than you are. Think about all the scenarios where an investment can go wrong.

                                                                                                                     

                                                                                                                    “For every good idea out there, there are a million ways (that you can’t think about) for it to go wrong.”

                                                                                                                    Paul Krake

                                                                                                                     

                                                                                                                    Guest profile

                                                                                                                    Paul Krake is a global strategist focusing on mega themes of climate, China, digitization, and demographics. View from the Peak, Paul’s consultancy was formed in 2011 after an 18-year career in investment banking and as a macro hedge fund manager, where he covers global institutions on these mega themes. His latest venture is Climate Transformed, a global community of climate investors, entrepreneurs, and corporate leaders who are practically implementing the $100 trillion investment required for us to achieve decarbonization and sustainability.

                                                                                                                    Worst investment ever

                                                                                                                    Paul’s dad passed away in November 2004, and a couple of days after his funeral, Paul was sitting in his mom’s backyard at four in the morning. At that moment, he thought of the idea of starting a fund.

                                                                                                                    Paul went ahead with his idea and started a hedge fund even though the timing was wrong, and it was for all the wrong reasons to follow through with this idea. There was such a high degree of emotion involved in making this decision that he didn’t really think through it and consider all that he was giving up.

                                                                                                                    At the time, Paul had a prestigious job at Caxton Associates. He had the support of great mentors and trainers. He gave up all this to start his business.

                                                                                                                    After about three years of running the hedge fund, Paul realized he wasn’t emotionally prepared or mature enough to do what he was doing.

                                                                                                                    Lessons learned

                                                                                                                    • Surround yourself with people who are more experienced than you are.
                                                                                                                    • Think about all the scenarios where an investment can go wrong.
                                                                                                                    • Think of a business as trade and have an exit strategy if it doesn’t work for X years or if you spend X amount.
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s takeaways

                                                                                                                    • When you get that wind of confidence and want to invest, take a step back and think things through.
                                                                                                                    • When you quit a job to start a business, you lose support and have to do it alone.
                                                                                                                    
                                                                                                                    

                                                                                                                    Actionable advice

                                                                                                                    Before you make any investment:

                                                                                                                    1. Think about your processes.
                                                                                                                    2. Consider your entry and exit position and treat everything with the same agnostic clinical approach.
                                                                                                                    3. Always have an exit strategy for when things don’t work out.
                                                                                                                    
                                                                                                                    

                                                                                                                    Paul’s recommendations

                                                                                                                    Recommended resources: The secret to not getting stressed over not finding ways to de-stress is to use fewer resources.

                                                                                                                    No.1 goal for the next 12 months

                                                                                                                    Paul’s number one goal for the next 12 months is to successfully roll out 30 in-person events in nine countries.

                                                                                                                    Parting words

                                                                                                                     

                                                                                                                    “I love this. I think it’s a great way to get people to seriously think about the benefits of failing.”

                                                                                                                    Paul Krake

                                                                                                                     

                                                                                                                    [spp-transcript]

                                                                                                                     

                                                                                                                    Connect with Paul Krake

                                                                                                                    • LinkedIn
                                                                                                                    • Website
                                                                                                                    • Podcast
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s books

                                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                    • My Worst Investment Ever
                                                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s online programs

                                                                                                                    • Valuation Master Class
                                                                                                                    • The Become a Better Investor Community
                                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                    • Finance Made Ridiculously Simple
                                                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                    • Achieve Your Goals
                                                                                                                    
                                                                                                                    

                                                                                                                    Connect with Andrew Stotz:

                                                                                                                    • astotz.com
                                                                                                                    • LinkedIn
                                                                                                                    • Facebook
                                                                                                                    • Instagram
                                                                                                                    • Twitter
                                                                                                                    • YouTube
                                                                                                                    • My Worst Investment Ever Podcast
                                                                                                                    
                                                                                                                    ]]>BIO: Paul Krake is a global strategist focusing on mega themes of climate, China, digitization, and demographics.

                                                                                                                    STORY: Paul quit a prestigious job where he had seasoned mentors to start a hedge fund. After a few years, he realized he wasn’t mature enough or emotionally prepared to run a business on his own.

                                                                                                                    LEARNING: Surround yourself with people who are more experienced than you are. Think about all the scenarios where an investment can go wrong.

                                                                                                                     

                                                                                                                    “For every good idea out there, there are a million ways (that you can’t think about) for it to go wrong.”

                                                                                                                    Paul Krake

                                                                                                                     

                                                                                                                    Guest profile

                                                                                                                    Paul Krake is a global strategist focusing on mega themes of climate, China, digitization, and demographics. View from the Peak, Paul’s consultancy was formed in 2011 after an 18-year career in investment banking and as a macro hedge fund manager, where he covers global institutions on these mega themes. His latest venture is Climate Transformed, a global community of climate investors, entrepreneurs, and corporate leaders who are practically implementing the $100 trillion investment required for us to achieve decarbonization and sustainability.

                                                                                                                    Worst investment ever

                                                                                                                    Paul’s dad passed away in November 2004, and a couple of days after his funeral, Paul was sitting in his mom’s backyard at four in the morning. At that moment, he thought of the idea of starting a fund.

                                                                                                                    Paul went ahead with his idea and started a hedge fund even though the timing was wrong, and it was for all the wrong reasons to follow through with this idea. There was such a high degree of emotion involved in making this decision that he didn’t really think through it and consider all that he was giving up.

                                                                                                                    At the time, Paul had a prestigious job at Caxton Associates. He had the support of great mentors and trainers. He gave up all this to start his business.

                                                                                                                    After about three years of running the hedge fund, Paul realized he wasn’t emotionally prepared or mature enough to do what he was doing.

                                                                                                                    Lessons learned

                                                                                                                    • Surround yourself with people who are more experienced than you are.
                                                                                                                    • Think about all the scenarios where an investment can go wrong.
                                                                                                                    • Think of a business as trade and have an exit strategy if it doesn’t work for X years or if you spend X amount.
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s takeaways

                                                                                                                    • When you get that wind of confidence and want to invest, take a step back and think things through.
                                                                                                                    • When you quit a job to start a business, you lose support and have to do it alone.
                                                                                                                    
                                                                                                                    

                                                                                                                    Actionable advice

                                                                                                                    Before you make any investment:

                                                                                                                    1. Think about your processes.
                                                                                                                    2. Consider your entry and exit position and treat everything with the same agnostic clinical approach.
                                                                                                                    3. Always have an exit strategy for when things don’t work out.
                                                                                                                    
                                                                                                                    

                                                                                                                    Paul’s recommendations

                                                                                                                    Recommended resources: The secret to not getting stressed over not finding ways to de-stress is to use fewer resources.

                                                                                                                    No.1 goal for the next 12 months

                                                                                                                    Paul’s number one goal for the next 12 months is to successfully roll out 30 in-person events in nine countries.

                                                                                                                    Parting words

                                                                                                                     

                                                                                                                    “I love this. I think it’s a great way to get people to seriously think about the benefits of failing.”

                                                                                                                    Paul Krake

                                                                                                                     

                                                                                                                    [spp-transcript]

                                                                                                                     

                                                                                                                    Connect with Paul Krake

                                                                                                                    • LinkedIn
                                                                                                                    • Website
                                                                                                                    • Podcast
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s books

                                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                    • My Worst Investment Ever
                                                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s online programs

                                                                                                                    • Valuation Master Class
                                                                                                                    • The Become a Better Investor Community
                                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                    • Finance Made Ridiculously Simple
                                                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                    • Achieve Your Goals
                                                                                                                    
                                                                                                                    

                                                                                                                    Connect with Andrew Stotz:

                                                                                                                    • astotz.com
                                                                                                                    • LinkedIn
                                                                                                                    • Facebook
                                                                                                                    • Instagram
                                                                                                                    • Twitter
                                                                                                                    • YouTube
                                                                                                                    • My Worst Investment Ever Podcast
                                                                                                                    
                                                                                                                    ]]>844946c6-6984-48b1-be76-03004c739ee9Wed, 03 May 2023 06:00:00 +070038:43falsefullPaul Krake is a global strategist focusing on mega themes of climate, China, digitization, and demographics.Noel Smith – Always Have Risk Measurements in PlaceBIO: Noel Smith is the Chief Investment Officer of Convex Asset Management and the Head of Options Trading at Tanius Technology. 

                                                                                                                    STORY: Noel and his partner invested in a stock whose price kept falling. Every time the price would fall, Goldman Sachs would come in and buy like 50,000 out of the money calls. This made the partners hold onto the stock, eventually riding it to zero.

                                                                                                                    LEARNING: Have risk measurements in place that you know you will not break. Have some percentage that you're willing to lose.

                                                                                                                    “Learning about options and how they affect the marketplace is much more important than you think."

                                                                                                                    Noel Smith

                                                                                                                    Guest profile

                                                                                                                    Noel Smith is the Chief Investment Officer of Convex Asset Management and the Head of Options Trading at Tanius Technology.  

                                                                                                                    A member of the CME, CBOT, and CBOE, Noel has over 25 years of experience trading volatility, market making, and managing risk.  

                                                                                                                    Noel was previously the CIO and Portfolio Manager of two separate Chicago-based proprietary derivatives trading firms. Additionally, he was the seed investor who financed the launch of global high-frequency trading firm GETCO LLC (KCG/Virtu), which grew to account for 20%+ of trading volume in the U.S.

                                                                                                                    Worst investment ever

                                                                                                                    Noel and his partner had a position in Enron, the ninth largest market cap company at the time. Enron started to lose money. Each time the stock would go down 10%, Goldman Sachs would come in and buy like 50,000 out of the money calls. Such stunts would convince people, Noel included, to hold onto the stock. And so the partners kept holding onto the stock as the price went up and down. Eventually, they rode the stock to zero, losing their entire investment. 

                                                                                                                    
                                                                                                                    

                                                                                                                    Lessons learned

                                                                                                                    • Have risk measurements in place that you know you will not break.
                                                                                                                    • Have some percentage that you're willing to lose.
                                                                                                                    
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew's takeaways

                                                                                                                    • A good investor has set up a structure of how to invest and doesn’t second guess the structure.
                                                                                                                    
                                                                                                                    
                                                                                                                    

                                                                                                                    Actionable advice

                                                                                                                    You always have to be able to see the cause and effect of everything.

                                                                                                                    
                                                                                                                    

                                                                                                                    Noel's recommendations

                                                                                                                    Noel recommends learning about options and how they affect the marketplace.

                                                                                                                    
                                                                                                                    

                                                                                                                    No.1 goal for the next 12 months

                                                                                                                    Noel's number one goal for the next 12 months is to develop his business and get more people to understand why options are useful and not to be afraid of them.

                                                                                                                    
                                                                                                                    

                                                                                                                    Parting words

                                                                                                                    “Thank you for having me today. Hopefully, everyone got something out of this.”

                                                                                                                    Noel Smith

                                                                                                                    
                                                                                                                    
                                                                                                                    

                                                                                                                    Connect with Noel Smith

                                                                                                                    • LinkedIn
                                                                                                                    • Website   
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s books 

                                                                                                                    ●     How to Start Building Your Wealth Investing in the Stock Market 

                                                                                                                    ●     My Worst Investment Ever 

                                                                                                                    ●     9 Valuation Mistakes and How to Avoid Them 

                                                                                                                    ●     Transform Your Business with Dr. Deming’s 14 Points 

                                                                                                                    Andrew’s online programs 

                                                                                                                    ●     Valuation Master Class 

                                                                                                                    ●     How to Start Building Your Wealth Investing in the Stock Market

                                                                                                                    ●     Finance Made Ridiculously Simple

                                                                                                                    ●     Become a Great Presenter and Increase Your Influence 

                                                                                                                    ●     Transform Your Business with Dr. Deming’s 14 Points  

                                                                                                                    Connect with Andrew Stotz 

                                                                                                                    ●     astotz.com 

                                                                                                                    ●     LinkedIn 

                                                                                                                    ●     Facebook 

                                                                                                                    ●     Instagram 

                                                                                                                    ●     Twitter 

                                                                                                                    ●     YouTube 

                                                                                                                    ●     My Worst Investment Ever Podcast 

                                                                                                                    ]]>BIO: Noel Smith is the Chief Investment Officer of Convex Asset Management and the Head of Options Trading at Tanius Technology. 

                                                                                                                    STORY: Noel and his partner invested in a stock whose price kept falling. Every time the price would fall, Goldman Sachs would come in and buy like 50,000 out of the money calls. This made the partners hold onto the stock, eventually riding it to zero.

                                                                                                                    LEARNING: Have risk measurements in place that you know you will not break. Have some percentage that you're willing to lose.

                                                                                                                    “Learning about options and how they affect the marketplace is much more important than you think."

                                                                                                                    Noel Smith

                                                                                                                    Guest profile

                                                                                                                    Noel Smith is the Chief Investment Officer of Convex Asset Management and the Head of Options Trading at Tanius Technology.  

                                                                                                                    A member of the CME, CBOT, and CBOE, Noel has over 25 years of experience trading volatility, market making, and managing risk.  

                                                                                                                    Noel was previously the CIO and Portfolio Manager of two separate Chicago-based proprietary derivatives trading firms. Additionally, he was the seed investor who financed the launch of global high-frequency trading firm GETCO LLC (KCG/Virtu), which grew to account for 20%+ of trading volume in the U.S.

                                                                                                                    Worst investment ever

                                                                                                                    Noel and his partner had a position in Enron, the ninth largest market cap company at the time. Enron started to lose money. Each time the stock would go down 10%, Goldman Sachs would come in and buy like 50,000 out of the money calls. Such stunts would convince people, Noel included, to hold onto the stock. And so the partners kept holding onto the stock as the price went up and down. Eventually, they rode the stock to zero, losing their entire investment. 

                                                                                                                    
                                                                                                                    

                                                                                                                    Lessons learned

                                                                                                                    • Have risk measurements in place that you know you will not break.
                                                                                                                    • Have some percentage that you're willing to lose.
                                                                                                                    
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew's takeaways

                                                                                                                    • A good investor has set up a structure of how to invest and doesn’t second guess the structure.
                                                                                                                    
                                                                                                                    
                                                                                                                    

                                                                                                                    Actionable advice

                                                                                                                    You always have to be able to see the cause and effect of everything.

                                                                                                                    
                                                                                                                    

                                                                                                                    Noel's recommendations

                                                                                                                    Noel recommends learning about options and how they affect the marketplace.

                                                                                                                    
                                                                                                                    

                                                                                                                    No.1 goal for the next 12 months

                                                                                                                    Noel's number one goal for the next 12 months is to develop his business and get more people to understand why options are useful and not to be afraid of them.

                                                                                                                    
                                                                                                                    

                                                                                                                    Parting words

                                                                                                                    “Thank you for having me today. Hopefully, everyone got something out of this.”

                                                                                                                    Noel Smith

                                                                                                                    
                                                                                                                    
                                                                                                                    

                                                                                                                    Connect with Noel Smith

                                                                                                                    • LinkedIn
                                                                                                                    • Website   
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s books 

                                                                                                                    ●     How to Start Building Your Wealth Investing in the Stock Market 

                                                                                                                    ●     My Worst Investment Ever 

                                                                                                                    ●     9 Valuation Mistakes and How to Avoid Them 

                                                                                                                    ●     Transform Your Business with Dr. Deming’s 14 Points 

                                                                                                                    Andrew’s online programs 

                                                                                                                    ●     Valuation Master Class 

                                                                                                                    ●     How to Start Building Your Wealth Investing in the Stock Market

                                                                                                                    ●     Finance Made Ridiculously Simple

                                                                                                                    ●     Become a Great Presenter and Increase Your Influence 

                                                                                                                    ●     Transform Your Business with Dr. Deming’s 14 Points  

                                                                                                                    Connect with Andrew Stotz 

                                                                                                                    ●     astotz.com 

                                                                                                                    ●     LinkedIn 

                                                                                                                    ●     Facebook 

                                                                                                                    ●     Instagram 

                                                                                                                    ●     Twitter 

                                                                                                                    ●     YouTube 

                                                                                                                    ●     My Worst Investment Ever Podcast 

                                                                                                                    ]]>80fc338a-37c8-4d0c-8dae-4b89449002edMon, 01 May 2023 06:00:00 +070030:42falsefullNoel Smith is the Chief Investment Officer of Convex Asset Management and the Head of Options Trading at Tanius Technology.ISMS 22: Toyota vs. EV Extremists – Who Is Right?What’s interesting about Toyota is that if you buy today, you get its future growth for free

                                                                                                                    The right time to buy might be now

                                                                                                                    
                                                                                                                    

                                                                                                                    ICE vehicles are not going away, providing ongoing revenue support

                                                                                                                    Toyota is the world’s largest car manufacturer, ranked by a composite of market cap, revenue, and employees. The company has been a leader in alternative energy solutions such as hybrids and hydrogen-powered vehicles. The prior president has said that the company will “not simply repeat the approach of other companies” when it comes to electric vehicles (EV). Toyota points out the limited battery range, scarcity of lithium resources, lack of a charging network, and consumer preferences towards internal combustion engines (ICE). And developing markets in South America, Asia, and Africa could be decades away from having the infrastructure to implement a massive EV rollout; Toyota is well positioned to grow with these markets. Over the next five years, we expect Toyota to return to its pre-pandemic average growth level and achieve a CAGR of 6.9%.

                                                                                                                    Hybrid and Hydrogen leadership and more EVs coming could prove critics wrong

                                                                                                                    Toyota is a pioneer in the mass production of hybrid technology, having rolled out its hybrid “Prius” model in 1997, since selling more than 5m. Currently, hybrids account for about 27% of total vehicle sales. Toyota is pushing ahead with hydrogen-powered cars, currently selling its “Mirai” model. The beaten-down share price is some evidence that observers expect the company’s hydrogen offerings will eventually fail. But there is promise to the technology, and an investor could consider Toyota’s hydrogen to have an option value. Of course, Toyota has not turned its back on EVs; recently, announcing plans to invest US$70bn in electrifying part of its fleet by 2030. We appreciate Toyota’s diversified approach to transition to more carbon-neutral cars and expect total CAPEX spending of about JPY12trn over the next few years.

                                                                                                                    Negative sentiment pressuring price; but at 1x PB, it might be the time to BUY

                                                                                                                    The sector is unfavorable given recession fears, as well, investors doubts Toyota’s unconventional EV policies and its ability to defend its position as the world’s largest carmaker. The company’s price-to-book ratio (PB) dropped below 1x, which is 1x std dev below its long-term average. With an average net margin of 7.8% over the past 5 years, Toyota is among the most profitable automobile companies in the world. We believe negative sentiment has been too punishing, and the stock deserves a re-rating.

                                                                                                                    FY3Q23 saw strong revenue growth

                                                                                                                    
                                                                                                                    

                                                                                                                    
                                                                                                                    

                                                                                                                    • Toyota’s 3Q23 revenue was up an impressive 25% YoY due to strong sales volume.
                                                                                                                    • The operating profit also grew by 22%, with the positive effect of higher sales volume more than offsetting soaring material prices.
                                                                                                                    • Though, the bottom line is slightly weaker YoY due to FOREX losses.
                                                                                                                    
                                                                                                                    

                                                                                                                    Revenue structure

                                                                                                                    
                                                                                                                    

                                                                                                                    
                                                                                                                    

                                                                                                                    • With 10.5m sold cars in 2022, Toyota remained the largest car manufacturer in the world. Its automotive segment, which accounts for 91% of revenue includes the production of passenger cars, commercial vehicles, and related parts.
                                                                                                                    • The company produces vehicles under four brands: Daihatsu, Hino, Lexus, and the namesake Toyota. Accounting for 85% of total automotive sales, Toyota was the best-selling brand.
                                                                                                                    • It derives 7% of its revenue from financial services. Compared to other car companies, this contribution is relatively low, meaning that Toyota generates most of its sales from its core segment of car production.
                                                                                                                    • Toyota gets its revenues from multiple geographic regions. In 2022, North America was the largest region in terms of revenue as it represented 35% of total revenue. Its domestic market Japan makes up 26%, followed by Asia (18%), and Europe (12%).
                                                                                                                    
                                                                                                                    

                                                                                                                    A. Stotz Four Elements

                                                                                                                    
                                                                                                                    

                                                                                                                    
                                                                                                                    

                                                                                                                    • Overall: Toyota is highly unappealing relative to 2,300 non-financial companies in Japan considering Fundamentals, Valuation, Momentum, and Risk.
                                                                                                                    • Fundamentals: Ranked in the bottom 30% in Japan due to low profitability driven by low margin and slow return on assets.
                                                                                                                    • Valuation: Neutral as it trades on considerably lower PE, and PB relative to other companies in the Japanese market but on higher EV/EBIT.
                                                                                                                    • Momentum: Moderately unattractive as both price and fundamental momentum are inconsistent and have not delivered convincing results.
                                                                                                                    • Risk: Toyota has a low current ratio and risky debt status, but consistently high times interest earned. Price risk measured in terms of beta is about the same as the Japanese market.
                                                                                                                    
                                                                                                                    

                                                                                                                    A. Stotz Profitable Growth

                                                                                                                    
                                                                                                                    

                                                                                                                    
                                                                                                                    

                                                                                                                    • Profitable Growth consistently ranked slightly below average among 930 large Consumer Discretionary companies globally. In the past 12 months, the ranking among its peers fell to #7 from #6 in 2022.
                                                                                                                    • Profitability shares a similar story, ranking at #6 for more than half the period. Growth has improved slightly since 2019 to #8 from #10 but can also be seen as continually dropping from #5 in 2020.
                                                                                                                    • Asset efficiency has ranked #9 since 2019 and constituted a heavy drag on Profitability. However, strong Expense control has been slightly effective in compensating for poor Asset efficiency. It has been the main driver of the overall Profitable Growth rank.
                                                                                                                    • Sales growth has ranked below average, however, in the past 12 months, it peaked at #4. Expense direction has been volatile; it dropped to #9 after a strong #2 rank in 2021.
                                                                                                                    
                                                                                                                    

                                                                                                                    Profit and loss statement

                                                                                                                    
                                                                                                                    

                                                                                                                    
                                                                                                                    

                                                                                                                    Balance sheet - Assets

                                                                                                                    
                                                                                                                    

                                                                                                                    
                                                                                                                    

                                                                                                                    Balance sheet - Liabilities and equity

                                                                                                                    
                                                                                                                    

                                                                                                                    
                                                                                                                    

                                                                                                                    Cash flow statement

                                                                                                                    
                                                                                                                    

                                                                                                                    
                                                                                                                    

                                                                                                                    Ratios

                                                                                                                    
                                                                                                                    

                                                                                                                    
                                                                                                                    

                                                                                                                    
                                                                                                                    

                                                                                                                    Consensus estimates

                                                                                                                    
                                                                                                                    

                                                                                                                    
                                                                                                                    

                                                                                                                    • Around 2/3 of analysts are bullish on Toyota, and only 1 analyst issued a SELL recommendation.
                                                                                                                    • The mean target price shows about a 21% upside.
                                                                                                                    • In general, analysts are most bullish on BYD, with 90% of analysts optimistic that the stock will outperform in the future. The average upside is 137%.
                                                                                                                    • The German car manufacturer Mercedes-Benz receives a similar positive sentiment, with around 80% of analysts issuing a BUY recommendation. They expect a solid upside of 32%
                                                                                                                    • US car giant Ford has the least favorable rating. 25% of analysts say it’s a SELL.
                                                                                                                    
                                                                                                                    

                                                                                                                    Relative valuation

                                                                                                                    
                                                                                                                    

                                                                                                                    
                                                                                                                    

                                                                                                                    • The trailing price-to-book ratio (PB) shows that Toyota is trading 1x std dev below its long-term average of 1.2x. And it has recently fallen below 1.0x.
                                                                                                                    • On the forward 2024E PB multiple, Toyota trades at a massive discount to the Consumer Discretionary sector in Japan. The gap between Asia and World is even higher, making Toyota appear cheap.
                                                                                                                    • I expect its return on equity (ROE) of 10% to be slightly above Japanese and Asian sector averages, which leads Toyota to trade at a deep discount based on the 2024E PB-to-ROE multiple.
                                                                                                                    • If we were to revalue Toyota to the 2024E PB-to-ROE multiple of Japan, the company would deserve to trade at a 2024E PB of 1.4x. This would lead to a value estimate of JPY3147, or 75% higher than the current share price. Based on that, Toyota seems to be massively undervalued.
                                                                                                                    • Though, we have chosen to use a DCF-based valuation to value Toyota.
                                                                                                                    
                                                                                                                    

                                                                                                                    Free cash flow data

                                                                                                                    
                                                                                                                    

                                                                                                                    
                                                                                                                    

                                                                                                                    Valuation and target price

                                                                                                                    
                                                                                                                    

                                                                                                                    
                                                                                                                    

                                                                                                                    • We assume a risk-free rate of 1% and a market equity risk premium for the Japanese market of 10% like its recent past.
                                                                                                                    • Toyota has been performing in line with the market; thus, we assume a beta of 1x. We forecast a capital structure with 44.6% debt to total capital, in line with the current level. This results in a WACC and a discount rate of 6.4%. We use a terminal growth rate of 1% and use Free Cash Flow to Firm (FCFF) to value Toyota.
                                                                                                                    • Our base case assumes a gross margin of 18.2% p.a. until 2027E, resulting in a value of JPY2,509 per share based on the FCFF methodology. A 40% upside compared to the current market price.
                                                                                                                    • In our sensitivity analysis (see next page), our optimistic case assumes a gross margin of 20.2 p.a. until 2027E. If Toyota were to deliver that target, the value derived from FCFF would be JPY2,802. In our pessimistic case, we look at if Toyota’s gross margin were only 16.2% per year. Then the value would be JPY2,214 per share, which still allows for plenty of upside.
                                                                                                                    
                                                                                                                    

                                                                                                                    Sensitivity analysis

                                                                                                                    
                                                                                                                    

                                                                                                                    
                                                                                                                    

                                                                                                                    Main risk is the failure to adapt to the industry trends

                                                                                                                    
                                                                                                                    

                                                                                                                    Failure to adapt to the industry trends

                                                                                                                    We built our forecast around the fact that Toyota’s decision to delay the full shift to EVs is a wise decision and also around the fact that it would be successful in its endeavors toward hybrids, electric, and hydrogen fuel cars. Any sudden change in consumer preferences would hurt the company’s short-term results. Also, any failure in the production of its new hybrid, electric, or hydrogen fuel cars would hurt the...]]>What’s interesting about Toyota is that if you buy today, you get its future growth for free

                                                                                                                    The right time to buy might be now

                                                                                                                    
                                                                                                                    

                                                                                                                    ICE vehicles are not going away, providing ongoing revenue support

                                                                                                                    Toyota is the world’s largest car manufacturer, ranked by a composite of market cap, revenue, and employees. The company has been a leader in alternative energy solutions such as hybrids and hydrogen-powered vehicles. The prior president has said that the company will “not simply repeat the approach of other companies” when it comes to electric vehicles (EV). Toyota points out the limited battery range, scarcity of lithium resources, lack of a charging network, and consumer preferences towards internal combustion engines (ICE). And developing markets in South America, Asia, and Africa could be decades away from having the infrastructure to implement a massive EV rollout; Toyota is well positioned to grow with these markets. Over the next five years, we expect Toyota to return to its pre-pandemic average growth level and achieve a CAGR of 6.9%.

                                                                                                                    Hybrid and Hydrogen leadership and more EVs coming could prove critics wrong

                                                                                                                    Toyota is a pioneer in the mass production of hybrid technology, having rolled out its hybrid “Prius” model in 1997, since selling more than 5m. Currently, hybrids account for about 27% of total vehicle sales. Toyota is pushing ahead with hydrogen-powered cars, currently selling its “Mirai” model. The beaten-down share price is some evidence that observers expect the company’s hydrogen offerings will eventually fail. But there is promise to the technology, and an investor could consider Toyota’s hydrogen to have an option value. Of course, Toyota has not turned its back on EVs; recently, announcing plans to invest US$70bn in electrifying part of its fleet by 2030. We appreciate Toyota’s diversified approach to transition to more carbon-neutral cars and expect total CAPEX spending of about JPY12trn over the next few years.

                                                                                                                    Negative sentiment pressuring price; but at 1x PB, it might be the time to BUY

                                                                                                                    The sector is unfavorable given recession fears, as well, investors doubts Toyota’s unconventional EV policies and its ability to defend its position as the world’s largest carmaker. The company’s price-to-book ratio (PB) dropped below 1x, which is 1x std dev below its long-term average. With an average net margin of 7.8% over the past 5 years, Toyota is among the most profitable automobile companies in the world. We believe negative sentiment has been too punishing, and the stock deserves a re-rating.

                                                                                                                    FY3Q23 saw strong revenue growth

                                                                                                                    
                                                                                                                    

                                                                                                                    
                                                                                                                    

                                                                                                                    • Toyota’s 3Q23 revenue was up an impressive 25% YoY due to strong sales volume.
                                                                                                                    • The operating profit also grew by 22%, with the positive effect of higher sales volume more than offsetting soaring material prices.
                                                                                                                    • Though, the bottom line is slightly weaker YoY due to FOREX losses.
                                                                                                                    
                                                                                                                    

                                                                                                                    Revenue structure

                                                                                                                    
                                                                                                                    

                                                                                                                    
                                                                                                                    

                                                                                                                    • With 10.5m sold cars in 2022, Toyota remained the largest car manufacturer in the world. Its automotive segment, which accounts for 91% of revenue includes the production of passenger cars, commercial vehicles, and related parts.
                                                                                                                    • The company produces vehicles under four brands: Daihatsu, Hino, Lexus, and the namesake Toyota. Accounting for 85% of total automotive sales, Toyota was the best-selling brand.
                                                                                                                    • It derives 7% of its revenue from financial services. Compared to other car companies, this contribution is relatively low, meaning that Toyota generates most of its sales from its core segment of car production.
                                                                                                                    • Toyota gets its revenues from multiple geographic regions. In 2022, North America was the largest region in terms of revenue as it represented 35% of total revenue. Its domestic market Japan makes up 26%, followed by Asia (18%), and Europe (12%).
                                                                                                                    
                                                                                                                    

                                                                                                                    A. Stotz Four Elements

                                                                                                                    
                                                                                                                    

                                                                                                                    
                                                                                                                    

                                                                                                                    • Overall: Toyota is highly unappealing relative to 2,300 non-financial companies in Japan considering Fundamentals, Valuation, Momentum, and Risk.
                                                                                                                    • Fundamentals: Ranked in the bottom 30% in Japan due to low profitability driven by low margin and slow return on assets.
                                                                                                                    • Valuation: Neutral as it trades on considerably lower PE, and PB relative to other companies in the Japanese market but on higher EV/EBIT.
                                                                                                                    • Momentum: Moderately unattractive as both price and fundamental momentum are inconsistent and have not delivered convincing results.
                                                                                                                    • Risk: Toyota has a low current ratio and risky debt status, but consistently high times interest earned. Price risk measured in terms of beta is about the same as the Japanese market.
                                                                                                                    
                                                                                                                    

                                                                                                                    A. Stotz Profitable Growth

                                                                                                                    
                                                                                                                    

                                                                                                                    
                                                                                                                    

                                                                                                                    • Profitable Growth consistently ranked slightly below average among 930 large Consumer Discretionary companies globally. In the past 12 months, the ranking among its peers fell to #7 from #6 in 2022.
                                                                                                                    • Profitability shares a similar story, ranking at #6 for more than half the period. Growth has improved slightly since 2019 to #8 from #10 but can also be seen as continually dropping from #5 in 2020.
                                                                                                                    • Asset efficiency has ranked #9 since 2019 and constituted a heavy drag on Profitability. However, strong Expense control has been slightly effective in compensating for poor Asset efficiency. It has been the main driver of the overall Profitable Growth rank.
                                                                                                                    • Sales growth has ranked below average, however, in the past 12 months, it peaked at #4. Expense direction has been volatile; it dropped to #9 after a strong #2 rank in 2021.
                                                                                                                    
                                                                                                                    

                                                                                                                    Profit and loss statement

                                                                                                                    
                                                                                                                    

                                                                                                                    
                                                                                                                    

                                                                                                                    Balance sheet - Assets

                                                                                                                    
                                                                                                                    

                                                                                                                    
                                                                                                                    

                                                                                                                    Balance sheet - Liabilities and equity

                                                                                                                    
                                                                                                                    

                                                                                                                    
                                                                                                                    

                                                                                                                    Cash flow statement

                                                                                                                    
                                                                                                                    

                                                                                                                    
                                                                                                                    

                                                                                                                    Ratios

                                                                                                                    
                                                                                                                    

                                                                                                                    
                                                                                                                    

                                                                                                                    
                                                                                                                    

                                                                                                                    Consensus estimates

                                                                                                                    
                                                                                                                    

                                                                                                                    
                                                                                                                    

                                                                                                                    • Around 2/3 of analysts are bullish on Toyota, and only 1 analyst issued a SELL recommendation.
                                                                                                                    • The mean target price shows about a 21% upside.
                                                                                                                    • In general, analysts are most bullish on BYD, with 90% of analysts optimistic that the stock will outperform in the future. The average upside is 137%.
                                                                                                                    • The German car manufacturer Mercedes-Benz receives a similar positive sentiment, with around 80% of analysts issuing a BUY recommendation. They expect a solid upside of 32%
                                                                                                                    • US car giant Ford has the least favorable rating. 25% of analysts say it’s a SELL.
                                                                                                                    
                                                                                                                    

                                                                                                                    Relative valuation

                                                                                                                    
                                                                                                                    

                                                                                                                    
                                                                                                                    

                                                                                                                    • The trailing price-to-book ratio (PB) shows that Toyota is trading 1x std dev below its long-term average of 1.2x. And it has recently fallen below 1.0x.
                                                                                                                    • On the forward 2024E PB multiple, Toyota trades at a massive discount to the Consumer Discretionary sector in Japan. The gap between Asia and World is even higher, making Toyota appear cheap.
                                                                                                                    • I expect its return on equity (ROE) of 10% to be slightly above Japanese and Asian sector averages, which leads Toyota to trade at a deep discount based on the 2024E PB-to-ROE multiple.
                                                                                                                    • If we were to revalue Toyota to the 2024E PB-to-ROE multiple of Japan, the company would deserve to trade at a 2024E PB of 1.4x. This would lead to a value estimate of JPY3147, or 75% higher than the current share price. Based on that, Toyota seems to be massively undervalued.
                                                                                                                    • Though, we have chosen to use a DCF-based valuation to value Toyota.
                                                                                                                    
                                                                                                                    

                                                                                                                    Free cash flow data

                                                                                                                    
                                                                                                                    

                                                                                                                    
                                                                                                                    

                                                                                                                    Valuation and target price

                                                                                                                    
                                                                                                                    

                                                                                                                    
                                                                                                                    

                                                                                                                    • We assume a risk-free rate of 1% and a market equity risk premium for the Japanese market of 10% like its recent past.
                                                                                                                    • Toyota has been performing in line with the market; thus, we assume a beta of 1x. We forecast a capital structure with 44.6% debt to total capital, in line with the current level. This results in a WACC and a discount rate of 6.4%. We use a terminal growth rate of 1% and use Free Cash Flow to Firm (FCFF) to value Toyota.
                                                                                                                    • Our base case assumes a gross margin of 18.2% p.a. until 2027E, resulting in a value of JPY2,509 per share based on the FCFF methodology. A 40% upside compared to the current market price.
                                                                                                                    • In our sensitivity analysis (see next page), our optimistic case assumes a gross margin of 20.2 p.a. until 2027E. If Toyota were to deliver that target, the value derived from FCFF would be JPY2,802. In our pessimistic case, we look at if Toyota’s gross margin were only 16.2% per year. Then the value would be JPY2,214 per share, which still allows for plenty of upside.
                                                                                                                    
                                                                                                                    

                                                                                                                    Sensitivity analysis

                                                                                                                    
                                                                                                                    

                                                                                                                    
                                                                                                                    

                                                                                                                    Main risk is the failure to adapt to the industry trends

                                                                                                                    
                                                                                                                    

                                                                                                                    Failure to adapt to the industry trends

                                                                                                                    We built our forecast around the fact that Toyota’s decision to delay the full shift to EVs is a wise decision and also around the fact that it would be successful in its endeavors toward hybrids, electric, and hydrogen fuel cars. Any sudden change in consumer preferences would hurt the company’s short-term results. Also, any failure in the production of its new hybrid, electric, or hydrogen fuel cars would hurt the automaker’s long-term results. Toyota recently offered to buy back its new electric SUV (BZ4X) from its owners because of a severe problem: the wheels could fall off while driving even after just a short time on the road! Anything like that would drag down our target price and affect the company’s position in the market.

                                                                                                                    Soaring raw material prices

                                                                                                                    Prices of raw materials such as cobalt, lithium, and nickel have surged. In May 2022, lithium prices were over seven times higher than at the start of 2021. Unprecedented battery demand and a lack of structural investment in new supply capacity are key factors. Russia’s invasion of Ukraine has created further pressure since Russia supplies 20% of global high-purity nickel. Also, China produces three-quarters of all lithium-ion batteries and is home to 70% of the production capacity for cathodes and 85% of the production capacity for anodes (both are key components of batteries), so if geopolitical tensions lasted long it would cause huge drops in the company’s margins and disruptions in its supply chain.

                                                                                                                    Concentration of suppliers

                                                                                                                    Automakers must rely on suppliers of cheaper raw materials to succeed in the automotive industry. But, Toyota depends on a limited number of suppliers, whose replacement with others may be difficult, exposing the company to a wide range of risks. Any loss of an important supplier or inability to obtain materials in a timely and cost-effective manner could lead to increased costs or delays in Toyota’s production and deliveries, which would hurt the company’s revenues and margins. Nonetheless, Toyota has managed to build great relationships with its suppliers which reduces the risk of losing them.

                                                                                                                     

                                                                                                                    Click here to get the PDF with all charts and graphs

                                                                                                                     

                                                                                                                    Andrew’s books

                                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                    • My Worst Investment Ever
                                                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s online programs

                                                                                                                    • Valuation Master Class
                                                                                                                    • The Become a Better Investor Community
                                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                    • Finance Made Ridiculously Simple
                                                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                    • Achieve Your Goals
                                                                                                                    
                                                                                                                    

                                                                                                                    Connect with Andrew Stotz:

                                                                                                                    • astotz.com
                                                                                                                    • LinkedIn
                                                                                                                    • Facebook
                                                                                                                    • Instagram
                                                                                                                    • Twitter
                                                                                                                    • YouTube
                                                                                                                    • My Worst Investment Ever Podcast
                                                                                                                    
                                                                                                                    

                                                                                                                    
                                                                                                                    

                                                                                                                    ]]>97bc471f-d4c7-4b48-b3ac-5226b74b5496Fri, 28 Apr 2023 06:00:00 +070012:57falsefullWhat’s interesting about Toyota is that if you buy today, you get its future growth for free. The right time to buy might be nowGuillermo Cornejo – Don’t Underestimate the Value of ExperienceBIO: Guillermo Cornejo is the CEO of Riders Share, the Airbnb of motorcycles he started while attending grad school at UCLA.

                                                                                                                    STORY: Guillermo had an insurance company handling claims for his customers. When he realized the insurance company had a 50% profit margin, he decided to start his own insurance business. This became a costly and challenging venture because he had no experience handling claims.

                                                                                                                    LEARNING: Don’t underestimate the value of experience.

                                                                                                                     

                                                                                                                    “Whenever somebody is talking to me about any industry, I'm all ears. I know I know nothing.”

                                                                                                                    Guillermo Cornejo

                                                                                                                     

                                                                                                                    Guest profile

                                                                                                                    Guillermo Cornejo is the CEO of Riders Share, the Airbnb of motorcycles he started while attending grad school at UCLA. Before that, he worked in analytics roles for GM, Nissan, and Hyundai. He grew up in Peru and enjoys anything that makes your heart race.

                                                                                                                    Worst investment ever

                                                                                                                    Guillermo launched his company in 2018, and it grew immensely. The company booked over a million dollars in rentals within the first year. Guillermo was on top of the world.

                                                                                                                    The company was working with an insurance partner with pretty good rates but was providing terrible service to Guillermo’s customers. It took many months to handle the claims. When Guillermo looked at his company’s history of accidents and measured the cost of paid-out claims and how much he had paid the insurance company in premiums. He found the insurance company was making a 50% margin in profits. This got Guillermo thinking he should do it himself.

                                                                                                                    Guillermo raised some capital and used most of it to set up an insurance company. This was an expensive venture (millions of dollars). The more the company grew, the more bad customers it attracted—from risk-takers to fraudsters trying to steal his motorcycles. On top of that, he realized how difficult it was to handle claims, and just like the insurance partner, it took him months to pay out claims.

                                                                                                                    Lessons learned

                                                                                                                    • Don’t underestimate the value of experience.
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s takeaways

                                                                                                                    • Don’t let overestimation bias mislead you into thinking you can do more than you’re capable of.
                                                                                                                    • Try to shift your mind from I think I know something to I know I know nothing.
                                                                                                                    
                                                                                                                    

                                                                                                                    Actionable advice

                                                                                                                    Don’t overestimate your skills, abilities, and knowledge. Work with advisors and connect with more experienced people who have done it before. They will help you understand how much you don’t know and then try to fill that gap.

                                                                                                                    Guillermo’s recommendations

                                                                                                                    Guillermo recommends reading Factfulness: Ten Reasons We’re Wrong About the World--and Why Things Are Better Than You Think, co-authored by a previous guest on our podcast, Anna Rosling Rönnlund.

                                                                                                                    No.1 goal for the next 12 months

                                                                                                                    Guillermo’s number one goal for the next 12 months is to double his company revenues while remaining profitable.

                                                                                                                     

                                                                                                                    [spp-transcript]

                                                                                                                     

                                                                                                                    Connect with Guillermo Cornejo

                                                                                                                    • LinkedIn
                                                                                                                    • Facebook
                                                                                                                    • Twitter
                                                                                                                    • Blog
                                                                                                                    • Website
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s books

                                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                    • My Worst Investment Ever
                                                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s online programs

                                                                                                                    • Valuation Master Class
                                                                                                                    • The Become a Better Investor Community
                                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                    • Finance Made Ridiculously Simple
                                                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                    • Achieve Your Goals
                                                                                                                    
                                                                                                                    

                                                                                                                    Connect with Andrew Stotz:

                                                                                                                    • astotz.com
                                                                                                                    • LinkedIn
                                                                                                                    • Facebook
                                                                                                                    • Instagram
                                                                                                                    • Twitter
                                                                                                                    • YouTube
                                                                                                                    • My Worst Investment Ever Podcast
                                                                                                                    
                                                                                                                    ]]>BIO: Guillermo Cornejo is the CEO of Riders Share, the Airbnb of motorcycles he started while attending grad school at UCLA.

                                                                                                                    STORY: Guillermo had an insurance company handling claims for his customers. When he realized the insurance company had a 50% profit margin, he decided to start his own insurance business. This became a costly and challenging venture because he had no experience handling claims.

                                                                                                                    LEARNING: Don’t underestimate the value of experience.

                                                                                                                     

                                                                                                                    “Whenever somebody is talking to me about any industry, I'm all ears. I know I know nothing.”

                                                                                                                    Guillermo Cornejo

                                                                                                                     

                                                                                                                    Guest profile

                                                                                                                    Guillermo Cornejo is the CEO of Riders Share, the Airbnb of motorcycles he started while attending grad school at UCLA. Before that, he worked in analytics roles for GM, Nissan, and Hyundai. He grew up in Peru and enjoys anything that makes your heart race.

                                                                                                                    Worst investment ever

                                                                                                                    Guillermo launched his company in 2018, and it grew immensely. The company booked over a million dollars in rentals within the first year. Guillermo was on top of the world.

                                                                                                                    The company was working with an insurance partner with pretty good rates but was providing terrible service to Guillermo’s customers. It took many months to handle the claims. When Guillermo looked at his company’s history of accidents and measured the cost of paid-out claims and how much he had paid the insurance company in premiums. He found the insurance company was making a 50% margin in profits. This got Guillermo thinking he should do it himself.

                                                                                                                    Guillermo raised some capital and used most of it to set up an insurance company. This was an expensive venture (millions of dollars). The more the company grew, the more bad customers it attracted—from risk-takers to fraudsters trying to steal his motorcycles. On top of that, he realized how difficult it was to handle claims, and just like the insurance partner, it took him months to pay out claims.

                                                                                                                    Lessons learned

                                                                                                                    • Don’t underestimate the value of experience.
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s takeaways

                                                                                                                    • Don’t let overestimation bias mislead you into thinking you can do more than you’re capable of.
                                                                                                                    • Try to shift your mind from I think I know something to I know I know nothing.
                                                                                                                    
                                                                                                                    

                                                                                                                    Actionable advice

                                                                                                                    Don’t overestimate your skills, abilities, and knowledge. Work with advisors and connect with more experienced people who have done it before. They will help you understand how much you don’t know and then try to fill that gap.

                                                                                                                    Guillermo’s recommendations

                                                                                                                    Guillermo recommends reading Factfulness: Ten Reasons We’re Wrong About the World--and Why Things Are Better Than You Think, co-authored by a previous guest on our podcast, Anna Rosling Rönnlund.

                                                                                                                    No.1 goal for the next 12 months

                                                                                                                    Guillermo’s number one goal for the next 12 months is to double his company revenues while remaining profitable.

                                                                                                                     

                                                                                                                    [spp-transcript]

                                                                                                                     

                                                                                                                    Connect with Guillermo Cornejo

                                                                                                                    • LinkedIn
                                                                                                                    • Facebook
                                                                                                                    • Twitter
                                                                                                                    • Blog
                                                                                                                    • Website
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s books

                                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                    • My Worst Investment Ever
                                                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s online programs

                                                                                                                    • Valuation Master Class
                                                                                                                    • The Become a Better Investor Community
                                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                    • Finance Made Ridiculously Simple
                                                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                    • Achieve Your Goals
                                                                                                                    
                                                                                                                    

                                                                                                                    Connect with Andrew Stotz:

                                                                                                                    • astotz.com
                                                                                                                    • LinkedIn
                                                                                                                    • Facebook
                                                                                                                    • Instagram
                                                                                                                    • Twitter
                                                                                                                    • YouTube
                                                                                                                    • My Worst Investment Ever Podcast
                                                                                                                    
                                                                                                                    ]]>05400da2-0b68-490f-bde2-65c67cf50c7eThu, 27 Apr 2023 06:00:00 +070017:31falsefullGuillermo Cornejo is the CEO of Riders Share, the Airbnb of motorcycles he started while attending grad school at UCLA.Eugene Ng – Keep Playing the Long-Term Game of InvestingBIO: Eugene Ng is the Founder and Chief Investment Officer of Vision Capital & Vision Capital Ventures. He is also the author of the Amazon best-selling book Vision Investing: How We Beat Wall Street & You Can, Too!

                                                                                                                    STORY: Eugene invested in a three-day course in a bid to accelerate investment learning. The course involved playing a simulated stock investment game. Eugene lost in the early stages of the game due to overconfidence.

                                                                                                                    LEARNING: It’s okay to make a mistake. Keep playing the long-term game of investing.

                                                                                                                     

                                                                                                                    “If you want to invest long term, avoid playing Russian roulette. You don’t want to be a hero and then end up in a cemetery sooner or later.”

                                                                                                                    Eugene Ng

                                                                                                                     

                                                                                                                    Guest profile

                                                                                                                    Eugene Ng is the Founder and Chief Investment Officer of Vision Capital & Vision Capital Ventures. He is also the author of the Amazon best-selling book Vision Investing: How We Beat Wall Street & You Can, Too! He also teaches investing once a year to educate new investors and to give back.

                                                                                                                    Born and raised in Singapore, Eugene studied economics and finance and received his Summa Cum Laude from the Singapore Management University in 2008.

                                                                                                                    Eugene’s career in finance spans over 11 years. His career started in 2008, joining Citi as a Management Associate for 3 years. Subsequently, he was with J.P. Morgan providing FX and Interest Rates sales & advisory for corporates for over 8 years, where he was a Vice-President.

                                                                                                                    Worst investment ever

                                                                                                                    Eugene had a near-death accident when he broke his neck almost ten years ago. While intoxicated, he decided to do a somersault into a very shallow swimming pool. Eugene broke the top of his head after hitting the bottom of the swimming pool. This type of injury is so severe that 99% of people who get it die, and of those who survive, 99% become paralyzed in some form or another.

                                                                                                                    After that near-death incident, Eugene got thinking about what to do with his life. Before the accident, he was living a meaningless life and just wasting his money. Being a reasonably logical, curious person, who is also fairly good at numbers, Eugene decided to look into investing. He had never even read an investing book. Now he wanted to master investing. Instead of reading books, taking time to figure it out, and making costly mistakes over a period, he took a different route to accelerate his learning. Eugene decided to pay for a three-day investing course.

                                                                                                                    The participants played a simulated stock investment game on the second day of the investing course. They were given five stocks to choose from, of which the financials were provided. They were to play this for ten rounds. A participant could decide to buy or sell each round. There was an additional advantage; a participant could take up to 10 times leverage on the limited amount of capital they had to buy the stocks.

                                                                                                                    Eugene believed he was brilliant, having been in finance and banking. So in round one, he chose three of the five companies, equally split them, and took the maximum leverage possible. So he took 10X his capital. The stock was 10% up, making Eugene one of the few winners of the 60 participants. Then the second round came, and the stock market was up again by 20%. Suddenly, Eugene was the top guy in his class due to his power of leverage. When round three came, a massive stock crash occurred due to a recession, and the market was down 50%. He was completely wiped out. As the game continued through ups and downs, there were just a handful of people left, and ultimately, only one was left.

                                                                                                                    While this was a simulated game, and Eugene didn’t lose anything in reality, the kick to his ego tore him apart mentally.

                                                                                                                    Lessons learned

                                                                                                                    • It’s okay to make a mistake, especially early on.
                                                                                                                    • Don’t use margin, leverage, or complicated derivatives, no matter how attractive they are.
                                                                                                                    • Don’t sell short.
                                                                                                                    • Keep playing the long-term game of investing.
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s takeaways

                                                                                                                    • Overconfidence bias will lead to poor investment decisions.
                                                                                                                    • There’s no point in playing a game with an unlimited downside.
                                                                                                                    
                                                                                                                    

                                                                                                                    Actionable advice

                                                                                                                    Avoid making the same mistakes that Eugene made.

                                                                                                                    Eugene’s recommendations

                                                                                                                    Eugene recommends reading his book Vision Investing: How We Beat Wall Street & You Can, Too!, where he shares his learnings and lessons so you can invest better and beat the market.

                                                                                                                    No.1 goal for the next 12 months

                                                                                                                    Eugene’s number one goal for the next 12 months is to start his journey of investing full-time. He wants to build a hedge fund and manage capital for others and himself.

                                                                                                                    Parting words

                                                                                                                     

                                                                                                                    “Figure out what game you want to play in investing. Do that well, and you’ll never be wiped out.”

                                                                                                                    Eugene Ng

                                                                                                                     

                                                                                                                    [spp-transcript]

                                                                                                                     

                                                                                                                    Connect with Eugene Ng

                                                                                                                    • LinkedIn
                                                                                                                    • Twitter
                                                                                                                    • Instagram
                                                                                                                    • Website
                                                                                                                    • Blog
                                                                                                                    • Book
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s books

                                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                    • My Worst Investment Ever
                                                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s online programs

                                                                                                                    • Valuation Master Class
                                                                                                                    • The Become a Better Investor Community
                                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                    • Finance Made Ridiculously Simple
                                                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                    • Achieve Your Goals
                                                                                                                    
                                                                                                                    

                                                                                                                    Connect with Andrew Stotz:

                                                                                                                    • astotz.com
                                                                                                                    • LinkedIn
                                                                                                                    • Facebook
                                                                                                                    • Instagram
                                                                                                                    • Twitter
                                                                                                                    • YouTube
                                                                                                                    • My Worst Investment Ever Podcast
                                                                                                                    
                                                                                                                    ]]>BIO: Eugene Ng is the Founder and Chief Investment Officer of Vision Capital & Vision Capital Ventures. He is also the author of the Amazon best-selling book Vision Investing: How We Beat Wall Street & You Can, Too!

                                                                                                                    STORY: Eugene invested in a three-day course in a bid to accelerate investment learning. The course involved playing a simulated stock investment game. Eugene lost in the early stages of the game due to overconfidence.

                                                                                                                    LEARNING: It’s okay to make a mistake. Keep playing the long-term game of investing.

                                                                                                                     

                                                                                                                    “If you want to invest long term, avoid playing Russian roulette. You don’t want to be a hero and then end up in a cemetery sooner or later.”

                                                                                                                    Eugene Ng

                                                                                                                     

                                                                                                                    Guest profile

                                                                                                                    Eugene Ng is the Founder and Chief Investment Officer of Vision Capital & Vision Capital Ventures. He is also the author of the Amazon best-selling book Vision Investing: How We Beat Wall Street & You Can, Too! He also teaches investing once a year to educate new investors and to give back.

                                                                                                                    Born and raised in Singapore, Eugene studied economics and finance and received his Summa Cum Laude from the Singapore Management University in 2008.

                                                                                                                    Eugene’s career in finance spans over 11 years. His career started in 2008, joining Citi as a Management Associate for 3 years. Subsequently, he was with J.P. Morgan providing FX and Interest Rates sales & advisory for corporates for over 8 years, where he was a Vice-President.

                                                                                                                    Worst investment ever

                                                                                                                    Eugene had a near-death accident when he broke his neck almost ten years ago. While intoxicated, he decided to do a somersault into a very shallow swimming pool. Eugene broke the top of his head after hitting the bottom of the swimming pool. This type of injury is so severe that 99% of people who get it die, and of those who survive, 99% become paralyzed in some form or another.

                                                                                                                    After that near-death incident, Eugene got thinking about what to do with his life. Before the accident, he was living a meaningless life and just wasting his money. Being a reasonably logical, curious person, who is also fairly good at numbers, Eugene decided to look into investing. He had never even read an investing book. Now he wanted to master investing. Instead of reading books, taking time to figure it out, and making costly mistakes over a period, he took a different route to accelerate his learning. Eugene decided to pay for a three-day investing course.

                                                                                                                    The participants played a simulated stock investment game on the second day of the investing course. They were given five stocks to choose from, of which the financials were provided. They were to play this for ten rounds. A participant could decide to buy or sell each round. There was an additional advantage; a participant could take up to 10 times leverage on the limited amount of capital they had to buy the stocks.

                                                                                                                    Eugene believed he was brilliant, having been in finance and banking. So in round one, he chose three of the five companies, equally split them, and took the maximum leverage possible. So he took 10X his capital. The stock was 10% up, making Eugene one of the few winners of the 60 participants. Then the second round came, and the stock market was up again by 20%. Suddenly, Eugene was the top guy in his class due to his power of leverage. When round three came, a massive stock crash occurred due to a recession, and the market was down 50%. He was completely wiped out. As the game continued through ups and downs, there were just a handful of people left, and ultimately, only one was left.

                                                                                                                    While this was a simulated game, and Eugene didn’t lose anything in reality, the kick to his ego tore him apart mentally.

                                                                                                                    Lessons learned

                                                                                                                    • It’s okay to make a mistake, especially early on.
                                                                                                                    • Don’t use margin, leverage, or complicated derivatives, no matter how attractive they are.
                                                                                                                    • Don’t sell short.
                                                                                                                    • Keep playing the long-term game of investing.
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s takeaways

                                                                                                                    • Overconfidence bias will lead to poor investment decisions.
                                                                                                                    • There’s no point in playing a game with an unlimited downside.
                                                                                                                    
                                                                                                                    

                                                                                                                    Actionable advice

                                                                                                                    Avoid making the same mistakes that Eugene made.

                                                                                                                    Eugene’s recommendations

                                                                                                                    Eugene recommends reading his book Vision Investing: How We Beat Wall Street & You Can, Too!, where he shares his learnings and lessons so you can invest better and beat the market.

                                                                                                                    No.1 goal for the next 12 months

                                                                                                                    Eugene’s number one goal for the next 12 months is to start his journey of investing full-time. He wants to build a hedge fund and manage capital for others and himself.

                                                                                                                    Parting words

                                                                                                                     

                                                                                                                    “Figure out what game you want to play in investing. Do that well, and you’ll never be wiped out.”

                                                                                                                    Eugene Ng

                                                                                                                     

                                                                                                                    [spp-transcript]

                                                                                                                     

                                                                                                                    Connect with Eugene Ng

                                                                                                                    • LinkedIn
                                                                                                                    • Twitter
                                                                                                                    • Instagram
                                                                                                                    • Website
                                                                                                                    • Blog
                                                                                                                    • Book
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s books

                                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                    • My Worst Investment Ever
                                                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s online programs

                                                                                                                    • Valuation Master Class
                                                                                                                    • The Become a Better Investor Community
                                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                    • Finance Made Ridiculously Simple
                                                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                    • Achieve Your Goals
                                                                                                                    
                                                                                                                    

                                                                                                                    Connect with Andrew Stotz:

                                                                                                                    • astotz.com
                                                                                                                    • LinkedIn
                                                                                                                    • Facebook
                                                                                                                    • Instagram
                                                                                                                    • Twitter
                                                                                                                    • YouTube
                                                                                                                    • My Worst Investment Ever Podcast
                                                                                                                    
                                                                                                                    ]]>972b858a-1f9e-4f4d-956b-6b7dfdd73783Wed, 26 Apr 2023 06:00:00 +070028:27falsefullEugene Ng is the Founder and Chief Investment Officer of Vision Capital & Vision Capital Ventures. He is also the author of the Amazon best-selling book Vision Investing: How We Beat Wall Street & You Can, Too!ISMS 21: CPI Collapsing Across the GlobeWill the global CPI slowdown continue?

                                                                                                                    Global Markets

                                                                                                                    Global CPI is falling fast in both DM and EMs

                                                                                                                    • Economies across the world have a GDP of about US$90trn and an average CPI of 6.2%
                                                                                                                    • DM CPI was 5.7%
                                                                                                                    • EM CPI was 6.9%
                                                                                                                    
                                                                                                                    

                                                                                                                    World CPI was 6.2%, down 0.4ppts from one year ago; MoM it was down 0.8ppts

                                                                                                                    • DM CPI was 5.7%, down 0.9ppts from one year ago; MoM it was down 0.8ppt
                                                                                                                    • It has moved from being in line with World CPI last year; to the current 0.5ppt discount
                                                                                                                    • EM CPI was 6.9%, which is about flat vs. one year ago; MoM it was down 0.8ppt
                                                                                                                    • It has moved from being in line with the World CPI last year; to the current 0.7ppt premium
                                                                                                                    
                                                                                                                    

                                                                                                                    Developed Regions

                                                                                                                    DM Americas CPI is falling fast, DM Europe is sliding, DM Asia is on a steady rise

                                                                                                                    • DM Americas is the largest, with US$25trn of GDP and 4.9% CPI
                                                                                                                    • DM Europe has US$14.9trn GDP and 7.1% CPI
                                                                                                                    • DM Pacific has US$7.6trn GPD and 4.7% CPI
                                                                                                                    
                                                                                                                    

                                                                                                                    DM Americas CPI is falling fast, DM Europe is sliding, DM Asia is on a steady rise

                                                                                                                    • DM Americas CPI was 4.9%, down 3.4ppts from one year ago; MoM it was down 1ppts.
                                                                                                                    • It has moved from a 1.7ppts premium to World CPI last year; to the current 1.3ppts discount
                                                                                                                    • DM Europe CPI was 7.1%, up 0.9ppts from one year ago; MoM it was down 1.1ppts.
                                                                                                                    • It has moved from a 0.5ppts discount to World CPI last year; to the current 0.9ppts premium
                                                                                                                    • DM Pacific CPI was 4.7%, up 2.4ppts from one year ago; MoM it was up 0.4ppts.
                                                                                                                    • It has moved from a 4.4ppts discount to World CPI last year; to the current 1.5ppts discount
                                                                                                                    
                                                                                                                    

                                                                                                                    Emerging Regions

                                                                                                                    EM Europe and Asia CPI falling; Middle East & Africa, and Frontier markets are still on fire

                                                                                                                    • EM Americas had a small GDP of US$3.8trn and CPI of 7%
                                                                                                                    • EM Asia had a massive GDP of US$25.7trn and 1.9% CPI
                                                                                                                    • EM Europe had a small US$3.9trn GDP and a massive 17.7% CPI
                                                                                                                    • Emerging Middle East & Africa had a tiny US$1.7trn GDP and a high 11.5% CPI
                                                                                                                    • Frontier markets had a US$2.9trn GDP and an extremely high 31.2% CPI
                                                                                                                    
                                                                                                                    

                                                                                                                    EM Europe and Asia CPI falling; Middle East & Africa, and Frontier markets are still on fire

                                                                                                                    • EM Americas CPI was 7%, down 2.4ppts from one year ago; MoM it was down 0.8ppts.
                                                                                                                    • It has moved from a 2.6ppts premium to World CPI last year; to the current 0.7ppts premium
                                                                                                                    • EM Asia CPI was 1.9%, down 0.6ppts from one year ago; MoM it was down 0.4ppts.
                                                                                                                    • It has moved from a 4.1ppts discount to World CPI last year; to the current 4.3ppts discount
                                                                                                                    • EM Europe CPI was 17.7%, down 6.1ppts from one year ago; MoM it was down 5ppts.
                                                                                                                    • It has moved from a 17.1ppts premium to World CPI last year; to the current 11.4ppts premium
                                                                                                                    • EM ME&A CPI was 11.5%, up 6.4ppts from one year ago; MoM it was up 0.4ppts.
                                                                                                                    • It has moved from a 1.5ppts discount to World CPI last year; to the current 5.3ppts premium
                                                                                                                    • Frontier CPI was 31.2%, up 14.7ppts from 1yr ago; MoM up 0.3ppts
                                                                                                                    • It has moved from a 9.9ppts premium to World CPI last year; to the current 25ppts premium. This region was up YoY and MoM
                                                                                                                    
                                                                                                                    

                                                                                                                    Developed Countries

                                                                                                                    Only US CPI fell YoY; all top 5 DM countries, except Japan, fell MoM; UK CPI is double the US

                                                                                                                    • Top five DM countries
                                                                                                                    • US GDP was US$23trn, CPI of 5.0%
                                                                                                                    • Japan US$4.9trn and 3.9% CPI
                                                                                                                    • Germany US$4.2trn and 7.5% CPI
                                                                                                                    • UK: US$3.2trn, 10.2%
                                                                                                                    • France: US$2.9trn/5.8%
                                                                                                                    • USA CPI was 5%, down 3.5ppts from one year ago; MoM it was down 1ppts.
                                                                                                                    • It has moved from a 1.8ppts premium to World CPI last year; to the current 1.2ppts discount
                                                                                                                    • Japan CPI was 3.9%, up 2.7ppts from one year ago; MoM it was up 0.6ppts.
                                                                                                                    • It has moved from a 5.5ppts discount to World CPI last year; to the current 2.3ppts discount
                                                                                                                    • Germany CPI was 7.5%, up 1.9ppts from one year ago; MoM it was down 1.3ppts.
                                                                                                                    • It has moved from a 1.1ppts discount to World CPI last year; to the current 1.3ppts premium
                                                                                                                    • UK CPI was 10.2%, up 3.1ppts from one year ago; MoM it was down 0.4ppts.
                                                                                                                    • It has moved from a 0.4ppts premium to World CPI last year; to the current 4ppts premium
                                                                                                                    • France CPI was 5.8%, up 1.3ppts from one year ago; MoM it was down 0.6ppts.
                                                                                                                    • It has moved from a 2.1ppts discount to World CPI last year; to the current 0.4ppts discount
                                                                                                                    
                                                                                                                    

                                                                                                                    Emerging Countries

                                                                                                                    Big CPI fall in Russia, China, and India; more minor falls in Korea and Brazil

                                                                                                                    • China: US$17.5trn/0.6%
                                                                                                                    • India: US$3.2trn/5.6%
                                                                                                                    • Korea: US$1.8trn/4.3%
                                                                                                                    • Russia: US$1.8trn/3.6%
                                                                                                                    • Brazil: US$1.6trn/4.7%
                                                                                                                    • China CPI was 0.6%, down 0.9ppts from one year ago; MoM it was down 0.3ppts.
                                                                                                                    • It has moved from a 5.2ppts discount to World CPI last year; to the current 5.6ppts discount
                                                                                                                    • India CPI was 5.6%, down 1.5ppts from one year ago; MoM it was down 0.8ppts.
                                                                                                                    • It has moved from a 0.4ppts premium to World CPI last year; to the current 0.6ppts discount
                                                                                                                    • Korea CPI was 4.3%, up 0.2ppts from one year ago; MoM it was down 0.6ppts.
                                                                                                                    • It has moved from a 2.6ppts discount to World CPI last year; to the current 2ppts discount
                                                                                                                    • Russia CPI was 3.6%, down 12.9ppts from one year ago; MoM it was down 7.5ppts.
                                                                                                                    • It has moved from a 9.8ppts premium to World CPI last year; to the current 2.7ppts discount
                                                                                                                    • Brazil CPI was 4.7%, down 6.5ppts from one year ago; MoM it was down 0.9ppts.
                                                                                                                    • It has moved from a 4.5ppts premium to World CPI last year; to the current 1.6ppts discount
                                                                                                                    
                                                                                                                    

                                                                                                                     

                                                                                                                    Click here to get the PDF with all charts and graphs

                                                                                                                     

                                                                                                                    Andrew’s books

                                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                    • My Worst Investment Ever
                                                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s online programs

                                                                                                                    • Valuation Master Class
                                                                                                                    • The Become a Better Investor Community
                                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                    • Finance Made Ridiculously Simple
                                                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                    • Achieve Your Goals
                                                                                                                    
                                                                                                                    

                                                                                                                    Connect with Andrew Stotz:

                                                                                                                    • astotz.com
                                                                                                                    • LinkedIn
                                                                                                                    • Facebook
                                                                                                                    • Instagram
                                                                                                                    • Twitter
                                                                                                                    • YouTube
                                                                                                                    • My Worst Investment Ever Podcast
                                                                                                                    
                                                                                                                    ]]>Will the global CPI slowdown continue?

                                                                                                                    Global Markets

                                                                                                                    Global CPI is falling fast in both DM and EMs

                                                                                                                    • Economies across the world have a GDP of about US$90trn and an average CPI of 6.2%
                                                                                                                    • DM CPI was 5.7%
                                                                                                                    • EM CPI was 6.9%
                                                                                                                    
                                                                                                                    

                                                                                                                    World CPI was 6.2%, down 0.4ppts from one year ago; MoM it was down 0.8ppts

                                                                                                                    • DM CPI was 5.7%, down 0.9ppts from one year ago; MoM it was down 0.8ppt
                                                                                                                    • It has moved from being in line with World CPI last year; to the current 0.5ppt discount
                                                                                                                    • EM CPI was 6.9%, which is about flat vs. one year ago; MoM it was down 0.8ppt
                                                                                                                    • It has moved from being in line with the World CPI last year; to the current 0.7ppt premium
                                                                                                                    
                                                                                                                    

                                                                                                                    Developed Regions

                                                                                                                    DM Americas CPI is falling fast, DM Europe is sliding, DM Asia is on a steady rise

                                                                                                                    • DM Americas is the largest, with US$25trn of GDP and 4.9% CPI
                                                                                                                    • DM Europe has US$14.9trn GDP and 7.1% CPI
                                                                                                                    • DM Pacific has US$7.6trn GPD and 4.7% CPI
                                                                                                                    
                                                                                                                    

                                                                                                                    DM Americas CPI is falling fast, DM Europe is sliding, DM Asia is on a steady rise

                                                                                                                    • DM Americas CPI was 4.9%, down 3.4ppts from one year ago; MoM it was down 1ppts.
                                                                                                                    • It has moved from a 1.7ppts premium to World CPI last year; to the current 1.3ppts discount
                                                                                                                    • DM Europe CPI was 7.1%, up 0.9ppts from one year ago; MoM it was down 1.1ppts.
                                                                                                                    • It has moved from a 0.5ppts discount to World CPI last year; to the current 0.9ppts premium
                                                                                                                    • DM Pacific CPI was 4.7%, up 2.4ppts from one year ago; MoM it was up 0.4ppts.
                                                                                                                    • It has moved from a 4.4ppts discount to World CPI last year; to the current 1.5ppts discount
                                                                                                                    
                                                                                                                    

                                                                                                                    Emerging Regions

                                                                                                                    EM Europe and Asia CPI falling; Middle East & Africa, and Frontier markets are still on fire

                                                                                                                    • EM Americas had a small GDP of US$3.8trn and CPI of 7%
                                                                                                                    • EM Asia had a massive GDP of US$25.7trn and 1.9% CPI
                                                                                                                    • EM Europe had a small US$3.9trn GDP and a massive 17.7% CPI
                                                                                                                    • Emerging Middle East & Africa had a tiny US$1.7trn GDP and a high 11.5% CPI
                                                                                                                    • Frontier markets had a US$2.9trn GDP and an extremely high 31.2% CPI
                                                                                                                    
                                                                                                                    

                                                                                                                    EM Europe and Asia CPI falling; Middle East & Africa, and Frontier markets are still on fire

                                                                                                                    • EM Americas CPI was 7%, down 2.4ppts from one year ago; MoM it was down 0.8ppts.
                                                                                                                    • It has moved from a 2.6ppts premium to World CPI last year; to the current 0.7ppts premium
                                                                                                                    • EM Asia CPI was 1.9%, down 0.6ppts from one year ago; MoM it was down 0.4ppts.
                                                                                                                    • It has moved from a 4.1ppts discount to World CPI last year; to the current 4.3ppts discount
                                                                                                                    • EM Europe CPI was 17.7%, down 6.1ppts from one year ago; MoM it was down 5ppts.
                                                                                                                    • It has moved from a 17.1ppts premium to World CPI last year; to the current 11.4ppts premium
                                                                                                                    • EM ME&A CPI was 11.5%, up 6.4ppts from one year ago; MoM it was up 0.4ppts.
                                                                                                                    • It has moved from a 1.5ppts discount to World CPI last year; to the current 5.3ppts premium
                                                                                                                    • Frontier CPI was 31.2%, up 14.7ppts from 1yr ago; MoM up 0.3ppts
                                                                                                                    • It has moved from a 9.9ppts premium to World CPI last year; to the current 25ppts premium. This region was up YoY and MoM
                                                                                                                    
                                                                                                                    

                                                                                                                    Developed Countries

                                                                                                                    Only US CPI fell YoY; all top 5 DM countries, except Japan, fell MoM; UK CPI is double the US

                                                                                                                    • Top five DM countries
                                                                                                                    • US GDP was US$23trn, CPI of 5.0%
                                                                                                                    • Japan US$4.9trn and 3.9% CPI
                                                                                                                    • Germany US$4.2trn and 7.5% CPI
                                                                                                                    • UK: US$3.2trn, 10.2%
                                                                                                                    • France: US$2.9trn/5.8%
                                                                                                                    • USA CPI was 5%, down 3.5ppts from one year ago; MoM it was down 1ppts.
                                                                                                                    • It has moved from a 1.8ppts premium to World CPI last year; to the current 1.2ppts discount
                                                                                                                    • Japan CPI was 3.9%, up 2.7ppts from one year ago; MoM it was up 0.6ppts.
                                                                                                                    • It has moved from a 5.5ppts discount to World CPI last year; to the current 2.3ppts discount
                                                                                                                    • Germany CPI was 7.5%, up 1.9ppts from one year ago; MoM it was down 1.3ppts.
                                                                                                                    • It has moved from a 1.1ppts discount to World CPI last year; to the current 1.3ppts premium
                                                                                                                    • UK CPI was 10.2%, up 3.1ppts from one year ago; MoM it was down 0.4ppts.
                                                                                                                    • It has moved from a 0.4ppts premium to World CPI last year; to the current 4ppts premium
                                                                                                                    • France CPI was 5.8%, up 1.3ppts from one year ago; MoM it was down 0.6ppts.
                                                                                                                    • It has moved from a 2.1ppts discount to World CPI last year; to the current 0.4ppts discount
                                                                                                                    
                                                                                                                    

                                                                                                                    Emerging Countries

                                                                                                                    Big CPI fall in Russia, China, and India; more minor falls in Korea and Brazil

                                                                                                                    • China: US$17.5trn/0.6%
                                                                                                                    • India: US$3.2trn/5.6%
                                                                                                                    • Korea: US$1.8trn/4.3%
                                                                                                                    • Russia: US$1.8trn/3.6%
                                                                                                                    • Brazil: US$1.6trn/4.7%
                                                                                                                    • China CPI was 0.6%, down 0.9ppts from one year ago; MoM it was down 0.3ppts.
                                                                                                                    • It has moved from a 5.2ppts discount to World CPI last year; to the current 5.6ppts discount
                                                                                                                    • India CPI was 5.6%, down 1.5ppts from one year ago; MoM it was down 0.8ppts.
                                                                                                                    • It has moved from a 0.4ppts premium to World CPI last year; to the current 0.6ppts discount
                                                                                                                    • Korea CPI was 4.3%, up 0.2ppts from one year ago; MoM it was down 0.6ppts.
                                                                                                                    • It has moved from a 2.6ppts discount to World CPI last year; to the current 2ppts discount
                                                                                                                    • Russia CPI was 3.6%, down 12.9ppts from one year ago; MoM it was down 7.5ppts.
                                                                                                                    • It has moved from a 9.8ppts premium to World CPI last year; to the current 2.7ppts discount
                                                                                                                    • Brazil CPI was 4.7%, down 6.5ppts from one year ago; MoM it was down 0.9ppts.
                                                                                                                    • It has moved from a 4.5ppts premium to World CPI last year; to the current 1.6ppts discount
                                                                                                                    
                                                                                                                    

                                                                                                                     

                                                                                                                    Click here to get the PDF with all charts and graphs

                                                                                                                     

                                                                                                                    Andrew’s books

                                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                    • My Worst Investment Ever
                                                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s online programs

                                                                                                                    • Valuation Master Class
                                                                                                                    • The Become a Better Investor Community
                                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                    • Finance Made Ridiculously Simple
                                                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                    • Achieve Your Goals
                                                                                                                    
                                                                                                                    

                                                                                                                    Connect with Andrew Stotz:

                                                                                                                    • astotz.com
                                                                                                                    • LinkedIn
                                                                                                                    • Facebook
                                                                                                                    • Instagram
                                                                                                                    • Twitter
                                                                                                                    • YouTube
                                                                                                                    • My Worst Investment Ever Podcast
                                                                                                                    
                                                                                                                    ]]>5dcdffc0-302f-4705-8405-154ccfcd0056Mon, 24 Apr 2023 06:15:00 +070019:11falsefullWill the global CPI slowdown continue?Nick Maggiulli – Don’t Buy Individual StocksBIO: Nick Maggiulli is the Chief Operating Officer and Data Scientist at Ritholtz Wealth Management, where he oversees operations across the firm and provides insights on business intelligence.

                                                                                                                    STORY: Nick invested in a stock he wasn’t familiar with just because his friends were doing it. He suffered a 78% loss.

                                                                                                                    LEARNING: Don’t buy individual stocks. Trust your gut.

                                                                                                                     

                                                                                                                    “If you’re going to gamble, just wager less.”

                                                                                                                    Nick Maggiulli

                                                                                                                     

                                                                                                                    Guest profile

                                                                                                                    Nick Maggiulli is the Chief Operating Officer and Data Scientist at Ritholtz Wealth Management, where he oversees operations across the firm and provides insights on business intelligence. He is also the author of OfDollarsAndData.com, a blog focused on the intersection of data and personal finance. His work has been featured in The Wall Street Journal, CNBC, and The Los Angeles Times. Nick graduated from Stanford University with a degree in Economics and currently resides in New York City.

                                                                                                                    Worst investment ever

                                                                                                                    It was the summer of 2021, and Nick was having a great night with some friends. One of his buddies, who’s pretty good at stock picking, told the group about this new exciting stock called Matterport (MTTR). Matterport is a virtual reality software that allows you to do 3D imaging of a room.

                                                                                                                    Up until this point, Nick had primarily been a passive investor. The friend convinced the group to invest in Matterport, saying it would be big. Nick put in about 1% of his net worth. The group didn’t do much research. They just discussed the stock in a group chat for a day or two. They didn’t pay attention to it anymore.

                                                                                                                    Over the next few months, the stock starts going up. Nick got excited about the surprising stock performance. He happened to attend an art show in New York. Coincidentally, the gallery was using Matterport to give a tour of their art venues. This was so wild and got Nick even more excited.

                                                                                                                    The stock kept going up, and by November 2021, it had doubled. Nick bought it for $15, and now it was $30. At this point, everyone in the friends’ group doubled their investment.

                                                                                                                    The peak was in November, and then the price started to decrease slightly. Nick figured it was no big deal, as every great winning stock has a decline. So he held onto the stock. The price kept going down. Nick sold his stock in October 2022 at $3.30 a share, making a 78% loss.

                                                                                                                    Lessons learned

                                                                                                                    • Don’t buy individual stocks.
                                                                                                                    • Trust your gut.
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s takeaways

                                                                                                                    • When you get invested in something, you’ll find every possible reason to justify it.
                                                                                                                    • There are a lot of times that we know stuff that we’re not supposed to do, yet we somehow end up in it.
                                                                                                                    
                                                                                                                    

                                                                                                                    Actionable advice

                                                                                                                    If you’re going to gamble, make sure you know exactly how much you’re willing to lose.

                                                                                                                    Nick’s recommendations

                                                                                                                    If you want to learn about individual stocks, Nick recommends reading Scale: The Universal Laws of Life, Growth, and Death in Organisms, Cities, and Companies. The book talks about the growth of cities, companies, and that type of stuff. To understand asset allocation, Nick recommends books by William Bernstein. He also recommends reading his book Just Keep Buying: Proven ways to save money and build your wealth if you want to learn the risks of investing in individual stocks.

                                                                                                                    No.1 goal for the next 12 months

                                                                                                                    Nick’s number one goal for the next 12 months is to expand his blog’s SEO traffic.

                                                                                                                    Parting words

                                                                                                                     

                                                                                                                    “Keep buying.”

                                                                                                                    Nick Maggiulli

                                                                                                                     

                                                                                                                    [spp-transcript]

                                                                                                                     

                                                                                                                    Connect with Nick Maggiulli

                                                                                                                    • LinkedIn
                                                                                                                    • Twitter
                                                                                                                    • Instagram
                                                                                                                    • Website
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s books

                                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                    • My Worst Investment Ever
                                                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s online programs

                                                                                                                    • Valuation Master Class
                                                                                                                    • The Become a Better Investor Community
                                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                    • Finance Made Ridiculously Simple
                                                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                    • Achieve Your Goals
                                                                                                                    
                                                                                                                    

                                                                                                                    Connect with Andrew Stotz:

                                                                                                                    • astotz.com
                                                                                                                    • LinkedIn
                                                                                                                    • Facebook
                                                                                                                    • Instagram
                                                                                                                    • Twitter
                                                                                                                    • YouTube
                                                                                                                    • My Worst Investment Ever Podcast
                                                                                                                    
                                                                                                                    ]]>BIO: Nick Maggiulli is the Chief Operating Officer and Data Scientist at Ritholtz Wealth Management, where he oversees operations across the firm and provides insights on business intelligence.

                                                                                                                    STORY: Nick invested in a stock he wasn’t familiar with just because his friends were doing it. He suffered a 78% loss.

                                                                                                                    LEARNING: Don’t buy individual stocks. Trust your gut.

                                                                                                                     

                                                                                                                    “If you’re going to gamble, just wager less.”

                                                                                                                    Nick Maggiulli

                                                                                                                     

                                                                                                                    Guest profile

                                                                                                                    Nick Maggiulli is the Chief Operating Officer and Data Scientist at Ritholtz Wealth Management, where he oversees operations across the firm and provides insights on business intelligence. He is also the author of OfDollarsAndData.com, a blog focused on the intersection of data and personal finance. His work has been featured in The Wall Street Journal, CNBC, and The Los Angeles Times. Nick graduated from Stanford University with a degree in Economics and currently resides in New York City.

                                                                                                                    Worst investment ever

                                                                                                                    It was the summer of 2021, and Nick was having a great night with some friends. One of his buddies, who’s pretty good at stock picking, told the group about this new exciting stock called Matterport (MTTR). Matterport is a virtual reality software that allows you to do 3D imaging of a room.

                                                                                                                    Up until this point, Nick had primarily been a passive investor. The friend convinced the group to invest in Matterport, saying it would be big. Nick put in about 1% of his net worth. The group didn’t do much research. They just discussed the stock in a group chat for a day or two. They didn’t pay attention to it anymore.

                                                                                                                    Over the next few months, the stock starts going up. Nick got excited about the surprising stock performance. He happened to attend an art show in New York. Coincidentally, the gallery was using Matterport to give a tour of their art venues. This was so wild and got Nick even more excited.

                                                                                                                    The stock kept going up, and by November 2021, it had doubled. Nick bought it for $15, and now it was $30. At this point, everyone in the friends’ group doubled their investment.

                                                                                                                    The peak was in November, and then the price started to decrease slightly. Nick figured it was no big deal, as every great winning stock has a decline. So he held onto the stock. The price kept going down. Nick sold his stock in October 2022 at $3.30 a share, making a 78% loss.

                                                                                                                    Lessons learned

                                                                                                                    • Don’t buy individual stocks.
                                                                                                                    • Trust your gut.
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s takeaways

                                                                                                                    • When you get invested in something, you’ll find every possible reason to justify it.
                                                                                                                    • There are a lot of times that we know stuff that we’re not supposed to do, yet we somehow end up in it.
                                                                                                                    
                                                                                                                    

                                                                                                                    Actionable advice

                                                                                                                    If you’re going to gamble, make sure you know exactly how much you’re willing to lose.

                                                                                                                    Nick’s recommendations

                                                                                                                    If you want to learn about individual stocks, Nick recommends reading Scale: The Universal Laws of Life, Growth, and Death in Organisms, Cities, and Companies. The book talks about the growth of cities, companies, and that type of stuff. To understand asset allocation, Nick recommends books by William Bernstein. He also recommends reading his book Just Keep Buying: Proven ways to save money and build your wealth if you want to learn the risks of investing in individual stocks.

                                                                                                                    No.1 goal for the next 12 months

                                                                                                                    Nick’s number one goal for the next 12 months is to expand his blog’s SEO traffic.

                                                                                                                    Parting words

                                                                                                                     

                                                                                                                    “Keep buying.”

                                                                                                                    Nick Maggiulli

                                                                                                                     

                                                                                                                    [spp-transcript]

                                                                                                                     

                                                                                                                    Connect with Nick Maggiulli

                                                                                                                    • LinkedIn
                                                                                                                    • Twitter
                                                                                                                    • Instagram
                                                                                                                    • Website
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s books

                                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                    • My Worst Investment Ever
                                                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s online programs

                                                                                                                    • Valuation Master Class
                                                                                                                    • The Become a Better Investor Community
                                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                    • Finance Made Ridiculously Simple
                                                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                    • Achieve Your Goals
                                                                                                                    
                                                                                                                    

                                                                                                                    Connect with Andrew Stotz:

                                                                                                                    • astotz.com
                                                                                                                    • LinkedIn
                                                                                                                    • Facebook
                                                                                                                    • Instagram
                                                                                                                    • Twitter
                                                                                                                    • YouTube
                                                                                                                    • My Worst Investment Ever Podcast
                                                                                                                    
                                                                                                                    ]]>65cb0c10-bf36-42c2-a7bb-d32a980860efMon, 24 Apr 2023 06:00:00 +070027:54falsefullNick Maggiulli is the Chief Operating Officer and Data Scientist at Ritholtz Wealth Management, where he oversees operations across the firm and provides insights on business intelligence.ISMS 20: Larry Swedroe – Do You Extrapolate From Small Samples and Trust Your Intuition?In this episode of Investment Strategy Made Simple (ISMS), Andrew and Larry discuss a chapter of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this third episode, they talk about mistake number three: Do you believe events are more predictable after the fact than before? And mistake number four: do you extrapolate from small samples and trust your intuition?

                                                                                                                    LEARNING: Know your investment history. Don’t be subjected to confirmation or recency biases.

                                                                                                                     

                                                                                                                    “The key to long-term success is having a deep understanding of history and not being subjected to recency bias.”

                                                                                                                    Larry Swedroe

                                                                                                                     

                                                                                                                    In today’s episode, Andrew continues his discussion with Larry Swedroe, head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                                                                    Larry deeply understands the world of academic research and investing, especially risk. Today Andrew and Larry discuss a chapter of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this third series, they talk about mistake number three: do you believe events are more predictable after the fact than before? And mistake number four: do you extrapolate from small samples and trust your intuition?

                                                                                                                    Missed out on previous mistakes? Check them out:

                                                                                                                    • ISMS 8: Investment Mistake No.1: Are You Overconfident in Your Skills?
                                                                                                                    • ISMS 17: Investment Mistake No.2: Do You Project Recent Trends Indefinitely Into the Future?
                                                                                                                    
                                                                                                                    

                                                                                                                    Mistake Number 3: Do you believe events are more predictable after the fact than before?

                                                                                                                    People often believe that events are more predictable before the fact than after. Larry says this is a big investment problem because it leads to overconfidence. After all, investors think they know what the outcome is.

                                                                                                                    To avoid making this mistake, Larry’s advice is not to act immediately because if you do, you’re likely acting based on irrational fears. You don’t know the investment history and have a confirmation bias. The cure for this bias of believing events are inevitable is to think before the fact when the events are far from certain, let alone inevitable.

                                                                                                                    Before you invest, Larry says you should keep a diary. Write down what you think will happen and compare it with the results after the fact. This analysis shows that you don’t know the future any better than anyone else. Your crystal ball is just as blurry. So don’t try to make forecasts based on your views because you think events are predictable.

                                                                                                                    Mistake Number 4: Do you extrapolate from small samples and trust your intuition?

                                                                                                                    People make investment judgments based on small samples, typically recent ones. For example, growth dramatically outperformed small-value stocks in 1997, 98, and 99 because of the Dotcom bubble.

                                                                                                                    So people judging by that small sample didn’t look at the long-term historical evidence, showing a 20% chance that growth will outperform small value over any three-year period. At five years, the likelihood drops to 15%. At 20 years, the chances of this happening are between 3% and zero. So there’s always a chance that growth will outperform small value, but the longer the period, the less likely it will happen.

                                                                                                                    Larry insists that you have to know your investment history. Whenever you see a small sample, look at the long-term data and remember that when investing in risk assets, three years is a very short time, and five years is still a pretty short time. You need much longer periods. The key to successful investing is not intelligence; it’s patience.

                                                                                                                    Final thoughts from Larry

                                                                                                                    Know your investment history and keep that diary every time you make a forecast.

                                                                                                                    About Larry Swedroe

                                                                                                                    Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                                                                    Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                                                                    Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                                                                    Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                                                                     

                                                                                                                    [spp-transcript]

                                                                                                                     

                                                                                                                    Connect with Larry Swedroe

                                                                                                                    • LinkedIn
                                                                                                                    • Twitter
                                                                                                                    • Website
                                                                                                                    • Books
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s books

                                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                    • My Worst Investment Ever
                                                                                                                    • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                    • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                    
                                                                                                                    

                                                                                                                    Andrew’s online programs

                                                                                                                    • Valuation Master Class
                                                                                                                    • The Become a Better Investor Community
                                                                                                                    • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                    • Finance Made Ridiculously Simple
                                                                                                                    • FVMR Investing: Quantamental Investing Across the World
                                                                                                                    • Become a Great Presenter and Increase Your Influence
                                                                                                                    • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                    • Achieve Your Goals
                                                                                                                    
                                                                                                                    

                                                                                                                    Connect with Andrew Stotz:

                                                                                                                    • astotz.com
                                                                                                                    • LinkedIn
                                                                                                                    • Facebook
                                                                                                                    • Instagram
                                                                                                                    • Twitter
                                                                                                                    • YouTube
                                                                                                                    • My Worst Investment Ever Podcast
                                                                                                                    
                                                                                                                    

                                                                                                                    Further reading mentioned

                                                                                                                    • Gary Belsky (January 2010), In this episode of Investment Strategy Made Simple (ISMS), Andrew and Larry discuss a chapter of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this third episode, they talk about mistake number three: Do you believe events are more predictable after the fact than before? And mistake number four: do you extrapolate from small samples and trust your intuition?

                                                                                                                      LEARNING: Know your investment history. Don’t be subjected to confirmation or recency biases.

                                                                                                                       

                                                                                                                      “The key to long-term success is having a deep understanding of history and not being subjected to recency bias.”

                                                                                                                      Larry Swedroe

                                                                                                                       

                                                                                                                      In today’s episode, Andrew continues his discussion with Larry Swedroe, head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                                                                      Larry deeply understands the world of academic research and investing, especially risk. Today Andrew and Larry discuss a chapter of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this third series, they talk about mistake number three: do you believe events are more predictable after the fact than before? And mistake number four: do you extrapolate from small samples and trust your intuition?

                                                                                                                      Missed out on previous mistakes? Check them out:

                                                                                                                      • ISMS 8: Investment Mistake No.1: Are You Overconfident in Your Skills?
                                                                                                                      • ISMS 17: Investment Mistake No.2: Do You Project Recent Trends Indefinitely Into the Future?
                                                                                                                      
                                                                                                                      

                                                                                                                      Mistake Number 3: Do you believe events are more predictable after the fact than before?

                                                                                                                      People often believe that events are more predictable before the fact than after. Larry says this is a big investment problem because it leads to overconfidence. After all, investors think they know what the outcome is.

                                                                                                                      To avoid making this mistake, Larry’s advice is not to act immediately because if you do, you’re likely acting based on irrational fears. You don’t know the investment history and have a confirmation bias. The cure for this bias of believing events are inevitable is to think before the fact when the events are far from certain, let alone inevitable.

                                                                                                                      Before you invest, Larry says you should keep a diary. Write down what you think will happen and compare it with the results after the fact. This analysis shows that you don’t know the future any better than anyone else. Your crystal ball is just as blurry. So don’t try to make forecasts based on your views because you think events are predictable.

                                                                                                                      Mistake Number 4: Do you extrapolate from small samples and trust your intuition?

                                                                                                                      People make investment judgments based on small samples, typically recent ones. For example, growth dramatically outperformed small-value stocks in 1997, 98, and 99 because of the Dotcom bubble.

                                                                                                                      So people judging by that small sample didn’t look at the long-term historical evidence, showing a 20% chance that growth will outperform small value over any three-year period. At five years, the likelihood drops to 15%. At 20 years, the chances of this happening are between 3% and zero. So there’s always a chance that growth will outperform small value, but the longer the period, the less likely it will happen.

                                                                                                                      Larry insists that you have to know your investment history. Whenever you see a small sample, look at the long-term data and remember that when investing in risk assets, three years is a very short time, and five years is still a pretty short time. You need much longer periods. The key to successful investing is not intelligence; it’s patience.

                                                                                                                      Final thoughts from Larry

                                                                                                                      Know your investment history and keep that diary every time you make a forecast.

                                                                                                                      About Larry Swedroe

                                                                                                                      Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                                                                      Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                                                                      Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                                                                      Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                                                                       

                                                                                                                      [spp-transcript]

                                                                                                                       

                                                                                                                      Connect with Larry Swedroe

                                                                                                                      • LinkedIn
                                                                                                                      • Twitter
                                                                                                                      • Website
                                                                                                                      • Books
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s books

                                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                      • My Worst Investment Ever
                                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s online programs

                                                                                                                      • Valuation Master Class
                                                                                                                      • The Become a Better Investor Community
                                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                      • Finance Made Ridiculously Simple
                                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                      • Achieve Your Goals
                                                                                                                      
                                                                                                                      

                                                                                                                      Connect with Andrew Stotz:

                                                                                                                      • astotz.com
                                                                                                                      • LinkedIn
                                                                                                                      • Facebook
                                                                                                                      • Instagram
                                                                                                                      • Twitter
                                                                                                                      • YouTube
                                                                                                                      • My Worst Investment Ever Podcast
                                                                                                                      
                                                                                                                      

                                                                                                                      Further reading mentioned

                                                                                                                      • Gary Belsky (January 2010), Why Smart People Make Big Money Mistakes and How to Correct Them: Lessons from the Life-Changing Science of Behavioral Economics
                                                                                                                      • Andrew L. Berkin and Larry E. Swedroe (October 2016), Your Complete Guide to Factor-Based Investing: The Way Smart Money Invests Today
                                                                                                                      • James O’Shaughnessy (November 2011), What Works on Wall Street, Fourth Edition: The Classic Guide to the Best-Performing Investment Strategies of All Time
                                                                                                                      
                                                                                                                      ]]>44f12ff8-8e82-4426-8531-8bc034fb82e6Fri, 21 Apr 2023 06:00:00 +070041:24falsefullIn this episode of Investment Strategy Made Simple (ISMS), Andrew and Larry discuss a chapter of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this third episode, they talk about mistake number three: Do you believe events are more predictable after the fact than before? And mistake number four: do you extrapolate from small samples and trust your intuition?Larry Shumbres – Invest in What You Know and Is RegulatedBIO: As an accomplished entrepreneur and respected leader in the fintech industry, Larry Shumbres’s mission is to continuously enhance the investing experience for both advisers and investors through innovative technology.

                                                                                                                      STORY: Larry tried to create a hedge fund, 50% tied to digital gold and 50% tied to the top five cryptocurrencies but faced so many setbacks in the process. He spent too much time and money on this venture, which never paid off.

                                                                                                                      LEARNING: Don’t try to build an investment product around an unregulated industry. Don’t invest in what you don’t know.

                                                                                                                       

                                                                                                                      “If you don’t know anything about private equity, derivatives, or options, don’t do it. First, learn how it works and then look to invest in it.”

                                                                                                                      Larry Shumbres

                                                                                                                       

                                                                                                                      Guest profile

                                                                                                                      As an accomplished entrepreneur and respected leader in the fintech industry, Larry Shumbres’s mission is to continuously enhance the investing experience for both advisers and investors through innovative technology. He is recognized as an industry expert and has over 20 years of fintech experience with companies such as Charles Schwab, Morningstar, and New York Life Investments.

                                                                                                                      Most recently, Larry founded, built, and exited Totum Risk, a leading risk tolerance platform for the financial industry, through its acquisition by TIFIN. Before Totum, Larry built SmartVision by eVestment, which was later acquired by Nasdaq. He also led the sales team at eMoney before its acquisition by Fidelity.

                                                                                                                      Worst investment ever

                                                                                                                      In 2017, Larry had the idea of building a hedge fund, 50% tied to digital gold and 50% to the top five cryptocurrencies based on market cap. He put a lot of time and money into it. Larry had another business partner that was also putting time and money into it. He even had some friends and family money tied into this venture.

                                                                                                                      Larry completed the private placement memorandum (PPM) to enable him to sell the product and have investors review it. Larry faced a couple of problems during this whole process. One, he didn’t have a track record. Two, he couldn’t sell the product in the United States. Three, it was impossible to distribute the product in other countries that had their own rules and regulations.

                                                                                                                      So after spending a lot of money on attorneys, consultants, rules and regulations, and licenses, it got to the point where it wasn’t worth it. So Larry shut it down and lost the money.

                                                                                                                      Lessons learned

                                                                                                                      • Don’t try to build an investment product or tool around an unregulated industry.
                                                                                                                      • Anything that the SEC hasn’t approved is a big risk.
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s takeaways

                                                                                                                      • Revenue is everything. As a startup, your number one goal is to get your revenue up as fast as possible.
                                                                                                                      
                                                                                                                      

                                                                                                                      Actionable advice

                                                                                                                      Whether you’re an entrepreneur or an investor, investing in what you know and what is regulated is wise.

                                                                                                                      Larry’s recommendations

                                                                                                                      To review any investments, Larry recommends going to large financial institutions like Schwab, Fidelity, Vanguard, JPMorgan, Chase, etc. Such institutions have a plethora of information to help you learn about investments. But more importantly, if you don’t have a passion for investments, Larry recommends partnering with a financial advisor to help you invest and plan for any life events and goals.

                                                                                                                      No.1 goal for the next 12 months

                                                                                                                      Larry’s number one goal for the next 12 months is profitability. The company is also planning to install its machine learning use cases in AI to widen its moat and be the leader in the industry.

                                                                                                                      Parting words

                                                                                                                       

                                                                                                                      “If you’re an advisor, check out Presults.com, and if you’re an investor, do your homework.”

                                                                                                                      Larry Shumbres

                                                                                                                       

                                                                                                                      [spp-transcript]

                                                                                                                       

                                                                                                                      Connect with Larry Shumbres

                                                                                                                      • LinkedIn
                                                                                                                      • Twitter
                                                                                                                      • Website
                                                                                                                      
                                                                                                                      

                                                                                                                      Connect with Vincent Deluard

                                                                                                                      • LinkedIn
                                                                                                                      • Twitter
                                                                                                                      • Website
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s books

                                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                      • My Worst Investment Ever
                                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s online programs

                                                                                                                      • Valuation Master Class
                                                                                                                      • The Become a Better Investor Community
                                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                      • Finance Made Ridiculously Simple
                                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                      • Achieve Your Goals
                                                                                                                      
                                                                                                                      

                                                                                                                      Connect with Andrew Stotz:

                                                                                                                      • astotz.com
                                                                                                                      • LinkedIn
                                                                                                                      • Facebook
                                                                                                                      • Instagram
                                                                                                                      • Twitter
                                                                                                                      • YouTube
                                                                                                                      • My Worst Investment Ever Podcast
                                                                                                                      
                                                                                                                      ]]>BIO: As an accomplished entrepreneur and respected leader in the fintech industry, Larry Shumbres’s mission is to continuously enhance the investing experience for both advisers and investors through innovative technology.

                                                                                                                      STORY: Larry tried to create a hedge fund, 50% tied to digital gold and 50% tied to the top five cryptocurrencies but faced so many setbacks in the process. He spent too much time and money on this venture, which never paid off.

                                                                                                                      LEARNING: Don’t try to build an investment product around an unregulated industry. Don’t invest in what you don’t know.

                                                                                                                       

                                                                                                                      “If you don’t know anything about private equity, derivatives, or options, don’t do it. First, learn how it works and then look to invest in it.”

                                                                                                                      Larry Shumbres

                                                                                                                       

                                                                                                                      Guest profile

                                                                                                                      As an accomplished entrepreneur and respected leader in the fintech industry, Larry Shumbres’s mission is to continuously enhance the investing experience for both advisers and investors through innovative technology. He is recognized as an industry expert and has over 20 years of fintech experience with companies such as Charles Schwab, Morningstar, and New York Life Investments.

                                                                                                                      Most recently, Larry founded, built, and exited Totum Risk, a leading risk tolerance platform for the financial industry, through its acquisition by TIFIN. Before Totum, Larry built SmartVision by eVestment, which was later acquired by Nasdaq. He also led the sales team at eMoney before its acquisition by Fidelity.

                                                                                                                      Worst investment ever

                                                                                                                      In 2017, Larry had the idea of building a hedge fund, 50% tied to digital gold and 50% to the top five cryptocurrencies based on market cap. He put a lot of time and money into it. Larry had another business partner that was also putting time and money into it. He even had some friends and family money tied into this venture.

                                                                                                                      Larry completed the private placement memorandum (PPM) to enable him to sell the product and have investors review it. Larry faced a couple of problems during this whole process. One, he didn’t have a track record. Two, he couldn’t sell the product in the United States. Three, it was impossible to distribute the product in other countries that had their own rules and regulations.

                                                                                                                      So after spending a lot of money on attorneys, consultants, rules and regulations, and licenses, it got to the point where it wasn’t worth it. So Larry shut it down and lost the money.

                                                                                                                      Lessons learned

                                                                                                                      • Don’t try to build an investment product or tool around an unregulated industry.
                                                                                                                      • Anything that the SEC hasn’t approved is a big risk.
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s takeaways

                                                                                                                      • Revenue is everything. As a startup, your number one goal is to get your revenue up as fast as possible.
                                                                                                                      
                                                                                                                      

                                                                                                                      Actionable advice

                                                                                                                      Whether you’re an entrepreneur or an investor, investing in what you know and what is regulated is wise.

                                                                                                                      Larry’s recommendations

                                                                                                                      To review any investments, Larry recommends going to large financial institutions like Schwab, Fidelity, Vanguard, JPMorgan, Chase, etc. Such institutions have a plethora of information to help you learn about investments. But more importantly, if you don’t have a passion for investments, Larry recommends partnering with a financial advisor to help you invest and plan for any life events and goals.

                                                                                                                      No.1 goal for the next 12 months

                                                                                                                      Larry’s number one goal for the next 12 months is profitability. The company is also planning to install its machine learning use cases in AI to widen its moat and be the leader in the industry.

                                                                                                                      Parting words

                                                                                                                       

                                                                                                                      “If you’re an advisor, check out Presults.com, and if you’re an investor, do your homework.”

                                                                                                                      Larry Shumbres

                                                                                                                       

                                                                                                                      [spp-transcript]

                                                                                                                       

                                                                                                                      Connect with Larry Shumbres

                                                                                                                      • LinkedIn
                                                                                                                      • Twitter
                                                                                                                      • Website
                                                                                                                      
                                                                                                                      

                                                                                                                      Connect with Vincent Deluard

                                                                                                                      • LinkedIn
                                                                                                                      • Twitter
                                                                                                                      • Website
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s books

                                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                      • My Worst Investment Ever
                                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s online programs

                                                                                                                      • Valuation Master Class
                                                                                                                      • The Become a Better Investor Community
                                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                      • Finance Made Ridiculously Simple
                                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                      • Achieve Your Goals
                                                                                                                      
                                                                                                                      

                                                                                                                      Connect with Andrew Stotz:

                                                                                                                      • astotz.com
                                                                                                                      • LinkedIn
                                                                                                                      • Facebook
                                                                                                                      • Instagram
                                                                                                                      • Twitter
                                                                                                                      • YouTube
                                                                                                                      • My Worst Investment Ever Podcast
                                                                                                                      
                                                                                                                      ]]>fd07be67-3865-4664-b563-c380d463ff40Thu, 20 Apr 2023 06:00:00 +070018:18falsefullAs an accomplished entrepreneur and respected leader in the fintech industry, Larry Shumbres’s mission is to continuously enhance the investing experience for both advisers and investors through innovative technology.Jesse Felder – Don’t Rationalize a Lousy TradeBIO: After starting his career at Bear Stearns and then co-founding a multi-billion-dollar hedge fund firm, Jesse Felder left Wall Street to focus his energies on research and writing. Today he publishes The Felder Report and hosts the Superinvestors podcast.

                                                                                                                      STORY: Jesse found a cigar butt stock that was cheap and performed extraordinarily well in just a few months after he took a pretty sizable position. A friend convinced him to hold the stock long-term instead of short-term as he had planned. Government legislation affected the business, and Jesse lost about 50% of his investment.

                                                                                                                      LEARNING: Don’t rationalize a bad trade; get out. Be very careful when you’re in a situation that’s being primed by the government.

                                                                                                                       

                                                                                                                      “When you’re in a situation that’s not working out as you would hope, rather than dig the hole deeper, move on and find something different.”

                                                                                                                      Jesse Felder

                                                                                                                       

                                                                                                                      Guest profile

                                                                                                                      After starting his career at Bear Stearns and then co-founding a multi-billion-dollar hedge fund firm, Jesse Felder left Wall Street to focus his energies on research and writing. Today he publishes The Felder Report and hosts the Superinvestors podcast.

                                                                                                                      Worst investment ever

                                                                                                                      About 10 years ago, Jesse came across an idea that seemed to tick all the boxes for a cheap stock. It looked really compelling. The company was Corinthian College, a for-profit college in the US. The company was a reputable business and had excellent profit margins. The stock was trading about three times the cash flow.

                                                                                                                      From a technical standpoint, the stock seemed like it would turn around positively, so Jesse took a pretty sizable position. The stock did nothing for the next couple of months. However, it took off the following year and doubled in a very short period. In fact, it went 150-200% up. All along, Jesse knew this was a cigar butt stock, and the plan was to hold it short-term.

                                                                                                                      One of Jesse’s friends, whom he was managing money for at the time, called him and said he’d never owned a stock that performed so well in such a short period. The friend asked Jesse to hold the stock for at least a year. Initially, Jesse wanted to take the profits. After his friend’s call, he rationalized why he should keep it longer. Jesse held on to it and kept monitoring it.

                                                                                                                      As time passed, it became clear that the Obama administration would limit for-profit colleges’ ability to offer government-subsidized student loans. This was essentially a death knell for these companies. If their students couldn’t get debt financing to pay tuition, they would go out of business because that was 90% of the people borrowing money to pay tuition. Jesse naively thought there was no way the government would put an entire industry segment out of business.

                                                                                                                      Jesse kept holding on to the stock and reinvested all of the gains. The stock went down about 50% below Jesse’s purchase price. He finally sold the stock before the company went out of business. This ended up being one of the worst losses that Jesse has taken as an investor.

                                                                                                                      Lessons learned

                                                                                                                      • Don’t let your thesis migrate. You need to remember why you bought something and always ask yourself if it’s working out how you anticipated it.
                                                                                                                      • Don’t rationalize a lousy trade; get out.
                                                                                                                      • Never underestimate the government’s willingness to put an entire industry out of business if it serves a political or economic purpose.
                                                                                                                      • Ego has no place in investing. It can be very dangerous.
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s takeaways

                                                                                                                      • Be very careful when you’re in a situation primed by the government, particularly in an industry where the potential customers are poor.
                                                                                                                      • Tax is not a good motivator for building a position.
                                                                                                                      
                                                                                                                      

                                                                                                                      Actionable advice

                                                                                                                      Learn to be proud of yourself for taking losses early. Focus on risk, and the gains will take care of themselves.

                                                                                                                      Jesse’s recommendations

                                                                                                                      Jesse recommends following him on Twitter, where he shares some of the most exciting things that he’s found, such as articles and charts.

                                                                                                                      No.1 goal for the next 12 months

                                                                                                                      Jesse’s number one goal for the next 12 months is to focus on what he loves to do. He’ll continue plugging away, put his best efforts forward, and whatever happens happens.

                                                                                                                      Parting words

                                                                                                                       

                                                                                                                      “This has been a lot of fun, and I really appreciate the opportunity. You made this very enjoyable.”

                                                                                                                      Jesse Felder

                                                                                                                       

                                                                                                                      [spp-transcript]

                                                                                                                       

                                                                                                                      Connect with Jesse Felder

                                                                                                                      • LinkedIn
                                                                                                                      • Twitter
                                                                                                                      • Blog
                                                                                                                      • Website
                                                                                                                      • Podcast
                                                                                                                      
                                                                                                                      

                                                                                                                      Connect with Vincent Deluard

                                                                                                                      • LinkedIn
                                                                                                                      • Twitter
                                                                                                                      • Website
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s books

                                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                      • My Worst Investment Ever
                                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s online programs

                                                                                                                      • Valuation Master Class
                                                                                                                      • The Become a Better Investor Community
                                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                      • Finance Made Ridiculously Simple
                                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                      • Achieve Your Goals
                                                                                                                      
                                                                                                                      

                                                                                                                      Connect with Andrew Stotz:

                                                                                                                      • astotz.com
                                                                                                                      • LinkedIn
                                                                                                                      • Facebook
                                                                                                                      • Instagram
                                                                                                                      • Twitter
                                                                                                                      • YouTube
                                                                                                                      • My Worst Investment Ever Podcast
                                                                                                                      
                                                                                                                      ]]>BIO: After starting his career at Bear Stearns and then co-founding a multi-billion-dollar hedge fund firm, Jesse Felder left Wall Street to focus his energies on research and writing. Today he publishes The Felder Report and hosts the Superinvestors podcast.

                                                                                                                      STORY: Jesse found a cigar butt stock that was cheap and performed extraordinarily well in just a few months after he took a pretty sizable position. A friend convinced him to hold the stock long-term instead of short-term as he had planned. Government legislation affected the business, and Jesse lost about 50% of his investment.

                                                                                                                      LEARNING: Don’t rationalize a bad trade; get out. Be very careful when you’re in a situation that’s being primed by the government.

                                                                                                                       

                                                                                                                      “When you’re in a situation that’s not working out as you would hope, rather than dig the hole deeper, move on and find something different.”

                                                                                                                      Jesse Felder

                                                                                                                       

                                                                                                                      Guest profile

                                                                                                                      After starting his career at Bear Stearns and then co-founding a multi-billion-dollar hedge fund firm, Jesse Felder left Wall Street to focus his energies on research and writing. Today he publishes The Felder Report and hosts the Superinvestors podcast.

                                                                                                                      Worst investment ever

                                                                                                                      About 10 years ago, Jesse came across an idea that seemed to tick all the boxes for a cheap stock. It looked really compelling. The company was Corinthian College, a for-profit college in the US. The company was a reputable business and had excellent profit margins. The stock was trading about three times the cash flow.

                                                                                                                      From a technical standpoint, the stock seemed like it would turn around positively, so Jesse took a pretty sizable position. The stock did nothing for the next couple of months. However, it took off the following year and doubled in a very short period. In fact, it went 150-200% up. All along, Jesse knew this was a cigar butt stock, and the plan was to hold it short-term.

                                                                                                                      One of Jesse’s friends, whom he was managing money for at the time, called him and said he’d never owned a stock that performed so well in such a short period. The friend asked Jesse to hold the stock for at least a year. Initially, Jesse wanted to take the profits. After his friend’s call, he rationalized why he should keep it longer. Jesse held on to it and kept monitoring it.

                                                                                                                      As time passed, it became clear that the Obama administration would limit for-profit colleges’ ability to offer government-subsidized student loans. This was essentially a death knell for these companies. If their students couldn’t get debt financing to pay tuition, they would go out of business because that was 90% of the people borrowing money to pay tuition. Jesse naively thought there was no way the government would put an entire industry segment out of business.

                                                                                                                      Jesse kept holding on to the stock and reinvested all of the gains. The stock went down about 50% below Jesse’s purchase price. He finally sold the stock before the company went out of business. This ended up being one of the worst losses that Jesse has taken as an investor.

                                                                                                                      Lessons learned

                                                                                                                      • Don’t let your thesis migrate. You need to remember why you bought something and always ask yourself if it’s working out how you anticipated it.
                                                                                                                      • Don’t rationalize a lousy trade; get out.
                                                                                                                      • Never underestimate the government’s willingness to put an entire industry out of business if it serves a political or economic purpose.
                                                                                                                      • Ego has no place in investing. It can be very dangerous.
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s takeaways

                                                                                                                      • Be very careful when you’re in a situation primed by the government, particularly in an industry where the potential customers are poor.
                                                                                                                      • Tax is not a good motivator for building a position.
                                                                                                                      
                                                                                                                      

                                                                                                                      Actionable advice

                                                                                                                      Learn to be proud of yourself for taking losses early. Focus on risk, and the gains will take care of themselves.

                                                                                                                      Jesse’s recommendations

                                                                                                                      Jesse recommends following him on Twitter, where he shares some of the most exciting things that he’s found, such as articles and charts.

                                                                                                                      No.1 goal for the next 12 months

                                                                                                                      Jesse’s number one goal for the next 12 months is to focus on what he loves to do. He’ll continue plugging away, put his best efforts forward, and whatever happens happens.

                                                                                                                      Parting words

                                                                                                                       

                                                                                                                      “This has been a lot of fun, and I really appreciate the opportunity. You made this very enjoyable.”

                                                                                                                      Jesse Felder

                                                                                                                       

                                                                                                                      [spp-transcript]

                                                                                                                       

                                                                                                                      Connect with Jesse Felder

                                                                                                                      • LinkedIn
                                                                                                                      • Twitter
                                                                                                                      • Blog
                                                                                                                      • Website
                                                                                                                      • Podcast
                                                                                                                      
                                                                                                                      

                                                                                                                      Connect with Vincent Deluard

                                                                                                                      • LinkedIn
                                                                                                                      • Twitter
                                                                                                                      • Website
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s books

                                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                      • My Worst Investment Ever
                                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s online programs

                                                                                                                      • Valuation Master Class
                                                                                                                      • The Become a Better Investor Community
                                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                      • Finance Made Ridiculously Simple
                                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                      • Achieve Your Goals
                                                                                                                      
                                                                                                                      

                                                                                                                      Connect with Andrew Stotz:

                                                                                                                      • astotz.com
                                                                                                                      • LinkedIn
                                                                                                                      • Facebook
                                                                                                                      • Instagram
                                                                                                                      • Twitter
                                                                                                                      • YouTube
                                                                                                                      • My Worst Investment Ever Podcast
                                                                                                                      
                                                                                                                      ]]>3aa2654b-ec78-4375-a289-06bd8f9fd717Wed, 19 Apr 2023 06:00:00 +070035:34falsefullAfter starting his career at Bear Stearns and then co-founding a multi-billion-dollar hedge fund firm, Jesse Felder left Wall Street to focus his energies on research and writing. Today he publishes The Felder Report and hosts the Superinvestors podcast.ISMS 19: 5% March 2023 CPI Could Fall to 4% By Year-End; If Oil Doesn’t FlyRemember that CPI is not inflation
                                                                                                                      • Mar 2023 US CPI was 5%, down from 6% in Feb and off its June 2022 peak of 9.1%
                                                                                                                      • Mar 2023, the food component was up 8.5% but has come off its Aug 2022 11.4% peak
                                                                                                                      • Mar 2023, the energy component was down 6.4, a massive fall from its 41.6% June 2022 peak
                                                                                                                      • In Mar 2023, all other items were flat MoM at 5.6%, down from Mar 2022 6.5% high
                                                                                                                      • Without a surge in oil US, we forecast CPI could end 2023 at 4%
                                                                                                                      
                                                                                                                      

                                                                                                                      Two things that could derail YE23 4% …

                                                                                                                      • An oil price surge would push end-2023 slightly higher than 4%, but only slightly because it takes a few months for an oil price rise to impact CPI
                                                                                                                      • A US recession could quickly bring CPI below 4%
                                                                                                                      
                                                                                                                      

                                                                                                                       

                                                                                                                      Click here to get the PDF with all charts and graphs

                                                                                                                       

                                                                                                                      Andrew’s books

                                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                      • My Worst Investment Ever
                                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s online programs

                                                                                                                      • Valuation Master Class
                                                                                                                      • The Become a Better Investor Community
                                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                      • Finance Made Ridiculously Simple
                                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                      • Achieve Your Goals
                                                                                                                      
                                                                                                                      

                                                                                                                      Connect with Andrew Stotz:

                                                                                                                      • astotz.com
                                                                                                                      • LinkedIn
                                                                                                                      • Facebook
                                                                                                                      • Instagram
                                                                                                                      • Twitter
                                                                                                                      • YouTube
                                                                                                                      • My Worst Investment Ever Podcast
                                                                                                                      
                                                                                                                      ]]>Remember that CPI is not inflation
                                                                                                                      • Mar 2023 US CPI was 5%, down from 6% in Feb and off its June 2022 peak of 9.1%
                                                                                                                      • Mar 2023, the food component was up 8.5% but has come off its Aug 2022 11.4% peak
                                                                                                                      • Mar 2023, the energy component was down 6.4, a massive fall from its 41.6% June 2022 peak
                                                                                                                      • In Mar 2023, all other items were flat MoM at 5.6%, down from Mar 2022 6.5% high
                                                                                                                      • Without a surge in oil US, we forecast CPI could end 2023 at 4%
                                                                                                                      
                                                                                                                      

                                                                                                                      Two things that could derail YE23 4% …

                                                                                                                      • An oil price surge would push end-2023 slightly higher than 4%, but only slightly because it takes a few months for an oil price rise to impact CPI
                                                                                                                      • A US recession could quickly bring CPI below 4%
                                                                                                                      
                                                                                                                      

                                                                                                                       

                                                                                                                      Click here to get the PDF with all charts and graphs

                                                                                                                       

                                                                                                                      Andrew’s books

                                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                      • My Worst Investment Ever
                                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s online programs

                                                                                                                      • Valuation Master Class
                                                                                                                      • The Become a Better Investor Community
                                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                      • Finance Made Ridiculously Simple
                                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                      • Achieve Your Goals
                                                                                                                      
                                                                                                                      

                                                                                                                      Connect with Andrew Stotz:

                                                                                                                      • astotz.com
                                                                                                                      • LinkedIn
                                                                                                                      • Facebook
                                                                                                                      • Instagram
                                                                                                                      • Twitter
                                                                                                                      • YouTube
                                                                                                                      • My Worst Investment Ever Podcast
                                                                                                                      
                                                                                                                      ]]>05c2f669-d284-4308-93f6-4b22e2db48beMon, 17 Apr 2023 06:15:00 +070032:02falsefullRemember that CPI is not inflationSachi Wickramage – Target the Customer With the Problem at ScaleBIO: Sachi Wickramage is the Co-founder, COO & CPO of i4T Global, a disruptive Field Service Management ecosystem.

                                                                                                                      STORY: Sachi and his partner created an app that they thought would solve a problem for suppliers. Turns out, the suppliers didn’t need the app at all.

                                                                                                                      LEARNING: Sometimes, you have to take a step back to take a step forward. Understand the moment of intent for each of your customer segments.

                                                                                                                       

                                                                                                                      “Understand the moment of intent for each of the segments of your customer base.”

                                                                                                                      Sachi Wickramage

                                                                                                                       

                                                                                                                      Guest profile

                                                                                                                      Sachi Wickramage is the Co-founder, COO & CPO of i4T Global, a disruptive Field Service Management ecosystem.

                                                                                                                      With a track record of co-founding multiple mobile-first startups, Sachi has taken his apps to over 1 million active users across various platforms worldwide.

                                                                                                                      Worst investment ever

                                                                                                                      When Sachi and his co-founder were building their Field Management Service app, they looked at the problem and figured the consumer in the ecosystem was the one facing the problem. But, they targeted the supplier. The goal was to provide the supplier with a better tech platform to provide better consumer visibility. One thing the partners did not identify at that time was that the suppliers were okay with the way they were operating their business because they knew they were a scarce resource.

                                                                                                                      Now the partners were in a fix. They couldn’t promote the app to the consumer because they needed a critical mass of suppliers on the app. When they tried to promote the app to the suppliers, their question was if there were already many customers who would give them more jobs.

                                                                                                                      The two partners had to step back, look at their model, and figure out who was the target audience with the problem at scale.

                                                                                                                      Lessons learned

                                                                                                                      • When building solutions, first figure out who is the target customer with the problem at scale.
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s takeaways

                                                                                                                      • Sometimes you have to take a step back to take a step forward.
                                                                                                                      
                                                                                                                      

                                                                                                                      Actionable advice

                                                                                                                      Wait for the moment of intent. Once the moment of intent arises, people are ready for your solution. But if you incorrectly identify the moment of intent, your solution becomes a disturbance because people don’t have a need at that time.

                                                                                                                      No.1 goal for the next 12 months

                                                                                                                      Sachi’s number one goal for the next 12 months is to expand beyond Australia to Europe and the US while staying true to his purpose.

                                                                                                                      Parting words

                                                                                                                       

                                                                                                                      “Define who you are and who you inspire.”

                                                                                                                      Sachi Wickramage

                                                                                                                       

                                                                                                                      [spp-transcript]

                                                                                                                       

                                                                                                                      Connect with Sachi Wickramage

                                                                                                                      • LinkedIn
                                                                                                                      • Facebook
                                                                                                                      • Twitter
                                                                                                                      • Instagram
                                                                                                                      • YouTube
                                                                                                                      • Blog
                                                                                                                      • Website
                                                                                                                      • Podcast
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s books

                                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                      • My Worst Investment Ever
                                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s online programs

                                                                                                                      • Valuation Master Class
                                                                                                                      • The Become a Better Investor Community
                                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                      • Finance Made Ridiculously Simple
                                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                      • Achieve Your Goals
                                                                                                                      
                                                                                                                      

                                                                                                                      Connect with Andrew Stotz:

                                                                                                                      • astotz.com
                                                                                                                      • LinkedIn
                                                                                                                      • Facebook
                                                                                                                      • Instagram
                                                                                                                      • Twitter
                                                                                                                      • YouTube
                                                                                                                      • My Worst Investment Ever Podcast
                                                                                                                      
                                                                                                                      ]]>BIO: Sachi Wickramage is the Co-founder, COO & CPO of i4T Global, a disruptive Field Service Management ecosystem.

                                                                                                                      STORY: Sachi and his partner created an app that they thought would solve a problem for suppliers. Turns out, the suppliers didn’t need the app at all.

                                                                                                                      LEARNING: Sometimes, you have to take a step back to take a step forward. Understand the moment of intent for each of your customer segments.

                                                                                                                       

                                                                                                                      “Understand the moment of intent for each of the segments of your customer base.”

                                                                                                                      Sachi Wickramage

                                                                                                                       

                                                                                                                      Guest profile

                                                                                                                      Sachi Wickramage is the Co-founder, COO & CPO of i4T Global, a disruptive Field Service Management ecosystem.

                                                                                                                      With a track record of co-founding multiple mobile-first startups, Sachi has taken his apps to over 1 million active users across various platforms worldwide.

                                                                                                                      Worst investment ever

                                                                                                                      When Sachi and his co-founder were building their Field Management Service app, they looked at the problem and figured the consumer in the ecosystem was the one facing the problem. But, they targeted the supplier. The goal was to provide the supplier with a better tech platform to provide better consumer visibility. One thing the partners did not identify at that time was that the suppliers were okay with the way they were operating their business because they knew they were a scarce resource.

                                                                                                                      Now the partners were in a fix. They couldn’t promote the app to the consumer because they needed a critical mass of suppliers on the app. When they tried to promote the app to the suppliers, their question was if there were already many customers who would give them more jobs.

                                                                                                                      The two partners had to step back, look at their model, and figure out who was the target audience with the problem at scale.

                                                                                                                      Lessons learned

                                                                                                                      • When building solutions, first figure out who is the target customer with the problem at scale.
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s takeaways

                                                                                                                      • Sometimes you have to take a step back to take a step forward.
                                                                                                                      
                                                                                                                      

                                                                                                                      Actionable advice

                                                                                                                      Wait for the moment of intent. Once the moment of intent arises, people are ready for your solution. But if you incorrectly identify the moment of intent, your solution becomes a disturbance because people don’t have a need at that time.

                                                                                                                      No.1 goal for the next 12 months

                                                                                                                      Sachi’s number one goal for the next 12 months is to expand beyond Australia to Europe and the US while staying true to his purpose.

                                                                                                                      Parting words

                                                                                                                       

                                                                                                                      “Define who you are and who you inspire.”

                                                                                                                      Sachi Wickramage

                                                                                                                       

                                                                                                                      [spp-transcript]

                                                                                                                       

                                                                                                                      Connect with Sachi Wickramage

                                                                                                                      • LinkedIn
                                                                                                                      • Facebook
                                                                                                                      • Twitter
                                                                                                                      • Instagram
                                                                                                                      • YouTube
                                                                                                                      • Blog
                                                                                                                      • Website
                                                                                                                      • Podcast
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s books

                                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                      • My Worst Investment Ever
                                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s online programs

                                                                                                                      • Valuation Master Class
                                                                                                                      • The Become a Better Investor Community
                                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                      • Finance Made Ridiculously Simple
                                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                      • Achieve Your Goals
                                                                                                                      
                                                                                                                      

                                                                                                                      Connect with Andrew Stotz:

                                                                                                                      • astotz.com
                                                                                                                      • LinkedIn
                                                                                                                      • Facebook
                                                                                                                      • Instagram
                                                                                                                      • Twitter
                                                                                                                      • YouTube
                                                                                                                      • My Worst Investment Ever Podcast
                                                                                                                      
                                                                                                                      ]]>f359d1c0-477d-4942-ada8-f5190e6f8fb6Mon, 17 Apr 2023 06:00:00 +070032:02falsefullSachi Wickramage is the Co-founder, COO & CPO of i4T Global, a disruptive Field Service Management ecosystem.ISMS 18: Dave Collum – What Makes Your Investments Good or BadIn this episode of Investment Strategy Made Simple (ISMS), Dave joins Andrew again as he shares more about his good and bad investments, among other things.

                                                                                                                       

                                                                                                                      “Most of the books I read that helped me invest are not about investing but about history.”

                                                                                                                      Dave Collum

                                                                                                                       

                                                                                                                      Listen to Dave’s previous interview Ep660: What Should the US Be Doing in Ukraine? He shares his views about the UK, the US, and what the US should do about Ukraine.

                                                                                                                      Dave’s early investment journey

                                                                                                                      In 1980, when Dave started investing, it was nothing but bonds because interest rates were humongous, and investors could get a great return. Dave didn’t know what he was doing. He just depended on recency bias to make his investment decisions. Luckily, the bonds did great. After the 1987 crash in equities, Dave found himself sitting in the faculty lounge with an old guy who convinced him to buy equities. He looked into it, liked the idea, went in, and flipped equities. Dave was in equities until the mid-90s when he got enthusiastic after starting to accrue some wealth and was very bullish.

                                                                                                                      Dave had a contact who was a traveling pharma salesman who would tell him what all the CEOs and staff were telling him. The connection had good information and gave Dave some ideas, one of which was a small company in Mississippi. The company did well and started acquiring everything under the sun.

                                                                                                                      In early 1998, Dave started getting a little queasy about the markets because he’d read enough books now and better understood investing. At the beginning of July 1998, Dave emptied half of his equities. Then the economy went right into the Asian crisis. At this point, Dave had dumped everything and made 700%, and everything had worked great. So he thought he was a genius.

                                                                                                                      Dave then got into gold. He had no clue what he was doing and simply white-knuckled gold for two years. Prices went from $256 to $1,900 at one point. Energy soared, too, and the decade following the tech boom was Dave’s best decade relative to the world. While the world was getting pounded by two nasty bear markets, Dave compounded 13% a year—that was extraordinary.

                                                                                                                      Dave’s recommendations

                                                                                                                      Dave recommends reading history books to understand investing. He highly recommends The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War.

                                                                                                                      Andrew’s takeaways

                                                                                                                      • It’s important to understand that the returns in the stock market are a function of two things. The first part of the return is what you’re getting for a company’s earnings which are paid in dividends. The second part is the premium people are willing to pay for those earnings.
                                                                                                                      • We have had fantastic times for decades. It’s time to pay attention and think about a different way of looking at things.
                                                                                                                      
                                                                                                                      

                                                                                                                      About Dave Collum

                                                                                                                      Dave Collum is a professor of Organic Chemistry at Cornell University who developed an interest in markets, which, in turn, led to an interest in geopolitics. He enjoys the human folly of it all. He has a natural predilection for being contrarian, which makes him a “denier” on almost all hot topics.

                                                                                                                       

                                                                                                                      [spp-transcript]

                                                                                                                       

                                                                                                                      Connect with Dave Collum

                                                                                                                      • LinkedIn
                                                                                                                      • Twitter
                                                                                                                      • Blog
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s books

                                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                      • My Worst Investment Ever
                                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s online programs

                                                                                                                      • Valuation Master Class
                                                                                                                      • The Become a Better Investor Community
                                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                      • Finance Made Ridiculously Simple
                                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                      • Achieve Your Goals
                                                                                                                      
                                                                                                                      

                                                                                                                      Connect with Andrew Stotz:

                                                                                                                      • astotz.com
                                                                                                                      • LinkedIn
                                                                                                                      • Facebook
                                                                                                                      • Instagram
                                                                                                                      • Twitter
                                                                                                                      • YouTube
                                                                                                                      • My Worst Investment Ever Podcast
                                                                                                                      
                                                                                                                      ]]>In this episode of Investment Strategy Made Simple (ISMS), Dave joins Andrew again as he shares more about his good and bad investments, among other things.

                                                                                                                       

                                                                                                                      “Most of the books I read that helped me invest are not about investing but about history.”

                                                                                                                      Dave Collum

                                                                                                                       

                                                                                                                      Listen to Dave’s previous interview Ep660: What Should the US Be Doing in Ukraine? He shares his views about the UK, the US, and what the US should do about Ukraine.

                                                                                                                      Dave’s early investment journey

                                                                                                                      In 1980, when Dave started investing, it was nothing but bonds because interest rates were humongous, and investors could get a great return. Dave didn’t know what he was doing. He just depended on recency bias to make his investment decisions. Luckily, the bonds did great. After the 1987 crash in equities, Dave found himself sitting in the faculty lounge with an old guy who convinced him to buy equities. He looked into it, liked the idea, went in, and flipped equities. Dave was in equities until the mid-90s when he got enthusiastic after starting to accrue some wealth and was very bullish.

                                                                                                                      Dave had a contact who was a traveling pharma salesman who would tell him what all the CEOs and staff were telling him. The connection had good information and gave Dave some ideas, one of which was a small company in Mississippi. The company did well and started acquiring everything under the sun.

                                                                                                                      In early 1998, Dave started getting a little queasy about the markets because he’d read enough books now and better understood investing. At the beginning of July 1998, Dave emptied half of his equities. Then the economy went right into the Asian crisis. At this point, Dave had dumped everything and made 700%, and everything had worked great. So he thought he was a genius.

                                                                                                                      Dave then got into gold. He had no clue what he was doing and simply white-knuckled gold for two years. Prices went from $256 to $1,900 at one point. Energy soared, too, and the decade following the tech boom was Dave’s best decade relative to the world. While the world was getting pounded by two nasty bear markets, Dave compounded 13% a year—that was extraordinary.

                                                                                                                      Dave’s recommendations

                                                                                                                      Dave recommends reading history books to understand investing. He highly recommends The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War.

                                                                                                                      Andrew’s takeaways

                                                                                                                      • It’s important to understand that the returns in the stock market are a function of two things. The first part of the return is what you’re getting for a company’s earnings which are paid in dividends. The second part is the premium people are willing to pay for those earnings.
                                                                                                                      • We have had fantastic times for decades. It’s time to pay attention and think about a different way of looking at things.
                                                                                                                      
                                                                                                                      

                                                                                                                      About Dave Collum

                                                                                                                      Dave Collum is a professor of Organic Chemistry at Cornell University who developed an interest in markets, which, in turn, led to an interest in geopolitics. He enjoys the human folly of it all. He has a natural predilection for being contrarian, which makes him a “denier” on almost all hot topics.

                                                                                                                       

                                                                                                                      [spp-transcript]

                                                                                                                       

                                                                                                                      Connect with Dave Collum

                                                                                                                      • LinkedIn
                                                                                                                      • Twitter
                                                                                                                      • Blog
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s books

                                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                      • My Worst Investment Ever
                                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s online programs

                                                                                                                      • Valuation Master Class
                                                                                                                      • The Become a Better Investor Community
                                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                      • Finance Made Ridiculously Simple
                                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                      • Achieve Your Goals
                                                                                                                      
                                                                                                                      

                                                                                                                      Connect with Andrew Stotz:

                                                                                                                      • astotz.com
                                                                                                                      • LinkedIn
                                                                                                                      • Facebook
                                                                                                                      • Instagram
                                                                                                                      • Twitter
                                                                                                                      • YouTube
                                                                                                                      • My Worst Investment Ever Podcast
                                                                                                                      
                                                                                                                      ]]>a1591019-20db-4c13-bd82-938073a627acFri, 14 Apr 2023 06:00:00 +070045:04falsefullIn this episode of Investment Strategy Made Simple (ISMS), Dave joins Andrew again as he shares more about his good and bad investments, among other things.Vincent Deluard – Know the Difference Between a Trade and an InvestmentBIO: Vincent Deluard is the global macro strategist for StoneX Group Inc., where he authors weekly commentary on global macro topics and advises pension funds on asset allocation.

                                                                                                                      STORY: Vincent decided to overleverage an ETF during the financial crisis of 2008 in the belief that the economy would bounce back. Interest rates, however, fell, and he lost 70% of his investment.

                                                                                                                      LEARNING: Take into account falling yields and falling inflation. Understand the difference between a trade and an investment.

                                                                                                                       

                                                                                                                      “The more volatile something is, the more likely it will lose its value over time.”

                                                                                                                      Vincent Deluard

                                                                                                                       

                                                                                                                      Guest profile

                                                                                                                      Vincent Deluard is the global macro strategist for StoneX Group Inc., where he authors weekly commentary on global macro topics and advises pension funds on asset allocation. Prior to joining StoneX Group Inc., Vincent served as Europe strategist for Ned Davis Research, where he created the firm’s Europe product. Before that, Vincent was executive vice president for TrimTabs Investment, where he headed the firm’s quantitative research. Vincent is frequently quoted in the Financial Times, the Wall Street Journal, and Barron’s and is regularly on Bloomberg TV and CNBC.

                                                                                                                      Worst investment ever

                                                                                                                      During the great financial crisis of 2008, Vincent had just started working and decided to get into investing. The interest rates at the time were stable at 5%—which seemed like a good number to Vincent.

                                                                                                                      Then in a matter of a week, the interest rates went all the way to 2.5% in the wake of the Lehman Brothers panic. As the interest rates went down, bond prices went up. Vincent believed the situation would reverse, so he leveraged an ETF that gave him access to shorting the US Treasury prices. This worked at the beginning.

                                                                                                                      The economy came out of recession, the yield curve steeped, and interest rates increased. Vincent thought they would go higher and back up to the 5% range, so he didn’t sell his position. Unfortunately, the interest rates didn’t go back up, and Vincent lost about 70% of his investment.

                                                                                                                      Lessons learned

                                                                                                                      • The more volatile something is, the more likely it will lose its value over time.
                                                                                                                      • Take into account falling yields and falling inflation.
                                                                                                                      • Understand the difference between a trade and an investment.
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s takeaways

                                                                                                                      • Avoid leverage.
                                                                                                                      • Be careful about treasuries and Forex. Because basically, you’re fighting against the Fed, banks with a massive balance sheet, and a limited buyer who can move in any direction.
                                                                                                                      • Don’t overestimate the genius of the Fed and other bureaucrats.
                                                                                                                      
                                                                                                                      

                                                                                                                      Actionable advice

                                                                                                                      Make your mistakes when you’re young, and learn from them to become a prudent investor.

                                                                                                                      Vincent’s recommendations

                                                                                                                      Vincent recommends signing up for his weekly reports, in which he addresses risks that people may have missed and other overlooked things. Sign up on his pinned tweet to get a two-month free trial.

                                                                                                                      No.1 goal for the next 12 months

                                                                                                                      Vincent’s number one goal for the next 12 months is to do what matters to him and live a more meaningful life.

                                                                                                                      Parting words

                                                                                                                       

                                                                                                                      “This was fun, and I like your humility. I think we all need some of that.”

                                                                                                                      Vincent Deluard

                                                                                                                       

                                                                                                                      [spp-transcript]

                                                                                                                       

                                                                                                                      Connect with Vincent Deluard

                                                                                                                      • LinkedIn
                                                                                                                      • Twitter
                                                                                                                      • Website
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s books

                                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                      • My Worst Investment Ever
                                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s online programs

                                                                                                                      • Valuation Master Class
                                                                                                                      • The Become a Better Investor Community
                                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                      • Finance Made Ridiculously Simple
                                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                      • Achieve Your Goals
                                                                                                                      
                                                                                                                      

                                                                                                                      Connect with Andrew Stotz:

                                                                                                                      • astotz.com
                                                                                                                      • LinkedIn
                                                                                                                      • Facebook
                                                                                                                      • Instagram
                                                                                                                      • Twitter
                                                                                                                      • YouTube
                                                                                                                      • My Worst Investment Ever Podcast
                                                                                                                      
                                                                                                                      ]]>BIO: Vincent Deluard is the global macro strategist for StoneX Group Inc., where he authors weekly commentary on global macro topics and advises pension funds on asset allocation.

                                                                                                                      STORY: Vincent decided to overleverage an ETF during the financial crisis of 2008 in the belief that the economy would bounce back. Interest rates, however, fell, and he lost 70% of his investment.

                                                                                                                      LEARNING: Take into account falling yields and falling inflation. Understand the difference between a trade and an investment.

                                                                                                                       

                                                                                                                      “The more volatile something is, the more likely it will lose its value over time.”

                                                                                                                      Vincent Deluard

                                                                                                                       

                                                                                                                      Guest profile

                                                                                                                      Vincent Deluard is the global macro strategist for StoneX Group Inc., where he authors weekly commentary on global macro topics and advises pension funds on asset allocation. Prior to joining StoneX Group Inc., Vincent served as Europe strategist for Ned Davis Research, where he created the firm’s Europe product. Before that, Vincent was executive vice president for TrimTabs Investment, where he headed the firm’s quantitative research. Vincent is frequently quoted in the Financial Times, the Wall Street Journal, and Barron’s and is regularly on Bloomberg TV and CNBC.

                                                                                                                      Worst investment ever

                                                                                                                      During the great financial crisis of 2008, Vincent had just started working and decided to get into investing. The interest rates at the time were stable at 5%—which seemed like a good number to Vincent.

                                                                                                                      Then in a matter of a week, the interest rates went all the way to 2.5% in the wake of the Lehman Brothers panic. As the interest rates went down, bond prices went up. Vincent believed the situation would reverse, so he leveraged an ETF that gave him access to shorting the US Treasury prices. This worked at the beginning.

                                                                                                                      The economy came out of recession, the yield curve steeped, and interest rates increased. Vincent thought they would go higher and back up to the 5% range, so he didn’t sell his position. Unfortunately, the interest rates didn’t go back up, and Vincent lost about 70% of his investment.

                                                                                                                      Lessons learned

                                                                                                                      • The more volatile something is, the more likely it will lose its value over time.
                                                                                                                      • Take into account falling yields and falling inflation.
                                                                                                                      • Understand the difference between a trade and an investment.
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s takeaways

                                                                                                                      • Avoid leverage.
                                                                                                                      • Be careful about treasuries and Forex. Because basically, you’re fighting against the Fed, banks with a massive balance sheet, and a limited buyer who can move in any direction.
                                                                                                                      • Don’t overestimate the genius of the Fed and other bureaucrats.
                                                                                                                      
                                                                                                                      

                                                                                                                      Actionable advice

                                                                                                                      Make your mistakes when you’re young, and learn from them to become a prudent investor.

                                                                                                                      Vincent’s recommendations

                                                                                                                      Vincent recommends signing up for his weekly reports, in which he addresses risks that people may have missed and other overlooked things. Sign up on his pinned tweet to get a two-month free trial.

                                                                                                                      No.1 goal for the next 12 months

                                                                                                                      Vincent’s number one goal for the next 12 months is to do what matters to him and live a more meaningful life.

                                                                                                                      Parting words

                                                                                                                       

                                                                                                                      “This was fun, and I like your humility. I think we all need some of that.”

                                                                                                                      Vincent Deluard

                                                                                                                       

                                                                                                                      [spp-transcript]

                                                                                                                       

                                                                                                                      Connect with Vincent Deluard

                                                                                                                      • LinkedIn
                                                                                                                      • Twitter
                                                                                                                      • Website
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s books

                                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                      • My Worst Investment Ever
                                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s online programs

                                                                                                                      • Valuation Master Class
                                                                                                                      • The Become a Better Investor Community
                                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                      • Finance Made Ridiculously Simple
                                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                      • Achieve Your Goals
                                                                                                                      
                                                                                                                      

                                                                                                                      Connect with Andrew Stotz:

                                                                                                                      • astotz.com
                                                                                                                      • LinkedIn
                                                                                                                      • Facebook
                                                                                                                      • Instagram
                                                                                                                      • Twitter
                                                                                                                      • YouTube
                                                                                                                      • My Worst Investment Ever Podcast
                                                                                                                      
                                                                                                                      ]]>62945e85-675e-48e5-9e89-d34aa7e45532Thu, 13 Apr 2023 06:00:00 +070044:59falsefullVincent Deluard is the global macro strategist for StoneX Group Inc., where he authors weekly commentary on global macro topics and advises pension funds on asset allocation.Igor Yelnik – Think About Non-Market RisksBIO: Igor Yelnik founded Alphidence Capital Ltd in 2020 and holds the positions of CEO and CIO. Alphidence is a systematic macro hedge fund management firm based in London, UK.

                                                                                                                      STORY: Igor’s company entered into a forward contract with one of Russia’s biggest banks and sold a very significant amount of the Russian ruble against the US dollar. The company made a considerable profit, but the bank decided not to pay. After a lengthy court battle, the company gave up and counted its losses.

                                                                                                                      LEARNING: Infrastructure and systematic risks can affect your trade significantly.

                                                                                                                       

                                                                                                                      “Non-market risks are really paramount in forward currency trades.”

                                                                                                                      Igor Yelnik

                                                                                                                       

                                                                                                                      Guest profile

                                                                                                                      Igor Yelnik founded Alphidence Capital Ltd in 2020 and holds the positions of CEO and CIO. Alphidence is a systematic macro hedge fund management firm based in London. Previously Igor was the CIO for ADG Capital Management from 2013 to 2019. Prior to that, he spent 9 years at IPM Informed Portfolio Management, where he was a Partner and Head of Portfolio Management and Research. Before this, Igor co-founded St. Petersburg Capital, an asset management firm that specialized in the Russian securities market, and later Unibase Invest, a managed futures business based in Tel Aviv.

                                                                                                                      Worst investment ever

                                                                                                                      In 1998, Asian prices, oil prices, stock prices, and the Russian ruble were going down. Igor was still working in Russia at that time. The Russian Central Bank established a cap—the currency corridor—they set ranges for the ruble. The exciting part was how much the US dollar could appreciate against the ruble. Everybody understood that the ruble was doomed to depreciate in that macroeconomic environment.

                                                                                                                      Then the most popular trade of the summer of 1998 happened. This was the currency forward trade. Russian banks believed the Russian Central Bank would support the currency, so they bought the ruble. Then all the foreign banks played against them and sold the ruble.

                                                                                                                      The ruble was already trading in the Chicago Mercantile Exchange. The foreign price of the ruble on the over-the-counter market in Russia was higher than in Chicago. So in principle, you could sell the ruble in Russia and buy it in Chicago, which was like free money.

                                                                                                                      Under Russian law, Igor’s company entered into a forward contract with one of Russia’s biggest banks. The company sold a significant amount of the Russian ruble against the US dollar. The trade was entered into in July, and the delivery would be on the 15th of September 1998. The price of the trade was 6.37 rubles for $1.

                                                                                                                      On the 17th of August, Russia defaulted on its debt denominated in the national currency. At the same time, it stopped supporting the ruble, so it devalued. By the middle of September, the ruble depreciated relative to the US dollar. It went from 6.37 to around 16. So Igor’s company won in that trade. Then on the 14th of September, the morning trading session set the price of the ruble at 8.25. This was still profitable for Igor’s company.

                                                                                                                      The most interesting thing happened. The Russian bank refused to pay for these contracts, so Igor’s company wasn’t paid for its trade. The company decided to go to court and won. The bank appealed, but Igor won again.

                                                                                                                      At that time, the Supreme Court decided in a similar case, where another major Russian bank was sued by one of the major French banks because of a non-payment on a similar contract. The Russian Supreme Court decided that the law should not protect a currency-forward transaction because it’s akin to betting. Igor and his company decided enough was enough, so they just dropped the matter that was it. They never received any payment and also lost legal fees.

                                                                                                                      Lessons learned

                                                                                                                      • Being right and making money are two very different things.
                                                                                                                      • Infrastructure risks matter because a winning trade may become a losing one if you have the wrong counterparties and infrastructure.
                                                                                                                      • If your trade presents a systemic risk, there’s no guarantee you’ll get paid because the government could find non-market ways to deal with you.
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s takeaways

                                                                                                                      • Government makes the rules. You may think you’ve made a good bet, but there’s no telling what will happen.
                                                                                                                      
                                                                                                                      

                                                                                                                      Actionable advice

                                                                                                                      Think about non-market risks when making forward currency trades. It’s also crucial to understand who you’re in business with. Your business partners have to be honest and dependable.

                                                                                                                      Igor’s recommendations

                                                                                                                      Igor recommends three books:

                                                                                                                      • Market Wizards: Interviews with Top Traders
                                                                                                                      • Reminiscences of a Stock Operator
                                                                                                                      • A Demon of Our Own Design: Markets, Hedge Funds, and the Perils of Financial Innovation
                                                                                                                      
                                                                                                                      

                                                                                                                      No.1 goal for the next 12 months

                                                                                                                      Igor’s number one goal for the next 12 months is to perform well as a hedge fund manager.

                                                                                                                      Parting words

                                                                                                                       

                                                                                                                      “The last 12 months have been very difficult for many people. I really hope that the next 12 months will be much, much better for all of you.”

                                                                                                                      Igor Yelnik

                                                                                                                       

                                                                                                                      [spp-transcript]

                                                                                                                       

                                                                                                                      Connect with Igor Yelnik

                                                                                                                      • LinkedIn
                                                                                                                      • Website
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s books

                                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                      • My Worst Investment Ever
                                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s online programs

                                                                                                                      • Valuation Master Class
                                                                                                                      • The Become a Better Investor Community
                                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                      • Finance Made Ridiculously Simple
                                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                      • Achieve Your Goals
                                                                                                                      
                                                                                                                      

                                                                                                                      Connect with Andrew Stotz:

                                                                                                                      • astotz.com
                                                                                                                      • LinkedIn
                                                                                                                      • Facebook
                                                                                                                      • Instagram
                                                                                                                      • Twitter
                                                                                                                      • YouTube
                                                                                                                      • My Worst Investment Ever Podcast
                                                                                                                      
                                                                                                                      ]]>BIO: Igor Yelnik founded Alphidence Capital Ltd in 2020 and holds the positions of CEO and CIO. Alphidence is a systematic macro hedge fund management firm based in London, UK.

                                                                                                                      STORY: Igor’s company entered into a forward contract with one of Russia’s biggest banks and sold a very significant amount of the Russian ruble against the US dollar. The company made a considerable profit, but the bank decided not to pay. After a lengthy court battle, the company gave up and counted its losses.

                                                                                                                      LEARNING: Infrastructure and systematic risks can affect your trade significantly.

                                                                                                                       

                                                                                                                      “Non-market risks are really paramount in forward currency trades.”

                                                                                                                      Igor Yelnik

                                                                                                                       

                                                                                                                      Guest profile

                                                                                                                      Igor Yelnik founded Alphidence Capital Ltd in 2020 and holds the positions of CEO and CIO. Alphidence is a systematic macro hedge fund management firm based in London. Previously Igor was the CIO for ADG Capital Management from 2013 to 2019. Prior to that, he spent 9 years at IPM Informed Portfolio Management, where he was a Partner and Head of Portfolio Management and Research. Before this, Igor co-founded St. Petersburg Capital, an asset management firm that specialized in the Russian securities market, and later Unibase Invest, a managed futures business based in Tel Aviv.

                                                                                                                      Worst investment ever

                                                                                                                      In 1998, Asian prices, oil prices, stock prices, and the Russian ruble were going down. Igor was still working in Russia at that time. The Russian Central Bank established a cap—the currency corridor—they set ranges for the ruble. The exciting part was how much the US dollar could appreciate against the ruble. Everybody understood that the ruble was doomed to depreciate in that macroeconomic environment.

                                                                                                                      Then the most popular trade of the summer of 1998 happened. This was the currency forward trade. Russian banks believed the Russian Central Bank would support the currency, so they bought the ruble. Then all the foreign banks played against them and sold the ruble.

                                                                                                                      The ruble was already trading in the Chicago Mercantile Exchange. The foreign price of the ruble on the over-the-counter market in Russia was higher than in Chicago. So in principle, you could sell the ruble in Russia and buy it in Chicago, which was like free money.

                                                                                                                      Under Russian law, Igor’s company entered into a forward contract with one of Russia’s biggest banks. The company sold a significant amount of the Russian ruble against the US dollar. The trade was entered into in July, and the delivery would be on the 15th of September 1998. The price of the trade was 6.37 rubles for $1.

                                                                                                                      On the 17th of August, Russia defaulted on its debt denominated in the national currency. At the same time, it stopped supporting the ruble, so it devalued. By the middle of September, the ruble depreciated relative to the US dollar. It went from 6.37 to around 16. So Igor’s company won in that trade. Then on the 14th of September, the morning trading session set the price of the ruble at 8.25. This was still profitable for Igor’s company.

                                                                                                                      The most interesting thing happened. The Russian bank refused to pay for these contracts, so Igor’s company wasn’t paid for its trade. The company decided to go to court and won. The bank appealed, but Igor won again.

                                                                                                                      At that time, the Supreme Court decided in a similar case, where another major Russian bank was sued by one of the major French banks because of a non-payment on a similar contract. The Russian Supreme Court decided that the law should not protect a currency-forward transaction because it’s akin to betting. Igor and his company decided enough was enough, so they just dropped the matter that was it. They never received any payment and also lost legal fees.

                                                                                                                      Lessons learned

                                                                                                                      • Being right and making money are two very different things.
                                                                                                                      • Infrastructure risks matter because a winning trade may become a losing one if you have the wrong counterparties and infrastructure.
                                                                                                                      • If your trade presents a systemic risk, there’s no guarantee you’ll get paid because the government could find non-market ways to deal with you.
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s takeaways

                                                                                                                      • Government makes the rules. You may think you’ve made a good bet, but there’s no telling what will happen.
                                                                                                                      
                                                                                                                      

                                                                                                                      Actionable advice

                                                                                                                      Think about non-market risks when making forward currency trades. It’s also crucial to understand who you’re in business with. Your business partners have to be honest and dependable.

                                                                                                                      Igor’s recommendations

                                                                                                                      Igor recommends three books:

                                                                                                                      • Market Wizards: Interviews with Top Traders
                                                                                                                      • Reminiscences of a Stock Operator
                                                                                                                      • A Demon of Our Own Design: Markets, Hedge Funds, and the Perils of Financial Innovation
                                                                                                                      
                                                                                                                      

                                                                                                                      No.1 goal for the next 12 months

                                                                                                                      Igor’s number one goal for the next 12 months is to perform well as a hedge fund manager.

                                                                                                                      Parting words

                                                                                                                       

                                                                                                                      “The last 12 months have been very difficult for many people. I really hope that the next 12 months will be much, much better for all of you.”

                                                                                                                      Igor Yelnik

                                                                                                                       

                                                                                                                      [spp-transcript]

                                                                                                                       

                                                                                                                      Connect with Igor Yelnik

                                                                                                                      • LinkedIn
                                                                                                                      • Website
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s books

                                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                      • My Worst Investment Ever
                                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s online programs

                                                                                                                      • Valuation Master Class
                                                                                                                      • The Become a Better Investor Community
                                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                      • Finance Made Ridiculously Simple
                                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                      • Achieve Your Goals
                                                                                                                      
                                                                                                                      

                                                                                                                      Connect with Andrew Stotz:

                                                                                                                      • astotz.com
                                                                                                                      • LinkedIn
                                                                                                                      • Facebook
                                                                                                                      • Instagram
                                                                                                                      • Twitter
                                                                                                                      • YouTube
                                                                                                                      • My Worst Investment Ever Podcast
                                                                                                                      
                                                                                                                      ]]>e020af75-6598-4a63-a7e6-2e4a2868598bWed, 12 Apr 2023 06:00:00 +070047:13falsefullIgor Yelnik founded Alphidence Capital Ltd in 2020 and holds the positions of CEO and CIO. Alphidence is a systematic macro hedge fund management firm based in London, UK.Bogumil Baranowski – Be Careful With Businesses in Secular DeclineBIO: Bogumil Baranowski is a founding partner of Sicart Associates, LLC, a New York City investment firm. He has almost two decades of investment experience.

                                                                                                                      STORY: Bogumil invested a lot of time and money in two companies that were drowning in debt, had poor management, and had a secular decline.

                                                                                                                      LEARNING: Just because it’s cheap, don’t compromise on debt, management, and secular decline. Debt is the number one risk for an existing company.

                                                                                                                       

                                                                                                                      “Yes, you can make money, but keeping it is equally as important.”

                                                                                                                      Bogumil Baranowski

                                                                                                                       

                                                                                                                      Guest profile

                                                                                                                      Bogumil Baranowski is a founding partner of Sicart Associates, LLC, a New York City investment firm. He has almost two decades of investment experience. He holds a master’s degree in Finance and Strategy from Sciences Po Paris and a master’s in Finance and Banking from the Warsaw School of Economics. He is the author of Outsmarting the Crowd and Money, Life, Family. He is the host of the Talking Billions Podcast.

                                                                                                                      Worst investment ever

                                                                                                                      In 2011, Bogumil picked up Verifone stock because it was cheap. The company had just acquired Hypercom, one of its competitors. It looked like they were well positioned, with Ingenico being the other competitor to coexist in a growing industry. Bogumil paid attention to how cheap the stock was. However, he had questions about how the merger would go, and the management was questionable. But Bogumil thought the price was so reasonable. So he overlooked the debt added for the acquisition and the fact that management was not exactly the team he was comfortable with.

                                                                                                                      Soon enough, the management changed. There was a temporary chairman who even went to Bogumil’s office for a chat. Bogumil and his team invested so much time in understanding all the Verifone’s pieces, the payment systems, and how its products are sold.

                                                                                                                      Then the stock started going down and got to 50% of his entry point. The earnings were also dropping, but Bogumil kept holding onto the stock. Then the tipping point came when Bogumil met with the new management. He didn’t like their approach, so he finally dropped the stock. He walked away with about a 70% loss at the time.

                                                                                                                      Bogumil also shared an interesting case study, a South African retailer - an example of what can go wrong. The company was importing furniture from communist countries and then reselling it at very good prices. So it was a good business. One of the managers decided to get more aggressive with growth, and the company ran into some trouble.

                                                                                                                      Bogumil looked at this company because some people had told him it was an exciting story. He had reservations about retail but put the company on the list regardless. Bogumil did his research well. Five minutes into reading about the company, Bogumil was ready to say no, no matter who was recommending it. But he decided to use it as a case study to teach his interns.

                                                                                                                      The company was piling up debt quickly, and the market cap reached 20-something billion. It was the zero interest rate time in Europe, and money was so cheap. Businesses could easily get loans. This company accumulated about 20 billion in debt and was not picky about what it bought. The company purchased a US mattress business rolling up at a very high premium (over 100%). Bogumil thought it was crazy for an over-leveraged company to buy another over-leveraged company at a 100% premium and borrow money as if there was no tomorrow. And when he watched the management, listened to them, and read what they were saying, Bogumil felt uncomfortable.

                                                                                                                      But as Bogumil continued learning the company’s story, one of the executives was featured on a cover of a prestigious magazine. The magazine called him the new visionary of retail, the one who figured out retail. So Bogumil made a note of it and kept watching it. A year later, the company went to almost zero and was nearly bankrupt. It negotiated a deal with the banks, and the management was fired.

                                                                                                                      Lessons learned

                                                                                                                      • Just because it’s cheap, don’t compromise on other factors that affect a stock, such as debt, management, and secular decline.
                                                                                                                      • Decide to cut your losses and not just think in terms of money but also in terms of time
                                                                                                                      • As an investor, money is one thing, but time is also crucial. Don’t waste too much time on a bad investment.
                                                                                                                      • It’s not only what you’re buying but also what you choose not to buy that can make a difference in the portfolio.
                                                                                                                      • Too much debt in a company is a red flag.
                                                                                                                      • Pay attention to how the management communicates with you.
                                                                                                                      • Be careful with a secular decline if you’re a value investor looking for a bargain.
                                                                                                                      • A company that can hold on to cash and is ready to survive will flourish in any economic downturn.
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s takeaways

                                                                                                                      • Debt is the number one risk for an existing company. Run with a minimal amount of debt.
                                                                                                                      • When acquisitions come along, and you got the cash, you can move fast and beat your competitors.
                                                                                                                      • Just because it’s cheap doesn’t mean you have to buy it.
                                                                                                                      
                                                                                                                      

                                                                                                                      Actionable advice

                                                                                                                      When analyzing a company, pay attention and ask the right questions. Take the time to get to know the company’s story. Then explore the worst thing that can happen and how you can lose money on that business. Once you have that figured out, you can get excited about why you can make money in it.

                                                                                                                      Bogumil’s recommendations

                                                                                                                      If you’re new to investing, Bogumil recommends reading One Up On Wall Street by Peter Lynch. If you know a bit about investing, then any book about Warren Buffett is fantastic.

                                                                                                                      No.1 goal for the next 12 months

                                                                                                                      Bogumil’s number one goal for the next 12 months is to keep publishing an episode weekly on his Talking Billions Podcast and get to his first 100 guests.

                                                                                                                      Parting words

                                                                                                                       

                                                                                                                      “Investing is fun, so have fun with it. Happy investing.”

                                                                                                                      Bogumil Baranowski

                                                                                                                       

                                                                                                                      [spp-transcript]

                                                                                                                       

                                                                                                                      Connect with Bogumil Baranowski

                                                                                                                      • LinkedIn
                                                                                                                      • Twitter
                                                                                                                      • Instagram
                                                                                                                      • YouTube
                                                                                                                      • Website
                                                                                                                      • Podcast
                                                                                                                      • Books
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s books

                                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                      • My Worst Investment Ever
                                                                                                                      • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                      • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                      
                                                                                                                      

                                                                                                                      Andrew’s online programs

                                                                                                                      • Valuation Master Class
                                                                                                                      • The Become a Better Investor Community
                                                                                                                      • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                      • Finance Made Ridiculously Simple
                                                                                                                      • FVMR Investing: Quantamental Investing Across the World
                                                                                                                      • Become a Great Presenter and Increase Your Influence
                                                                                                                      • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                      • Achieve Your...]]>BIO: Bogumil Baranowski is a founding partner of Sicart Associates, LLC, a New York City investment firm. He has almost two decades of investment experience.

                                                                                                                        STORY: Bogumil invested a lot of time and money in two companies that were drowning in debt, had poor management, and had a secular decline.

                                                                                                                        LEARNING: Just because it’s cheap, don’t compromise on debt, management, and secular decline. Debt is the number one risk for an existing company.

                                                                                                                         

                                                                                                                        “Yes, you can make money, but keeping it is equally as important.”

                                                                                                                        Bogumil Baranowski

                                                                                                                         

                                                                                                                        Guest profile

                                                                                                                        Bogumil Baranowski is a founding partner of Sicart Associates, LLC, a New York City investment firm. He has almost two decades of investment experience. He holds a master’s degree in Finance and Strategy from Sciences Po Paris and a master’s in Finance and Banking from the Warsaw School of Economics. He is the author of Outsmarting the Crowd and Money, Life, Family. He is the host of the Talking Billions Podcast.

                                                                                                                        Worst investment ever

                                                                                                                        In 2011, Bogumil picked up Verifone stock because it was cheap. The company had just acquired Hypercom, one of its competitors. It looked like they were well positioned, with Ingenico being the other competitor to coexist in a growing industry. Bogumil paid attention to how cheap the stock was. However, he had questions about how the merger would go, and the management was questionable. But Bogumil thought the price was so reasonable. So he overlooked the debt added for the acquisition and the fact that management was not exactly the team he was comfortable with.

                                                                                                                        Soon enough, the management changed. There was a temporary chairman who even went to Bogumil’s office for a chat. Bogumil and his team invested so much time in understanding all the Verifone’s pieces, the payment systems, and how its products are sold.

                                                                                                                        Then the stock started going down and got to 50% of his entry point. The earnings were also dropping, but Bogumil kept holding onto the stock. Then the tipping point came when Bogumil met with the new management. He didn’t like their approach, so he finally dropped the stock. He walked away with about a 70% loss at the time.

                                                                                                                        Bogumil also shared an interesting case study, a South African retailer - an example of what can go wrong. The company was importing furniture from communist countries and then reselling it at very good prices. So it was a good business. One of the managers decided to get more aggressive with growth, and the company ran into some trouble.

                                                                                                                        Bogumil looked at this company because some people had told him it was an exciting story. He had reservations about retail but put the company on the list regardless. Bogumil did his research well. Five minutes into reading about the company, Bogumil was ready to say no, no matter who was recommending it. But he decided to use it as a case study to teach his interns.

                                                                                                                        The company was piling up debt quickly, and the market cap reached 20-something billion. It was the zero interest rate time in Europe, and money was so cheap. Businesses could easily get loans. This company accumulated about 20 billion in debt and was not picky about what it bought. The company purchased a US mattress business rolling up at a very high premium (over 100%). Bogumil thought it was crazy for an over-leveraged company to buy another over-leveraged company at a 100% premium and borrow money as if there was no tomorrow. And when he watched the management, listened to them, and read what they were saying, Bogumil felt uncomfortable.

                                                                                                                        But as Bogumil continued learning the company’s story, one of the executives was featured on a cover of a prestigious magazine. The magazine called him the new visionary of retail, the one who figured out retail. So Bogumil made a note of it and kept watching it. A year later, the company went to almost zero and was nearly bankrupt. It negotiated a deal with the banks, and the management was fired.

                                                                                                                        Lessons learned

                                                                                                                        • Just because it’s cheap, don’t compromise on other factors that affect a stock, such as debt, management, and secular decline.
                                                                                                                        • Decide to cut your losses and not just think in terms of money but also in terms of time
                                                                                                                        • As an investor, money is one thing, but time is also crucial. Don’t waste too much time on a bad investment.
                                                                                                                        • It’s not only what you’re buying but also what you choose not to buy that can make a difference in the portfolio.
                                                                                                                        • Too much debt in a company is a red flag.
                                                                                                                        • Pay attention to how the management communicates with you.
                                                                                                                        • Be careful with a secular decline if you’re a value investor looking for a bargain.
                                                                                                                        • A company that can hold on to cash and is ready to survive will flourish in any economic downturn.
                                                                                                                        
                                                                                                                        

                                                                                                                        Andrew’s takeaways

                                                                                                                        • Debt is the number one risk for an existing company. Run with a minimal amount of debt.
                                                                                                                        • When acquisitions come along, and you got the cash, you can move fast and beat your competitors.
                                                                                                                        • Just because it’s cheap doesn’t mean you have to buy it.
                                                                                                                        
                                                                                                                        

                                                                                                                        Actionable advice

                                                                                                                        When analyzing a company, pay attention and ask the right questions. Take the time to get to know the company’s story. Then explore the worst thing that can happen and how you can lose money on that business. Once you have that figured out, you can get excited about why you can make money in it.

                                                                                                                        Bogumil’s recommendations

                                                                                                                        If you’re new to investing, Bogumil recommends reading One Up On Wall Street by Peter Lynch. If you know a bit about investing, then any book about Warren Buffett is fantastic.

                                                                                                                        No.1 goal for the next 12 months

                                                                                                                        Bogumil’s number one goal for the next 12 months is to keep publishing an episode weekly on his Talking Billions Podcast and get to his first 100 guests.

                                                                                                                        Parting words

                                                                                                                         

                                                                                                                        “Investing is fun, so have fun with it. Happy investing.”

                                                                                                                        Bogumil Baranowski

                                                                                                                         

                                                                                                                        [spp-transcript]

                                                                                                                         

                                                                                                                        Connect with Bogumil Baranowski

                                                                                                                        • LinkedIn
                                                                                                                        • Twitter
                                                                                                                        • Instagram
                                                                                                                        • YouTube
                                                                                                                        • Website
                                                                                                                        • Podcast
                                                                                                                        • Books
                                                                                                                        
                                                                                                                        

                                                                                                                        Andrew’s books

                                                                                                                        • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                        • My Worst Investment Ever
                                                                                                                        • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                        • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                        
                                                                                                                        

                                                                                                                        Andrew’s online programs

                                                                                                                        • Valuation Master Class
                                                                                                                        • The Become a Better Investor Community
                                                                                                                        • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                        • Finance Made Ridiculously Simple
                                                                                                                        • FVMR Investing: Quantamental Investing Across the World
                                                                                                                        • Become a Great Presenter and Increase Your Influence
                                                                                                                        • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                        • Achieve Your Goals
                                                                                                                        
                                                                                                                        

                                                                                                                        Connect with Andrew Stotz:

                                                                                                                        • astotz.com
                                                                                                                        • LinkedIn
                                                                                                                        • Facebook
                                                                                                                        • Instagram
                                                                                                                        • Twitter
                                                                                                                        • YouTube
                                                                                                                        • My Worst Investment Ever Podcast
                                                                                                                        
                                                                                                                        ]]>3f833baa-4888-4a83-8f57-3f35bd13278eMon, 10 Apr 2023 06:00:00 +070041:19falsefullBogumil Baranowski is a founding partner of Sicart Associates, LLC, a New York City investment firm. He has almost two decades of investment experience.ISMS 17: Larry Swedroe – Do You Project Recent Trends Indefinitely Into the Future?In this episode of Investment Strategy Made Simple (ISMS), Andrew and Larry discuss a chapter of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this second episode of the series, they talk about mistake number two: Do you project recent trends indefinitely into the future?

                                                                                                                        LEARNING: Hyper-diversify and rebalance your portfolio.

                                                                                                                         

                                                                                                                        “You cannot run away from risks; you can only choose which risk you’re going to take. Hyper-diversify on as many different unique risks as you can, stay the cause, and rebalance.”

                                                                                                                        Larry Swedroe

                                                                                                                         

                                                                                                                        In today’s episode, Andrew continues discussing with Larry Swedroe, head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                                                                        Larry deeply understands the world of academic research and investing, especially risk. Today Andrew and Larry discuss a chapter of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this second series, they talk about mistake number two: Do you project recent trends indefinitely into the future?

                                                                                                                        Missed out on mistake number one? Check it out: ISMS 8: Investment Mistake No.1: Are You Overconfident in Your Skills?

                                                                                                                        Recency bias explained

                                                                                                                        According to Larry, most investors suffer from recency bias. Recency bias is that we tend to overweight whatever has happened in the most recent past, whether it’s months or years, and ignore long-term evidence. Say you’re watching a stock and go back to 1995 and notice that technology stocks in ‘96, ‘97, and ‘98 performed well. So you think the same performance will prevail, and now you buy tech stocks based on that recent trend.

                                                                                                                        If you buy things that have done well in the last few years, and now you think it’s safe, what you’ve done is bought high. You didn’t get those great returns but paid high prices. High prices generally mean you’ll get low expected returns.

                                                                                                                        Larry reminds investors that knowing your history is the best way to overcome recency bias. History tells us that all risk assets, gold, real estate, US stocks, small stocks, value stocks, high-yield bonds, etc., go through very long periods of poor performance. That means you don’t want to be subject to recency bias because you think three, five, or even ten years is a long time to judge performance. It’s not; otherwise, there would be no risk for an investor with a 10-year horizon. So you just have to wait it out.

                                                                                                                        An excellent example of that problem is when the S&P underperformed T bills for at least 13 years for three periods, from 1929 to 1943, from 1966 to 1982, and then again from 2000 to 2012. Of course, the stocks did great in the other half of that period, but you don’t get those returns if you’re subject to recency bias.

                                                                                                                        The never-ending game of buying high and selling low

                                                                                                                        The message that Larry tries to give investors is that there are no clear crystal balls. So don’t be subject to recency bias because you’ll forever chase and buy high and sell low. This is not a prescription for success. You cannot run away from risks; you can only choose which risk you’ll take. And if you don’t have a clear crystal ball, there’s only one logical answer; you should hyper-diversify on as many unique risks as possible and stay with the cause.

                                                                                                                        Also, rebalance your portfolio and do what Warren Buffett, maybe the greatest investor of all time, has told people to do: don’t try to time the market. But if you’re going to because you can’t resist, buy when everyone else is panic selling and sell when everyone else is getting greedy.

                                                                                                                        Reversion to the mean of abnormal returns

                                                                                                                        According to Larry, investors get hooked on recency bias and ignore that one of the most powerful forces in the universe is the reversion to the mean of abnormal returns, both good and bad. That’s not necessarily true of individual stocks. For example, a stock could do poorly and then eventually go bankrupt. But it’s true of country indices or any broadly diversified portfolio. When you have a terrible performance period, that’s likely a result of the fact that valuations are falling. And if valuations are falling, your earnings-to-price ratio is going up, which means your expected returns are going up. But investors run away from the bad performance instead of rebalancing their portfolio.

                                                                                                                        Is recency bias symmetrical or asymmetrical in our decision-making?

                                                                                                                        Larry believes recency bias is both symmetrical and asymmetrical in our decision-making. Whatever is done well, people jump on the bandwagon due to fear of missing out (FOMO). But on the downside, the impact is worse because losses have a much more significant effect than an equal-size gain and how we feel.

                                                                                                                        So if you invest $100, for example, you feel twice as bad when you lose that $100 than if you make it. If you turn it around to a million dollars, the multiple effects may be 10X. The bigger the number, the worse that ratio becomes. So what happens is, when markets are going down, you feel that pain and project that it’s going to keep going down. Now you want to get out. The key to avoiding this is to avoid taking more risks than you can stomach in the first place. Then stick with your plan, and don’t chase returns.

                                                                                                                        Larry also insists on being aware that our biases, like political bias, cause us to take action when inaction is almost always better.

                                                                                                                        Your labor capital has to be low in correlation to the equity risk

                                                                                                                        Larry says that many investors set up their asset allocation thinking they have a long investment horizon before they start to withdraw. So they believe they can wait out a bear market—and that’s true. But it’s only a necessary condition to take a high equity allocation, not a sufficient condition.

                                                                                                                        Larry advises investors to take on the sufficient condition: their labor capital should be low in correlation to stocks’ economic risks. Because if the stock market goes down due to a recession and you get laid off, you have to sell stocks when the markets have already crashed to put food on the table, so you lose your investment. Therefore, people whose labor capital is closely tied to the economic cycle risk shouldn’t take as much equity risk in the first place.

                                                                                                                        The risk of confirmation bias

                                                                                                                        You get an echo chamber effect when you read articles about disruptive industries, technologies, artificial intelligence, and all other hyped stocks. You hear precisely what you want, making you feel even better. Then you ignore all the other evidence. Now, you only see bullish signals, become more optimistic, and buy.

                                                                                                                        However, if you’re more open-minded and look at the negative information about a stock, you get a more balanced view. You’ll do better in the market than a person who hears one side of the story. If you listen to both sides, you’ll still underperform the market because of trading costs and too efficient markets. Still, you’ll only lose by a small margin.

                                                                                                                        Final thoughts from Larry

                                                                                                                        We’re all subjected to recency and confirmation biases. To overcome them, have a well-thought-out plan, write down your asset allocation, and hyper-diversify. Once a month or once a quarter, look at your portfolio and rebalance it. Then ignore what is going on in the market.

                                                                                                                        About Larry Swedroe

                                                                                                                        Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                                                                        Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                                                                        Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                                                                        Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                                                                         

                                                                                                                        [spp-transcript]

                                                                                                                         

                                                                                                                        Connect with Larry Swedroe

                                                                                                                        • LinkedIn
                                                                                                                        • Twitter
                                                                                                                        • In this episode of Investment Strategy Made Simple (ISMS), Andrew and Larry discuss a chapter of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this second episode of the series, they talk about mistake number two: Do you project recent trends indefinitely into the future?

                                                                                                                          LEARNING: Hyper-diversify and rebalance your portfolio.

                                                                                                                           

                                                                                                                          “You cannot run away from risks; you can only choose which risk you’re going to take. Hyper-diversify on as many different unique risks as you can, stay the cause, and rebalance.”

                                                                                                                          Larry Swedroe

                                                                                                                           

                                                                                                                          In today’s episode, Andrew continues discussing with Larry Swedroe, head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                                                                          Larry deeply understands the world of academic research and investing, especially risk. Today Andrew and Larry discuss a chapter of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this second series, they talk about mistake number two: Do you project recent trends indefinitely into the future?

                                                                                                                          Missed out on mistake number one? Check it out: ISMS 8: Investment Mistake No.1: Are You Overconfident in Your Skills?

                                                                                                                          Recency bias explained

                                                                                                                          According to Larry, most investors suffer from recency bias. Recency bias is that we tend to overweight whatever has happened in the most recent past, whether it’s months or years, and ignore long-term evidence. Say you’re watching a stock and go back to 1995 and notice that technology stocks in ‘96, ‘97, and ‘98 performed well. So you think the same performance will prevail, and now you buy tech stocks based on that recent trend.

                                                                                                                          If you buy things that have done well in the last few years, and now you think it’s safe, what you’ve done is bought high. You didn’t get those great returns but paid high prices. High prices generally mean you’ll get low expected returns.

                                                                                                                          Larry reminds investors that knowing your history is the best way to overcome recency bias. History tells us that all risk assets, gold, real estate, US stocks, small stocks, value stocks, high-yield bonds, etc., go through very long periods of poor performance. That means you don’t want to be subject to recency bias because you think three, five, or even ten years is a long time to judge performance. It’s not; otherwise, there would be no risk for an investor with a 10-year horizon. So you just have to wait it out.

                                                                                                                          An excellent example of that problem is when the S&P underperformed T bills for at least 13 years for three periods, from 1929 to 1943, from 1966 to 1982, and then again from 2000 to 2012. Of course, the stocks did great in the other half of that period, but you don’t get those returns if you’re subject to recency bias.

                                                                                                                          The never-ending game of buying high and selling low

                                                                                                                          The message that Larry tries to give investors is that there are no clear crystal balls. So don’t be subject to recency bias because you’ll forever chase and buy high and sell low. This is not a prescription for success. You cannot run away from risks; you can only choose which risk you’ll take. And if you don’t have a clear crystal ball, there’s only one logical answer; you should hyper-diversify on as many unique risks as possible and stay with the cause.

                                                                                                                          Also, rebalance your portfolio and do what Warren Buffett, maybe the greatest investor of all time, has told people to do: don’t try to time the market. But if you’re going to because you can’t resist, buy when everyone else is panic selling and sell when everyone else is getting greedy.

                                                                                                                          Reversion to the mean of abnormal returns

                                                                                                                          According to Larry, investors get hooked on recency bias and ignore that one of the most powerful forces in the universe is the reversion to the mean of abnormal returns, both good and bad. That’s not necessarily true of individual stocks. For example, a stock could do poorly and then eventually go bankrupt. But it’s true of country indices or any broadly diversified portfolio. When you have a terrible performance period, that’s likely a result of the fact that valuations are falling. And if valuations are falling, your earnings-to-price ratio is going up, which means your expected returns are going up. But investors run away from the bad performance instead of rebalancing their portfolio.

                                                                                                                          Is recency bias symmetrical or asymmetrical in our decision-making?

                                                                                                                          Larry believes recency bias is both symmetrical and asymmetrical in our decision-making. Whatever is done well, people jump on the bandwagon due to fear of missing out (FOMO). But on the downside, the impact is worse because losses have a much more significant effect than an equal-size gain and how we feel.

                                                                                                                          So if you invest $100, for example, you feel twice as bad when you lose that $100 than if you make it. If you turn it around to a million dollars, the multiple effects may be 10X. The bigger the number, the worse that ratio becomes. So what happens is, when markets are going down, you feel that pain and project that it’s going to keep going down. Now you want to get out. The key to avoiding this is to avoid taking more risks than you can stomach in the first place. Then stick with your plan, and don’t chase returns.

                                                                                                                          Larry also insists on being aware that our biases, like political bias, cause us to take action when inaction is almost always better.

                                                                                                                          Your labor capital has to be low in correlation to the equity risk

                                                                                                                          Larry says that many investors set up their asset allocation thinking they have a long investment horizon before they start to withdraw. So they believe they can wait out a bear market—and that’s true. But it’s only a necessary condition to take a high equity allocation, not a sufficient condition.

                                                                                                                          Larry advises investors to take on the sufficient condition: their labor capital should be low in correlation to stocks’ economic risks. Because if the stock market goes down due to a recession and you get laid off, you have to sell stocks when the markets have already crashed to put food on the table, so you lose your investment. Therefore, people whose labor capital is closely tied to the economic cycle risk shouldn’t take as much equity risk in the first place.

                                                                                                                          The risk of confirmation bias

                                                                                                                          You get an echo chamber effect when you read articles about disruptive industries, technologies, artificial intelligence, and all other hyped stocks. You hear precisely what you want, making you feel even better. Then you ignore all the other evidence. Now, you only see bullish signals, become more optimistic, and buy.

                                                                                                                          However, if you’re more open-minded and look at the negative information about a stock, you get a more balanced view. You’ll do better in the market than a person who hears one side of the story. If you listen to both sides, you’ll still underperform the market because of trading costs and too efficient markets. Still, you’ll only lose by a small margin.

                                                                                                                          Final thoughts from Larry

                                                                                                                          We’re all subjected to recency and confirmation biases. To overcome them, have a well-thought-out plan, write down your asset allocation, and hyper-diversify. Once a month or once a quarter, look at your portfolio and rebalance it. Then ignore what is going on in the market.

                                                                                                                          About Larry Swedroe

                                                                                                                          Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                                                                          Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                                                                          Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                                                                          Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                                                                           

                                                                                                                          [spp-transcript]

                                                                                                                           

                                                                                                                          Connect with Larry Swedroe

                                                                                                                          • LinkedIn
                                                                                                                          • Twitter
                                                                                                                          • Website
                                                                                                                          • Books
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s books

                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • My Worst Investment Ever
                                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s online programs

                                                                                                                          • Valuation Master Class
                                                                                                                          • The Become a Better Investor Community
                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • Finance Made Ridiculously Simple
                                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                          • Achieve Your Goals
                                                                                                                          
                                                                                                                          

                                                                                                                          Connect with Andrew Stotz:

                                                                                                                          • astotz.com
                                                                                                                          • LinkedIn
                                                                                                                          • Facebook
                                                                                                                          • Instagram
                                                                                                                          • Twitter
                                                                                                                          • YouTube
                                                                                                                          • My Worst Investment Ever Podcast
                                                                                                                          
                                                                                                                          ]]>ce4a0c5c-b7aa-4471-a648-62f996394061Fri, 07 Apr 2023 06:00:00 +070030:07falsefullIn this episode of Investment Strategy Made Simple (ISMS), Andrew and Larry discuss a chapter of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this second episode of the series, they talk about mistake number two: Do you project recent trends indefinitely into the future?ISMS 16: Top 5 EM Country Interest Rates – Normal China Yield CurveEmerging Countries - China and Russia with stable rates, LT rates up only slightly, yield curve inversion less severe except Russia

                                                                                                                          Interest rate overview

                                                                                                                          • China 3m yield 2.5%, India 7.2%, Korea 3.3%, Russia 22.3%, Brazil 13.6%
                                                                                                                          • China 1yr yield 2.2%, India 7.2%, Korea 3.3%, Russia 10.0%, Brazil 13%
                                                                                                                          • China 10yr yield 2.9%, India 7.3%, Korea 3.3%, Russia 10.3%, Brazil 13.1%
                                                                                                                          
                                                                                                                          

                                                                                                                          Year-on-year changes

                                                                                                                          • 3m yield went up in most emerging countries
                                                                                                                          • China 3m yield was up 0.1ppts, India up 3.4ppts, Korea up 2.1ppts, Russia flat, Brazil up 1.9ppts
                                                                                                                          • 1yr yield increases most prominent in India and Korea
                                                                                                                          • China 1yr yield was up 0.1ppts, India up 2.9ppts, Korea up 1.6ppts, Russia down 4ppts, Brazil up 0.2ppts
                                                                                                                          • 10yr yield curve hasn’t changed significantly among emerging countries
                                                                                                                          • China 10yr yield was flat, India up 0.5ppts, Korea up 0.4ppts, Russia down 0.8ppts, Brazil up 1.5ppts
                                                                                                                          
                                                                                                                          

                                                                                                                          Rate progression

                                                                                                                          • 3m yield was quite stable in developing countries
                                                                                                                          • Overall, developing countries have been more cautious in adjusted their short-term interest rates
                                                                                                                          • 1yr yield was volatile in Russia over the past year; other developing countries remained flat
                                                                                                                          • 10yr yield almost stayed constant in all emerging countries
                                                                                                                          
                                                                                                                          

                                                                                                                          Yield curve

                                                                                                                          • China yield curve remained constant over the past 12 months
                                                                                                                          • Both short-term and long-term yield haven’t moved much
                                                                                                                          • As of March 2023, the 10yr yield remained 0.4ppts higher than the 3m yield
                                                                                                                          • India yield curve flattened massively and looks set to invert
                                                                                                                          • 3m yield almost reached the same level as 10yr yield recently
                                                                                                                          • This is a massive change YoY as the yield curve was pretty steep back in March 2022
                                                                                                                          • Korea yield curve inverted slightly in March 2023
                                                                                                                          • Russia yield curve stays inverted
                                                                                                                          • Both short term yield and long-term yield haven’t moved much
                                                                                                                          • Brazil yield curve inversion has widened
                                                                                                                          • The inversion accumulated to 0.5 ppts which is a bit higher compared to the previous year
                                                                                                                          
                                                                                                                          

                                                                                                                          Key points

                                                                                                                          • India, Korea, and Brazil raised ST rates significantly; China and Russia were stable
                                                                                                                          • LT rates are up slightly in all EM countries but increased less than World
                                                                                                                          • Brazil and Korea saw yield curve inversion recently, Russia remains worst
                                                                                                                          
                                                                                                                          

                                                                                                                           

                                                                                                                          Click here to get the PDF with all charts and graphs

                                                                                                                           

                                                                                                                          Andrew’s books

                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • My Worst Investment Ever
                                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s online programs

                                                                                                                          • Valuation Master Class
                                                                                                                          • The Become a Better Investor Community
                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • Finance Made Ridiculously Simple
                                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                          • Achieve Your Goals
                                                                                                                          
                                                                                                                          

                                                                                                                          Connect with Andrew Stotz:

                                                                                                                          • astotz.com
                                                                                                                          • LinkedIn
                                                                                                                          • Facebook
                                                                                                                          • Instagram
                                                                                                                          • Twitter
                                                                                                                          • YouTube
                                                                                                                          • My Worst Investment Ever Podcast
                                                                                                                          
                                                                                                                          ]]>Emerging Countries - China and Russia with stable rates, LT rates up only slightly, yield curve inversion less severe except Russia

                                                                                                                          Interest rate overview

                                                                                                                          • China 3m yield 2.5%, India 7.2%, Korea 3.3%, Russia 22.3%, Brazil 13.6%
                                                                                                                          • China 1yr yield 2.2%, India 7.2%, Korea 3.3%, Russia 10.0%, Brazil 13%
                                                                                                                          • China 10yr yield 2.9%, India 7.3%, Korea 3.3%, Russia 10.3%, Brazil 13.1%
                                                                                                                          
                                                                                                                          

                                                                                                                          Year-on-year changes

                                                                                                                          • 3m yield went up in most emerging countries
                                                                                                                          • China 3m yield was up 0.1ppts, India up 3.4ppts, Korea up 2.1ppts, Russia flat, Brazil up 1.9ppts
                                                                                                                          • 1yr yield increases most prominent in India and Korea
                                                                                                                          • China 1yr yield was up 0.1ppts, India up 2.9ppts, Korea up 1.6ppts, Russia down 4ppts, Brazil up 0.2ppts
                                                                                                                          • 10yr yield curve hasn’t changed significantly among emerging countries
                                                                                                                          • China 10yr yield was flat, India up 0.5ppts, Korea up 0.4ppts, Russia down 0.8ppts, Brazil up 1.5ppts
                                                                                                                          
                                                                                                                          

                                                                                                                          Rate progression

                                                                                                                          • 3m yield was quite stable in developing countries
                                                                                                                          • Overall, developing countries have been more cautious in adjusted their short-term interest rates
                                                                                                                          • 1yr yield was volatile in Russia over the past year; other developing countries remained flat
                                                                                                                          • 10yr yield almost stayed constant in all emerging countries
                                                                                                                          
                                                                                                                          

                                                                                                                          Yield curve

                                                                                                                          • China yield curve remained constant over the past 12 months
                                                                                                                          • Both short-term and long-term yield haven’t moved much
                                                                                                                          • As of March 2023, the 10yr yield remained 0.4ppts higher than the 3m yield
                                                                                                                          • India yield curve flattened massively and looks set to invert
                                                                                                                          • 3m yield almost reached the same level as 10yr yield recently
                                                                                                                          • This is a massive change YoY as the yield curve was pretty steep back in March 2022
                                                                                                                          • Korea yield curve inverted slightly in March 2023
                                                                                                                          • Russia yield curve stays inverted
                                                                                                                          • Both short term yield and long-term yield haven’t moved much
                                                                                                                          • Brazil yield curve inversion has widened
                                                                                                                          • The inversion accumulated to 0.5 ppts which is a bit higher compared to the previous year
                                                                                                                          
                                                                                                                          

                                                                                                                          Key points

                                                                                                                          • India, Korea, and Brazil raised ST rates significantly; China and Russia were stable
                                                                                                                          • LT rates are up slightly in all EM countries but increased less than World
                                                                                                                          • Brazil and Korea saw yield curve inversion recently, Russia remains worst
                                                                                                                          
                                                                                                                          

                                                                                                                           

                                                                                                                          Click here to get the PDF with all charts and graphs

                                                                                                                           

                                                                                                                          Andrew’s books

                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • My Worst Investment Ever
                                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s online programs

                                                                                                                          • Valuation Master Class
                                                                                                                          • The Become a Better Investor Community
                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • Finance Made Ridiculously Simple
                                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                          • Achieve Your Goals
                                                                                                                          
                                                                                                                          

                                                                                                                          Connect with Andrew Stotz:

                                                                                                                          • astotz.com
                                                                                                                          • LinkedIn
                                                                                                                          • Facebook
                                                                                                                          • Instagram
                                                                                                                          • Twitter
                                                                                                                          • YouTube
                                                                                                                          • My Worst Investment Ever Podcast
                                                                                                                          
                                                                                                                          ]]>a3a5de0f-5caa-4490-ab3e-685ba2f44950Thu, 06 Apr 2023 06:04:00 +070007:56falsefullEmerging Countries - China and Russia with stable rates, LT rates up only slightly, yield curve inversion less severe except RussiaISMS 15: Top 5 DM Country Interest Rates – Steep US InversionDeveloped Countries - Vast DM Country increases in ST and LT rates, Japan stays an outlier, US looks worst based on yield curve inversion

                                                                                                                          Interest rate overview

                                                                                                                          • US 3m yield 4.9%, Japan -0.3%, Germany 2.6%, UK 4.1%, France 2.8%
                                                                                                                          • US 1yr yield 4.7%, Japan -0.1%, Germany 2.9%, UK 4.0%, France 3.0%
                                                                                                                          • US 10yr yield 3.6%, Japan 0.3%, Germany 2.3%, UK 3.5%, France 2.8%
                                                                                                                          
                                                                                                                          

                                                                                                                          Year-on-year changes

                                                                                                                          • 3m yield in US up the most YoY as it started the interest rate hike
                                                                                                                          • USA 3m yield was up 4.4ppts, Japan down 0.2ppts, Germany up 3.2ppts, UK up 3.5ppts, France up 3.4ppts
                                                                                                                          • 1yr yield has risen significantly in developed countries; only Japan’s yield didn’t move
                                                                                                                          • USA 1yr yield was up 3.1ppts, Japan down 0.1ppts, Germany up 3.3ppts, UK up 2.7ppts, France up 3.5ppts
                                                                                                                          • 10yr yield grew in all developed countries YOY, even in Japan
                                                                                                                          • USA 10yr yield was up 1.2ppts, Japan up 0.1ppts, Germany up 1.8ppts, UK up 1.9ppts, France up 1.8ppts
                                                                                                                          
                                                                                                                          

                                                                                                                          Rate progression

                                                                                                                          • 3m yield has risen steepest in the US
                                                                                                                          • Germany, UK, and France 3m yield follows US, but with a delay
                                                                                                                          • Japan remains an outsider and continues with its negative interest rate policy
                                                                                                                          • 1yr yield in developed countries moved up aggressively
                                                                                                                          • However, in March 2023, US 1yr yield dropped for the first time in 12 months
                                                                                                                          • Other developed countries also saw a slight fall recently
                                                                                                                          • 10yr yield has risen in all developed countries, but starts to show flattening behavior recently
                                                                                                                          • Since October 2022, the 10yr yield among the developed countries hasn't moved much and stayed flat
                                                                                                                          
                                                                                                                          

                                                                                                                          Yield curve

                                                                                                                          • 3m yield curve inversion in the US widened after the Fed aggressively increased short-term rates
                                                                                                                          • In March 2023, the 3m rate was 1.3 ppts higher than the long-term rate
                                                                                                                          • 1yr yield curve in Japan steepened over the past 12 months
                                                                                                                          • Japan is among the few countries that haven’t seen a yield curve inversion
                                                                                                                          • Quite the opposite is true as the differential between 10yr yield and 3m rates doubled over the past 12 months
                                                                                                                          • 10yr yield curve in Germany turned into negative territory, but far less severe compared to World
                                                                                                                          • 10yr yield curve in the UK also saw a slight widening of its yield curve inversion
                                                                                                                          • 10yr yield curve in France flattened massively and seems likely to invert soon
                                                                                                                          
                                                                                                                          

                                                                                                                          Key points

                                                                                                                          • Aggressive ST rate hikes led by the US and followed by European developed countries
                                                                                                                          • LT rates seem to have peaked and fell MoM
                                                                                                                          • Japan with different policy sees almost no movements in both ST and LT rates
                                                                                                                          • US faced steepest inversion among developed countries; Japan maintains positive yield curve
                                                                                                                          
                                                                                                                          

                                                                                                                           

                                                                                                                          Click here to get the PDF with all charts and graphs

                                                                                                                           

                                                                                                                          Andrew’s books

                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • My Worst Investment Ever
                                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s online programs

                                                                                                                          • Valuation Master Class
                                                                                                                          • The Become a Better Investor Community
                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • Finance Made Ridiculously Simple
                                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                          • Achieve Your Goals
                                                                                                                          
                                                                                                                          

                                                                                                                          Connect with Andrew Stotz:

                                                                                                                          • astotz.com
                                                                                                                          • LinkedIn
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                                                                                                                          • Twitter
                                                                                                                          • YouTube
                                                                                                                          • My Worst Investment Ever Podcast
                                                                                                                          
                                                                                                                          ]]>Developed Countries - Vast DM Country increases in ST and LT rates, Japan stays an outlier, US looks worst based on yield curve inversion

                                                                                                                          Interest rate overview

                                                                                                                          • US 3m yield 4.9%, Japan -0.3%, Germany 2.6%, UK 4.1%, France 2.8%
                                                                                                                          • US 1yr yield 4.7%, Japan -0.1%, Germany 2.9%, UK 4.0%, France 3.0%
                                                                                                                          • US 10yr yield 3.6%, Japan 0.3%, Germany 2.3%, UK 3.5%, France 2.8%
                                                                                                                          
                                                                                                                          

                                                                                                                          Year-on-year changes

                                                                                                                          • 3m yield in US up the most YoY as it started the interest rate hike
                                                                                                                          • USA 3m yield was up 4.4ppts, Japan down 0.2ppts, Germany up 3.2ppts, UK up 3.5ppts, France up 3.4ppts
                                                                                                                          • 1yr yield has risen significantly in developed countries; only Japan’s yield didn’t move
                                                                                                                          • USA 1yr yield was up 3.1ppts, Japan down 0.1ppts, Germany up 3.3ppts, UK up 2.7ppts, France up 3.5ppts
                                                                                                                          • 10yr yield grew in all developed countries YOY, even in Japan
                                                                                                                          • USA 10yr yield was up 1.2ppts, Japan up 0.1ppts, Germany up 1.8ppts, UK up 1.9ppts, France up 1.8ppts
                                                                                                                          
                                                                                                                          

                                                                                                                          Rate progression

                                                                                                                          • 3m yield has risen steepest in the US
                                                                                                                          • Germany, UK, and France 3m yield follows US, but with a delay
                                                                                                                          • Japan remains an outsider and continues with its negative interest rate policy
                                                                                                                          • 1yr yield in developed countries moved up aggressively
                                                                                                                          • However, in March 2023, US 1yr yield dropped for the first time in 12 months
                                                                                                                          • Other developed countries also saw a slight fall recently
                                                                                                                          • 10yr yield has risen in all developed countries, but starts to show flattening behavior recently
                                                                                                                          • Since October 2022, the 10yr yield among the developed countries hasn't moved much and stayed flat
                                                                                                                          
                                                                                                                          

                                                                                                                          Yield curve

                                                                                                                          • 3m yield curve inversion in the US widened after the Fed aggressively increased short-term rates
                                                                                                                          • In March 2023, the 3m rate was 1.3 ppts higher than the long-term rate
                                                                                                                          • 1yr yield curve in Japan steepened over the past 12 months
                                                                                                                          • Japan is among the few countries that haven’t seen a yield curve inversion
                                                                                                                          • Quite the opposite is true as the differential between 10yr yield and 3m rates doubled over the past 12 months
                                                                                                                          • 10yr yield curve in Germany turned into negative territory, but far less severe compared to World
                                                                                                                          • 10yr yield curve in the UK also saw a slight widening of its yield curve inversion
                                                                                                                          • 10yr yield curve in France flattened massively and seems likely to invert soon
                                                                                                                          
                                                                                                                          

                                                                                                                          Key points

                                                                                                                          • Aggressive ST rate hikes led by the US and followed by European developed countries
                                                                                                                          • LT rates seem to have peaked and fell MoM
                                                                                                                          • Japan with different policy sees almost no movements in both ST and LT rates
                                                                                                                          • US faced steepest inversion among developed countries; Japan maintains positive yield curve
                                                                                                                          
                                                                                                                          

                                                                                                                           

                                                                                                                          Click here to get the PDF with all charts and graphs

                                                                                                                           

                                                                                                                          Andrew’s books

                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • My Worst Investment Ever
                                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s online programs

                                                                                                                          • Valuation Master Class
                                                                                                                          • The Become a Better Investor Community
                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • Finance Made Ridiculously Simple
                                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                          • Achieve Your Goals
                                                                                                                          
                                                                                                                          

                                                                                                                          Connect with Andrew Stotz:

                                                                                                                          • astotz.com
                                                                                                                          • LinkedIn
                                                                                                                          • Facebook
                                                                                                                          • Instagram
                                                                                                                          • Twitter
                                                                                                                          • YouTube
                                                                                                                          • My Worst Investment Ever Podcast
                                                                                                                          
                                                                                                                          ]]>2d1fffd5-38c4-4b35-b4d2-49c3361616bfThu, 06 Apr 2023 06:03:00 +070008:23falsefullDeveloped Countries - Vast DM Country increases in ST and LT rates, Japan stays an outlier, US looks worst based on yield curve inversionISMS 14: Regional Interest Rates - Low in Asia, Egypt and Frontiers on FireDeveloped Market Regions - ST rates about to peak, LT rates are falling, inverted yield curve in DM Americas and Europe widened

                                                                                                                          Interest rate overview

                                                                                                                          • DM Americas 3m yield 4.8%, DM Europe 3%, DM Pacific much lower at 1.1%
                                                                                                                          • DM Americas 1yr yield 4.6%, DM Europe 2.8%, DM Pacific same as 3m yield at 1.1%
                                                                                                                          • DM Americas 10yr yield 3.5%, DM Europe 2.9%, DM Pacific 1.4% is higher than 3m and 1yr yield, normal yield curve
                                                                                                                          
                                                                                                                          

                                                                                                                          Year-on-year changes

                                                                                                                          • Biggest rise of 3m yield in Developed America
                                                                                                                          • World 3m yield was up 3.2ppts, DM Americas up 4.3ppts, DM Europe up 3.3ppts, DM Pacific up 1.1ppts
                                                                                                                          • Following 3m yield, 1yr yield YoY changes were most prominent in DM Americas and DM Europe
                                                                                                                          • World 1yr yield was up 1.9ppts, DM Americas up 3ppts, DM Europe up 2.9ppts, DM Pacific up 0.8ppts
                                                                                                                          • 10yr yield in DM Europe and DM Americas widened fastest, little movement in DM Pacific
                                                                                                                          • World 10yr yield was up 0.9ppts, DM Americas up 1.2ppts, DM Europe up 1.8ppts, DM Pacific up 0.4ppts
                                                                                                                          
                                                                                                                          

                                                                                                                          Rate progression

                                                                                                                          • 3m yield has risen most aggressively in DM Americas
                                                                                                                          • DM Europe yield moved at a similar pace to World
                                                                                                                          • DM Pacific yield only rose slightly, widening the 3m interest rate differential to other DM regions
                                                                                                                          • Unlike World, 1yr yield has fallen in all DM regions in March 2023
                                                                                                                          • 10yr yield in DM Americas and DM Europe moved up simultaneously
                                                                                                                          • DM Pacific 10yr yield stayed almost flat
                                                                                                                          • All DM 10yr rates fell MoM in March
                                                                                                                          
                                                                                                                          

                                                                                                                          Yield curve

                                                                                                                          • DM Americas yield curve has inverted the most among all DM regions
                                                                                                                          • In March 2023, the 3m yield was 1.3ppts higher than the 10yr yield
                                                                                                                          • The degree of inversion is similar to World
                                                                                                                          • DM Europe yield curve just inverted in March 2023
                                                                                                                          • The yield curve turned to negative territory as the 10yr yield dropped in March by 0.4ppts compared to February
                                                                                                                          • Though the inversion is much less extreme compared to World
                                                                                                                          • DM Pacific sees flattening yield curve over the past 12 months, but remains positive
                                                                                                                          • As of March 2023, the long-term 10yr yield was 0.3ppts higher compared to the short-term 3m yield
                                                                                                                          • One year earlier, the difference was 0.9ppts
                                                                                                                          
                                                                                                                          

                                                                                                                          Key points

                                                                                                                          • ST rates in DM Americas and Europe risen more aggressively than World, DM Pacific much slower
                                                                                                                          • Small increases in LT rate in all DM regions YoY, but fell MoM
                                                                                                                          • DM Pacific maintains a positive yield curve while inversion worsened in DM Americas and Europe
                                                                                                                          
                                                                                                                          

                                                                                                                          Emerging Market Regions - Massive ST rate hikes in ME&A and Frontier, LT rates more stable, no yield curve inversion in Asia

                                                                                                                          Interest rate overview

                                                                                                                          • EM Americas 3m yield 12.7%, EM Asia 3.2%, EM Europe 14.6%, EM ME&A 52.7%, Frontier markets 23%
                                                                                                                          • EM Americas 1yr yield 12.6%, EM Asia 3.2%, EM Europe 9.4%, EM ME&A at 23% is half 3m rate, Frontier markets 17.1%
                                                                                                                          • EM Americas 10yr yield 11.2%, EM Asia 3.6%, EM Europe 8.8%, EM ME&A 10yr yield  at 15.4%, 1/3rd of 3m rate, Frontier markets 10yr yield 11.9%, half 1yr
                                                                                                                          
                                                                                                                          

                                                                                                                          Year-on-year changes

                                                                                                                          • 3m yield has risen in all EM regions; it was most extreme in ME&A and Frontier markets
                                                                                                                          • EM Americas 3m yield was up 3.1ppts, EM Asia up 0.9ppts, EM Europe up 0.3ppts, EM ME&A 3m yield was up 43.2ppts, Frontier 3m yield was up 10.6ppts
                                                                                                                          • 1yr yield saw a rise in all EM regions YoY, except in EM Europe
                                                                                                                          • EM Americas 1yr yield was up 1.8ppts, EM Asia up 0.8ppts, EM Europe down 3ppts, EM ME&A up 9.2ppts, Frontier up 4.3ppts
                                                                                                                          • 10yr yield surged in all EM regions, except EM Europe
                                                                                                                          • EM Americas 10yr yield was up 1ppts, EM Asia up 0.1ppts, EM Europe down 2.7ppts, EM ME&A up 2.7ppts, Frontier up 3.4ppts
                                                                                                                          
                                                                                                                          

                                                                                                                          Rate progression

                                                                                                                          • 3m yield has moved in different directions among EM regions
                                                                                                                          • ME&A and Frontier saw extreme increases in their 3m rates mainly driven by Egypt
                                                                                                                          • EM Asia and EM Europe actually stayed flat over the past 12 months
                                                                                                                          • Spotlight on Egypt Inflation went from 9% to 32% in 12 months
                                                                                                                          • Russia and Ukraine account for 80% of Egypt’s wheat imports
                                                                                                                          • Since the war, import prices  skyrocketed
                                                                                                                          • 50% currency devaluation in 2016 and another 50% since March 2022
                                                                                                                          • 1yr yield in all EM regions higher than World, except Asia
                                                                                                                          • 10yr yield in EM regions were less fluctuating
                                                                                                                          • All EM regions have a higher long-term 10y yield than World
                                                                                                                          
                                                                                                                          

                                                                                                                          Yield curve

                                                                                                                          • EM Americas yield curve inverted slightly more than World
                                                                                                                          • EM Asia yield curve is the only EM regions which didn’t see an inversion of its yield curve yet
                                                                                                                          • Though, the yield curve has flattened over time
                                                                                                                          • In March, the difference between the 10y yield and 3m yield was just 0.4ppts
                                                                                                                          • One year earlier, the difference stood at 1.2ppts
                                                                                                                          • EM Europe yield curve inversion more than doubled over the past 12 months
                                                                                                                          • In March 2023, the long-term yield was 5.8ppts higher than the 3m yield
                                                                                                                          • 12 months ago, the difference was only 2.8ppts
                                                                                                                          • EM ME&A yield curve has massive inversion
                                                                                                                          • Given the aggressive increase in 3m yield, the inversion amounted to 37.4ppts in March 2023
                                                                                                                          • This compared to no inversion one year ago
                                                                                                                          • Frontier yield curve stays inverted in March 2023, but a bit less MoM
                                                                                                                          
                                                                                                                          

                                                                                                                          Key points

                                                                                                                          • ST rates exploded in ME&A and Frontier, EM Asia and Europe were more cautious in raising ST rates
                                                                                                                          • LT rates of all EM regions rose and remained above World; only EM Europe saw falling yield YoY
                                                                                                                          • Asia remains the sole EM region with no yield curve inversion, inversion looks painful for EM Europe, ME&A, and Frontier
                                                                                                                          
                                                                                                                          

                                                                                                                           

                                                                                                                          Click here to get the PDF with all charts and graphs

                                                                                                                           

                                                                                                                          Andrew’s books

                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • My Worst Investment Ever
                                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s online programs

                                                                                                                          • Valuation Master Class
                                                                                                                          • The Become a Better Investor Community
                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • Finance Made Ridiculously Simple
                                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                          • Achieve Your Goals
                                                                                                                          
                                                                                                                          

                                                                                                                          Connect with Andrew Stotz:

                                                                                                                          • astotz.com
                                                                                                                          • LinkedIn
                                                                                                                          • Facebook
                                                                                                                          • Instagram
                                                                                                                          • Twitter
                                                                                                                          • YouTube
                                                                                                                          • My Worst Investment Ever Podcast
                                                                                                                          
                                                                                                                          ]]>Developed Market Regions - ST rates about to peak, LT rates are falling, inverted yield curve in DM Americas and Europe widened

                                                                                                                          Interest rate overview

                                                                                                                          • DM Americas 3m yield 4.8%, DM Europe 3%, DM Pacific much lower at 1.1%
                                                                                                                          • DM Americas 1yr yield 4.6%, DM Europe 2.8%, DM Pacific same as 3m yield at 1.1%
                                                                                                                          • DM Americas 10yr yield 3.5%, DM Europe 2.9%, DM Pacific 1.4% is higher than 3m and 1yr yield, normal yield curve
                                                                                                                          
                                                                                                                          

                                                                                                                          Year-on-year changes

                                                                                                                          • Biggest rise of 3m yield in Developed America
                                                                                                                          • World 3m yield was up 3.2ppts, DM Americas up 4.3ppts, DM Europe up 3.3ppts, DM Pacific up 1.1ppts
                                                                                                                          • Following 3m yield, 1yr yield YoY changes were most prominent in DM Americas and DM Europe
                                                                                                                          • World 1yr yield was up 1.9ppts, DM Americas up 3ppts, DM Europe up 2.9ppts, DM Pacific up 0.8ppts
                                                                                                                          • 10yr yield in DM Europe and DM Americas widened fastest, little movement in DM Pacific
                                                                                                                          • World 10yr yield was up 0.9ppts, DM Americas up 1.2ppts, DM Europe up 1.8ppts, DM Pacific up 0.4ppts
                                                                                                                          
                                                                                                                          

                                                                                                                          Rate progression

                                                                                                                          • 3m yield has risen most aggressively in DM Americas
                                                                                                                          • DM Europe yield moved at a similar pace to World
                                                                                                                          • DM Pacific yield only rose slightly, widening the 3m interest rate differential to other DM regions
                                                                                                                          • Unlike World, 1yr yield has fallen in all DM regions in March 2023
                                                                                                                          • 10yr yield in DM Americas and DM Europe moved up simultaneously
                                                                                                                          • DM Pacific 10yr yield stayed almost flat
                                                                                                                          • All DM 10yr rates fell MoM in March
                                                                                                                          
                                                                                                                          

                                                                                                                          Yield curve

                                                                                                                          • DM Americas yield curve has inverted the most among all DM regions
                                                                                                                          • In March 2023, the 3m yield was 1.3ppts higher than the 10yr yield
                                                                                                                          • The degree of inversion is similar to World
                                                                                                                          • DM Europe yield curve just inverted in March 2023
                                                                                                                          • The yield curve turned to negative territory as the 10yr yield dropped in March by 0.4ppts compared to February
                                                                                                                          • Though the inversion is much less extreme compared to World
                                                                                                                          • DM Pacific sees flattening yield curve over the past 12 months, but remains positive
                                                                                                                          • As of March 2023, the long-term 10yr yield was 0.3ppts higher compared to the short-term 3m yield
                                                                                                                          • One year earlier, the difference was 0.9ppts
                                                                                                                          
                                                                                                                          

                                                                                                                          Key points

                                                                                                                          • ST rates in DM Americas and Europe risen more aggressively than World, DM Pacific much slower
                                                                                                                          • Small increases in LT rate in all DM regions YoY, but fell MoM
                                                                                                                          • DM Pacific maintains a positive yield curve while inversion worsened in DM Americas and Europe
                                                                                                                          
                                                                                                                          

                                                                                                                          Emerging Market Regions - Massive ST rate hikes in ME&A and Frontier, LT rates more stable, no yield curve inversion in Asia

                                                                                                                          Interest rate overview

                                                                                                                          • EM Americas 3m yield 12.7%, EM Asia 3.2%, EM Europe 14.6%, EM ME&A 52.7%, Frontier markets 23%
                                                                                                                          • EM Americas 1yr yield 12.6%, EM Asia 3.2%, EM Europe 9.4%, EM ME&A at 23% is half 3m rate, Frontier markets 17.1%
                                                                                                                          • EM Americas 10yr yield 11.2%, EM Asia 3.6%, EM Europe 8.8%, EM ME&A 10yr yield  at 15.4%, 1/3rd of 3m rate, Frontier markets 10yr yield 11.9%, half 1yr
                                                                                                                          
                                                                                                                          

                                                                                                                          Year-on-year changes

                                                                                                                          • 3m yield has risen in all EM regions; it was most extreme in ME&A and Frontier markets
                                                                                                                          • EM Americas 3m yield was up 3.1ppts, EM Asia up 0.9ppts, EM Europe up 0.3ppts, EM ME&A 3m yield was up 43.2ppts, Frontier 3m yield was up 10.6ppts
                                                                                                                          • 1yr yield saw a rise in all EM regions YoY, except in EM Europe
                                                                                                                          • EM Americas 1yr yield was up 1.8ppts, EM Asia up 0.8ppts, EM Europe down 3ppts, EM ME&A up 9.2ppts, Frontier up 4.3ppts
                                                                                                                          • 10yr yield surged in all EM regions, except EM Europe
                                                                                                                          • EM Americas 10yr yield was up 1ppts, EM Asia up 0.1ppts, EM Europe down 2.7ppts, EM ME&A up 2.7ppts, Frontier up 3.4ppts
                                                                                                                          
                                                                                                                          

                                                                                                                          Rate progression

                                                                                                                          • 3m yield has moved in different directions among EM regions
                                                                                                                          • ME&A and Frontier saw extreme increases in their 3m rates mainly driven by Egypt
                                                                                                                          • EM Asia and EM Europe actually stayed flat over the past 12 months
                                                                                                                          • Spotlight on Egypt Inflation went from 9% to 32% in 12 months
                                                                                                                          • Russia and Ukraine account for 80% of Egypt’s wheat imports
                                                                                                                          • Since the war, import prices  skyrocketed
                                                                                                                          • 50% currency devaluation in 2016 and another 50% since March 2022
                                                                                                                          • 1yr yield in all EM regions higher than World, except Asia
                                                                                                                          • 10yr yield in EM regions were less fluctuating
                                                                                                                          • All EM regions have a higher long-term 10y yield than World
                                                                                                                          
                                                                                                                          

                                                                                                                          Yield curve

                                                                                                                          • EM Americas yield curve inverted slightly more than World
                                                                                                                          • EM Asia yield curve is the only EM regions which didn’t see an inversion of its yield curve yet
                                                                                                                          • Though, the yield curve has flattened over time
                                                                                                                          • In March, the difference between the 10y yield and 3m yield was just 0.4ppts
                                                                                                                          • One year earlier, the difference stood at 1.2ppts
                                                                                                                          • EM Europe yield curve inversion more than doubled over the past 12 months
                                                                                                                          • In March 2023, the long-term yield was 5.8ppts higher than the 3m yield
                                                                                                                          • 12 months ago, the difference was only 2.8ppts
                                                                                                                          • EM ME&A yield curve has massive inversion
                                                                                                                          • Given the aggressive increase in 3m yield, the inversion amounted to 37.4ppts in March 2023
                                                                                                                          • This compared to no inversion one year ago
                                                                                                                          • Frontier yield curve stays inverted in March 2023, but a bit less MoM
                                                                                                                          
                                                                                                                          

                                                                                                                          Key points

                                                                                                                          • ST rates exploded in ME&A and Frontier, EM Asia and Europe were more cautious in raising ST rates
                                                                                                                          • LT rates of all EM regions rose and remained above World; only EM Europe saw falling yield YoY
                                                                                                                          • Asia remains the sole EM region with no yield curve inversion, inversion looks painful for EM Europe, ME&A, and Frontier
                                                                                                                          
                                                                                                                          

                                                                                                                           

                                                                                                                          Click here to get the PDF with all charts and graphs

                                                                                                                           

                                                                                                                          Andrew’s books

                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • My Worst Investment Ever
                                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s online programs

                                                                                                                          • Valuation Master Class
                                                                                                                          • The Become a Better Investor Community
                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • Finance Made Ridiculously Simple
                                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                          • Achieve Your Goals
                                                                                                                          
                                                                                                                          

                                                                                                                          Connect with Andrew Stotz:

                                                                                                                          • astotz.com
                                                                                                                          • LinkedIn
                                                                                                                          • Facebook
                                                                                                                          • Instagram
                                                                                                                          • Twitter
                                                                                                                          • YouTube
                                                                                                                          • My Worst Investment Ever Podcast
                                                                                                                          
                                                                                                                          ]]>a80dd72b-7fcb-4447-bc13-dba44f5f2ad9Thu, 06 Apr 2023 06:02:00 +070017:36falsefullDeveloped Market Regions - ST rates about to peak, LT rates are falling, inverted yield curve in DM Americas and Europe widenedISMS 13: Global Interest Rates - Hikes Slow, Inversion Signals RecessionWorld - End of DM ST rate rise, inverted yield curves remain, high rates in EM

                                                                                                                          Level – High ST global and EM rates, yield curve inversion

                                                                                                                          • World ST rates at 5.3%, DM 3.6%, EM 7.7%
                                                                                                                          • World 1yr rates at 4.4%, DM 3.4%, EM 5.8%
                                                                                                                          • World 10yr rates at 4.1%, DM 3.0%, EM 5.6%
                                                                                                                          
                                                                                                                          

                                                                                                                          YoY rise – ST rates up massively YoY, small increase in LT rates

                                                                                                                          • World 3m yield was up 3.2ppts, DM up 3.5ppts, EM up 2.6ppts
                                                                                                                          • World 1yr yield was up 1.9ppts, DM up 2.6ppts, EM up 0.7ppts
                                                                                                                          • World 10yr yield was up 0.9ppts, DM up 1.3ppts, EM up 0.1ppts
                                                                                                                          
                                                                                                                          

                                                                                                                          Progression – ST rate rise stopped in DM, DM LT rates fell MoM

                                                                                                                          • 3m yield consistently grew over the past 12 months, but DM is flat MoM
                                                                                                                          • World 1yr yield has fallen for the first time in March 2023, driven by fall in DM
                                                                                                                          • 10yr yield has risen less extreme compared to short-term rates, again DM fell MoM
                                                                                                                          
                                                                                                                          

                                                                                                                           

                                                                                                                          Click here to get the PDF with all charts and graphs

                                                                                                                           

                                                                                                                          Andrew’s books

                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • My Worst Investment Ever
                                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s online programs

                                                                                                                          • Valuation Master Class
                                                                                                                          • The Become a Better Investor Community
                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • Finance Made Ridiculously Simple
                                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                          • Achieve Your Goals
                                                                                                                          
                                                                                                                          

                                                                                                                          Connect with Andrew Stotz:

                                                                                                                          • astotz.com
                                                                                                                          • LinkedIn
                                                                                                                          • Facebook
                                                                                                                          • Instagram
                                                                                                                          • Twitter
                                                                                                                          • YouTube
                                                                                                                          • My Worst Investment Ever Podcast
                                                                                                                          
                                                                                                                          ]]>World - End of DM ST rate rise, inverted yield curves remain, high rates in EM

                                                                                                                          Level – High ST global and EM rates, yield curve inversion

                                                                                                                          • World ST rates at 5.3%, DM 3.6%, EM 7.7%
                                                                                                                          • World 1yr rates at 4.4%, DM 3.4%, EM 5.8%
                                                                                                                          • World 10yr rates at 4.1%, DM 3.0%, EM 5.6%
                                                                                                                          
                                                                                                                          

                                                                                                                          YoY rise – ST rates up massively YoY, small increase in LT rates

                                                                                                                          • World 3m yield was up 3.2ppts, DM up 3.5ppts, EM up 2.6ppts
                                                                                                                          • World 1yr yield was up 1.9ppts, DM up 2.6ppts, EM up 0.7ppts
                                                                                                                          • World 10yr yield was up 0.9ppts, DM up 1.3ppts, EM up 0.1ppts
                                                                                                                          
                                                                                                                          

                                                                                                                          Progression – ST rate rise stopped in DM, DM LT rates fell MoM

                                                                                                                          • 3m yield consistently grew over the past 12 months, but DM is flat MoM
                                                                                                                          • World 1yr yield has fallen for the first time in March 2023, driven by fall in DM
                                                                                                                          • 10yr yield has risen less extreme compared to short-term rates, again DM fell MoM
                                                                                                                          
                                                                                                                          

                                                                                                                           

                                                                                                                          Click here to get the PDF with all charts and graphs

                                                                                                                           

                                                                                                                          Andrew’s books

                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • My Worst Investment Ever
                                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s online programs

                                                                                                                          • Valuation Master Class
                                                                                                                          • The Become a Better Investor Community
                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • Finance Made Ridiculously Simple
                                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                          • Achieve Your Goals
                                                                                                                          
                                                                                                                          

                                                                                                                          Connect with Andrew Stotz:

                                                                                                                          • astotz.com
                                                                                                                          • LinkedIn
                                                                                                                          • Facebook
                                                                                                                          • Instagram
                                                                                                                          • Twitter
                                                                                                                          • YouTube
                                                                                                                          • My Worst Investment Ever Podcast
                                                                                                                          
                                                                                                                          ]]>b14658bb-c07c-4365-aa7a-65c9cb4c6b5dThu, 06 Apr 2023 06:01:00 +070014:53falsefullWorld - End of DM ST rate rise, inverted yield curves remain, high rates in EMPeter Ricchiuti – Don’t Fall in Love With a StockBIO: Peter Ricchiuti is a graduate of Babson College and began his career with the investment firm Kidder Peabody in Boston. He later managed Louisiana’s $3 billion investment portfolio while serving as the assistant state treasurer.

                                                                                                                          STORY: Peter made the mistake of falling in love with a particular stock and hyped it to his clients. The company had no moat and couldn’t stand the competition. Peter’s reputation was severely affected after the stock price fell significantly.

                                                                                                                          LEARNING: Don’t fall in love with a stock. Diversification is key.

                                                                                                                           

                                                                                                                          “If you meet a money manager and they tell you they’ve never had any big losers, just run because losses are part of the game.”

                                                                                                                          Peter Ricchiuti

                                                                                                                           

                                                                                                                          Guest profile

                                                                                                                          Peter Ricchiuti is a graduate of Babson College and began his career with the investment firm Kidder Peabody in Boston. He later managed Louisiana’s $3 billion investment portfolio while serving as the assistant state treasurer.

                                                                                                                          From Memphis to Mars (PA), Peter has addressed more than 1,200 groups in 47 states and several countries. He has been featured in BARRON’S, Kiplinger’s, The New York Times and The Wall Street Journal. He also hosts a popular weekly business show on National Public Radio in New Orleans called “Out To Lunch.”

                                                                                                                          Worst investment ever

                                                                                                                          Peter got interested in a new company making soft soap that would replace the bar soap, which it did. The stock was trading at around $19 a share, and Peter just fell in love with it. He got many blatant signals that this would not work, but he ignored them.

                                                                                                                          At first, the stock performed very well. However, the company had no moat. So the stock started falling. It got to $9, and Peter was beside himself because he had the stock in many client accounts as a speculative stock. The stock price just kept falling.

                                                                                                                          As a broker, Peter’s biggest loss was not the money but the fact that his entire clientele and institutional salespeople wouldn’t believe him anymore.

                                                                                                                          Lessons learned

                                                                                                                          • Diversification is crucial.
                                                                                                                          • Don’t fall in love with a stock.
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s takeaways

                                                                                                                          • Just because a company or a CEO has an idea and is implementing it well doesn’t mean they can hold on to it.
                                                                                                                          
                                                                                                                          

                                                                                                                          Actionable advice

                                                                                                                          Think of all the downsides before you take a position.

                                                                                                                          Peter’s recommendations

                                                                                                                          Peter recommends reading How to Invest: Masters on the Craft to learn more about investing.

                                                                                                                          No.1 goal for the next 12 months

                                                                                                                          Peter’s number one goal for the next 12 months is to dig deeper into a few stocks he liked a couple of years ago and are now selling for much lower prices.

                                                                                                                           

                                                                                                                          [spp-transcript]

                                                                                                                           

                                                                                                                          Connect with Peter Ricchiuti

                                                                                                                          • Website
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s books

                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • My Worst Investment Ever
                                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s online programs

                                                                                                                          • Valuation Master Class
                                                                                                                          • The Become a Better Investor Community
                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • Finance Made Ridiculously Simple
                                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                          • Achieve Your Goals
                                                                                                                          
                                                                                                                          

                                                                                                                          Connect with Andrew Stotz:

                                                                                                                          • astotz.com
                                                                                                                          • LinkedIn
                                                                                                                          • Facebook
                                                                                                                          • Instagram
                                                                                                                          • Twitter
                                                                                                                          • YouTube
                                                                                                                          • My Worst Investment Ever Podcast
                                                                                                                          
                                                                                                                          

                                                                                                                          Further reading mentioned

                                                                                                                          • David M. Rubenstein (September 2022), How to Invest: Masters on the Craft
                                                                                                                          
                                                                                                                          ]]>BIO: Peter Ricchiuti is a graduate of Babson College and began his career with the investment firm Kidder Peabody in Boston. He later managed Louisiana’s $3 billion investment portfolio while serving as the assistant state treasurer.

                                                                                                                          STORY: Peter made the mistake of falling in love with a particular stock and hyped it to his clients. The company had no moat and couldn’t stand the competition. Peter’s reputation was severely affected after the stock price fell significantly.

                                                                                                                          LEARNING: Don’t fall in love with a stock. Diversification is key.

                                                                                                                           

                                                                                                                          “If you meet a money manager and they tell you they’ve never had any big losers, just run because losses are part of the game.”

                                                                                                                          Peter Ricchiuti

                                                                                                                           

                                                                                                                          Guest profile

                                                                                                                          Peter Ricchiuti is a graduate of Babson College and began his career with the investment firm Kidder Peabody in Boston. He later managed Louisiana’s $3 billion investment portfolio while serving as the assistant state treasurer.

                                                                                                                          From Memphis to Mars (PA), Peter has addressed more than 1,200 groups in 47 states and several countries. He has been featured in BARRON’S, Kiplinger’s, The New York Times and The Wall Street Journal. He also hosts a popular weekly business show on National Public Radio in New Orleans called “Out To Lunch.”

                                                                                                                          Worst investment ever

                                                                                                                          Peter got interested in a new company making soft soap that would replace the bar soap, which it did. The stock was trading at around $19 a share, and Peter just fell in love with it. He got many blatant signals that this would not work, but he ignored them.

                                                                                                                          At first, the stock performed very well. However, the company had no moat. So the stock started falling. It got to $9, and Peter was beside himself because he had the stock in many client accounts as a speculative stock. The stock price just kept falling.

                                                                                                                          As a broker, Peter’s biggest loss was not the money but the fact that his entire clientele and institutional salespeople wouldn’t believe him anymore.

                                                                                                                          Lessons learned

                                                                                                                          • Diversification is crucial.
                                                                                                                          • Don’t fall in love with a stock.
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s takeaways

                                                                                                                          • Just because a company or a CEO has an idea and is implementing it well doesn’t mean they can hold on to it.
                                                                                                                          
                                                                                                                          

                                                                                                                          Actionable advice

                                                                                                                          Think of all the downsides before you take a position.

                                                                                                                          Peter’s recommendations

                                                                                                                          Peter recommends reading How to Invest: Masters on the Craft to learn more about investing.

                                                                                                                          No.1 goal for the next 12 months

                                                                                                                          Peter’s number one goal for the next 12 months is to dig deeper into a few stocks he liked a couple of years ago and are now selling for much lower prices.

                                                                                                                           

                                                                                                                          [spp-transcript]

                                                                                                                           

                                                                                                                          Connect with Peter Ricchiuti

                                                                                                                          • Website
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s books

                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • My Worst Investment Ever
                                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s online programs

                                                                                                                          • Valuation Master Class
                                                                                                                          • The Become a Better Investor Community
                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • Finance Made Ridiculously Simple
                                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                          • Achieve Your Goals
                                                                                                                          
                                                                                                                          

                                                                                                                          Connect with Andrew Stotz:

                                                                                                                          • astotz.com
                                                                                                                          • LinkedIn
                                                                                                                          • Facebook
                                                                                                                          • Instagram
                                                                                                                          • Twitter
                                                                                                                          • YouTube
                                                                                                                          • My Worst Investment Ever Podcast
                                                                                                                          
                                                                                                                          

                                                                                                                          Further reading mentioned

                                                                                                                          • David M. Rubenstein (September 2022), How to Invest: Masters on the Craft
                                                                                                                          
                                                                                                                          ]]>0ba01606-51f0-4096-a5ed-c94f4e07c10dThu, 06 Apr 2023 06:00:00 +070030:18falsefullPeter Ricchiuti is a graduate of Babson College and began his career with the investment firm Kidder Peabody in Boston. He later managed Louisiana’s $3 billion investment portfolio while serving as the assistant state treasurer.Jason Hsu – The Market Can Be Crazy for Longer than You Have the ConvictionBIO: Jason Hsu is the founder, chairman, and CIO of Rayliant Global Advisors (RGA), a global investment management group with over US$15+ billion in assets managed using its strategies as of June 30, 2022.

                                                                                                                          STORY: Jason bet against the GameStop short squeeze and learned that John Maynard Keyens’ saying that “markets can remain irrational longer than you can remain solvent” still holds true.

                                                                                                                          LEARNING: The market can be crazy for longer than you have the conviction to stay invested. Apply position constraints and diversify.

                                                                                                                           

                                                                                                                          “In the short run, the market can really stay crazy for longer than you have the money to stay on. And if you forget that, the market will remind you in as painful of a way as possible.”

                                                                                                                          Jason Hsu

                                                                                                                           

                                                                                                                          Guest profile

                                                                                                                          Jason Hsu is the founder, chairman, and CIO of Rayliant Global Advisors (RGA), a global investment management group with over US$15+ billion in assets managed using its strategies as of June 30, 2022. Rayliant applies quantitative methods to access behavioral-based alpha prevalent in inefficient markets like China. Jason also co-founded Research Affiliates, a smart beta and asset allocation leader with over US$143 billion in assets managed using its strategies.

                                                                                                                          Worst investment ever

                                                                                                                          GameStop is a sleepy, almost dead brick-and-mortar retail store selling video games that come in a DVD ROM you put into your laptop to play. It sells cartridges for your Nintendo. In a world where online games are reigning, GameStop is definitely a dying business, and the stock price shows it.

                                                                                                                          Two years ago, the stock price was trading at a couple of bucks. A forum on Reddit started hyping the stock and convincing everyone that hedge funds shorted GameStop since they had realized the company would declare bankruptcy. The forum insisted it was a good time to do a short squeeze and screw the hedge funds. All this started as a joke, but in no time, the share price got to as high as $300.

                                                                                                                          When Jason first caught wind of this, he thought the situation would make a fascinating case study. Jason would do a case study and use it to teach his MBA class about how markets can become inefficient and how these prices clearly violate any rationality.

                                                                                                                          After a while, the stock price started pulling back and gradually falling. By that time, most people had recognized that it was just a crazy short squeeze, and now things were going back to normal. Jason figured the stock price would drop to $30 or $40. He decided to make a bet on that. This was when the second wave of the leading stock rally on GME happened, and the stock, for bout a two-three day run, went from $40 to $200. Jason lost a lot of money on that bet.

                                                                                                                          Lessons learned

                                                                                                                          • The market can be crazy for longer than you have the conviction to stay invested.
                                                                                                                          • Be diversified. Don’t research one stock and bet big on it. Have lots of research and lots of uncorrelated possibilities.
                                                                                                                          • Apply position constraints so your portfolio is well diversified.
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s takeaways

                                                                                                                          • The market can wear you down, but that doesn’t mean you’re wrong. It just means that your timing was terrible.
                                                                                                                          • Stop losses is a great way to protect you from an inefficient market.
                                                                                                                          
                                                                                                                          

                                                                                                                          Actionable advice

                                                                                                                          Apply risk management through a stop loss or position constraint. It doesn’t matter how convinced and sure you are about a stock; size it so that if you lose the entire position, you won’t commit suicide because the pain is intolerable.

                                                                                                                          Jason’s recommendations

                                                                                                                          Jason recommends following him on LinkedIn, where he posts his commentaries, random musings, and links to his research papers.

                                                                                                                          No.1 goal for the next 12 months

                                                                                                                          Jason’s number one goal for the next 12 months is to stay alert as he observes the bonding process for global equities. He hopes to participate in the next global bull market cycle.

                                                                                                                          No.1 goal for the next 12 months

                                                                                                                          Jason’s number one goal for the next 12 months is to stay alert as he observes the bonding process for global equities. He hopes to participate in the next global bull market cycle.

                                                                                                                          Parting words

                                                                                                                           

                                                                                                                          “Always ask yourself before you make any trade; am I smarter than the person who’s selling me that share of stock?”

                                                                                                                          Jason Hsu

                                                                                                                           

                                                                                                                          [spp-transcript]

                                                                                                                           

                                                                                                                          Connect with Jason Hsu

                                                                                                                          • LinkedIn
                                                                                                                          • Twitter
                                                                                                                          • Website
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s books

                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • My Worst Investment Ever
                                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s online programs

                                                                                                                          • Valuation Master Class
                                                                                                                          • The Become a Better Investor Community
                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • Finance Made Ridiculously Simple
                                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                          • Achieve Your Goals
                                                                                                                          
                                                                                                                          

                                                                                                                          Connect with Andrew Stotz:

                                                                                                                          • astotz.com
                                                                                                                          • LinkedIn
                                                                                                                          • Facebook
                                                                                                                          • Instagram
                                                                                                                          • Twitter
                                                                                                                          • YouTube
                                                                                                                          • My Worst Investment Ever Podcast
                                                                                                                          
                                                                                                                          ]]>BIO: Jason Hsu is the founder, chairman, and CIO of Rayliant Global Advisors (RGA), a global investment management group with over US$15+ billion in assets managed using its strategies as of June 30, 2022.

                                                                                                                          STORY: Jason bet against the GameStop short squeeze and learned that John Maynard Keyens’ saying that “markets can remain irrational longer than you can remain solvent” still holds true.

                                                                                                                          LEARNING: The market can be crazy for longer than you have the conviction to stay invested. Apply position constraints and diversify.

                                                                                                                           

                                                                                                                          “In the short run, the market can really stay crazy for longer than you have the money to stay on. And if you forget that, the market will remind you in as painful of a way as possible.”

                                                                                                                          Jason Hsu

                                                                                                                           

                                                                                                                          Guest profile

                                                                                                                          Jason Hsu is the founder, chairman, and CIO of Rayliant Global Advisors (RGA), a global investment management group with over US$15+ billion in assets managed using its strategies as of June 30, 2022. Rayliant applies quantitative methods to access behavioral-based alpha prevalent in inefficient markets like China. Jason also co-founded Research Affiliates, a smart beta and asset allocation leader with over US$143 billion in assets managed using its strategies.

                                                                                                                          Worst investment ever

                                                                                                                          GameStop is a sleepy, almost dead brick-and-mortar retail store selling video games that come in a DVD ROM you put into your laptop to play. It sells cartridges for your Nintendo. In a world where online games are reigning, GameStop is definitely a dying business, and the stock price shows it.

                                                                                                                          Two years ago, the stock price was trading at a couple of bucks. A forum on Reddit started hyping the stock and convincing everyone that hedge funds shorted GameStop since they had realized the company would declare bankruptcy. The forum insisted it was a good time to do a short squeeze and screw the hedge funds. All this started as a joke, but in no time, the share price got to as high as $300.

                                                                                                                          When Jason first caught wind of this, he thought the situation would make a fascinating case study. Jason would do a case study and use it to teach his MBA class about how markets can become inefficient and how these prices clearly violate any rationality.

                                                                                                                          After a while, the stock price started pulling back and gradually falling. By that time, most people had recognized that it was just a crazy short squeeze, and now things were going back to normal. Jason figured the stock price would drop to $30 or $40. He decided to make a bet on that. This was when the second wave of the leading stock rally on GME happened, and the stock, for bout a two-three day run, went from $40 to $200. Jason lost a lot of money on that bet.

                                                                                                                          Lessons learned

                                                                                                                          • The market can be crazy for longer than you have the conviction to stay invested.
                                                                                                                          • Be diversified. Don’t research one stock and bet big on it. Have lots of research and lots of uncorrelated possibilities.
                                                                                                                          • Apply position constraints so your portfolio is well diversified.
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s takeaways

                                                                                                                          • The market can wear you down, but that doesn’t mean you’re wrong. It just means that your timing was terrible.
                                                                                                                          • Stop losses is a great way to protect you from an inefficient market.
                                                                                                                          
                                                                                                                          

                                                                                                                          Actionable advice

                                                                                                                          Apply risk management through a stop loss or position constraint. It doesn’t matter how convinced and sure you are about a stock; size it so that if you lose the entire position, you won’t commit suicide because the pain is intolerable.

                                                                                                                          Jason’s recommendations

                                                                                                                          Jason recommends following him on LinkedIn, where he posts his commentaries, random musings, and links to his research papers.

                                                                                                                          No.1 goal for the next 12 months

                                                                                                                          Jason’s number one goal for the next 12 months is to stay alert as he observes the bonding process for global equities. He hopes to participate in the next global bull market cycle.

                                                                                                                          No.1 goal for the next 12 months

                                                                                                                          Jason’s number one goal for the next 12 months is to stay alert as he observes the bonding process for global equities. He hopes to participate in the next global bull market cycle.

                                                                                                                          Parting words

                                                                                                                           

                                                                                                                          “Always ask yourself before you make any trade; am I smarter than the person who’s selling me that share of stock?”

                                                                                                                          Jason Hsu

                                                                                                                           

                                                                                                                          [spp-transcript]

                                                                                                                           

                                                                                                                          Connect with Jason Hsu

                                                                                                                          • LinkedIn
                                                                                                                          • Twitter
                                                                                                                          • Website
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s books

                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • My Worst Investment Ever
                                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s online programs

                                                                                                                          • Valuation Master Class
                                                                                                                          • The Become a Better Investor Community
                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • Finance Made Ridiculously Simple
                                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                          • Achieve Your Goals
                                                                                                                          
                                                                                                                          

                                                                                                                          Connect with Andrew Stotz:

                                                                                                                          • astotz.com
                                                                                                                          • LinkedIn
                                                                                                                          • Facebook
                                                                                                                          • Instagram
                                                                                                                          • Twitter
                                                                                                                          • YouTube
                                                                                                                          • My Worst Investment Ever Podcast
                                                                                                                          
                                                                                                                          ]]>04ff1b30-ea5e-450e-a887-6652bdde1330Wed, 05 Apr 2023 06:00:00 +070054:41falsefullJason Hsu is the founder, chairman, and CIO of Rayliant Global Advisors (RGA), a global investment management group with over US$15+ billion in assets managed using its strategies as of June 30, 2022.Shreekkanth Viswanathan – Qualitative Strengths of a Company Matter TooBIO: Shreekkanth (“Shree”) Viswanathan is the founder and portfolio manager of SVN Capital, a Chicago-based, concentrated, long-only, global equity-focused fund.

                                                                                                                          STORY: Shree’s biggest mistake is an error of omission. That is, after studying a particular business, he decided not to invest in it for various reasons. The stock turned out to be a multi-bagger a couple of years later.

                                                                                                                          LEARNING: The qualitative strengths of a company are not always readily apparent in the financials. Get out and work in business; it will make you a better analyst and investor.

                                                                                                                           

                                                                                                                          “If you don’t know who you are, the market is an expensive place to find out.”

                                                                                                                          Shreekkanth Viswanathan

                                                                                                                           

                                                                                                                          Guest profile

                                                                                                                          Shreekkanth (“Shree”) Viswanathan is the founder and portfolio manager of SVN Capital, a Chicago-based, concentrated, long-only, global equity-focused fund.

                                                                                                                          After graduating from the University of Chicago, Shree worked as an investment banker for a few years before moving over to the buy side. Shree describes his investment style as Value investing with a Quality overlay.

                                                                                                                          Worst investment ever

                                                                                                                          Back in 2009, Shree was working as an analyst in Chicago. As the economy struggled to come out of the real estate-centered malaise, Shree studied a company called Copart Inc. Copart is the largest salvage yard company in the US. Its business model is pretty simple. When a vehicle on the road gets into an accident, it’s hauled to a salvage yard. The insurance company covering that vehicle will quickly decide if they will pay the policyholder for repairs or total the vehicle and send it to the salvage yard. For various reasons, more and more insurance companies send damaged cars to the salvage yard.

                                                                                                                          At the salvage yard, these vehicles are auctioned, and buyers will buy them to get parts, fix up their cars, or pull the parts and sell them. So, in any case, Copart is the middleman and gets paid from both sides.

                                                                                                                          From its early days, the founder, Willis Johnson, had decided to own the land on which the salvage yards operate instead of leasing it. Given that real estate was the epicenter of the 2008/9 financial crisis, many businesses were cheap. Shree had been studying Copart and was impressed by the price. The market cap was about US$350 million. At that price, Shree would be paying for just the land in all the salvage yards that the company owns (about 140 yards around the country). He’d be getting the operations for free. That was the hypothesis Shree was working off. He did more research and then concluded that he wasn’t only paying for the land at that price.

                                                                                                                          After reaching that conclusion, Shree decided to move on. There were lots of other options. Over time as the economy improved and Copart’s earnings and cash flow improved, the stock price reflected that improvement. Shree was just on the sidelines, watching the stock go up. By 2020, the stock was up 10x from 2009.

                                                                                                                          Lessons learned

                                                                                                                          • The qualitative strengths of a company are not always readily apparent in the financials.
                                                                                                                          • Try understanding the strengths of the management teams of the companies you intend to invest in.
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s takeaways

                                                                                                                          • Get out and work in business. It will make you a better analyst and investor.
                                                                                                                          
                                                                                                                          

                                                                                                                          Actionable advice

                                                                                                                          Investing is an individual sport, and we each have to play to our strengths.

                                                                                                                          Shree’s recommendations

                                                                                                                          Shree recommends finding ways that help you get the vision, courage, and patience to invest.

                                                                                                                          No.1 goal for the next 12 months

                                                                                                                          Shree’s number one goal for the next 12 months is to find at least one new stock that can be a multi-bagger.

                                                                                                                          Parting words

                                                                                                                           

                                                                                                                          “Better late than never. I sincerely appreciate you, Andrew, for taking the time and having me on your wonderful podcast.”

                                                                                                                          Shreekkanth Viswanathan

                                                                                                                           

                                                                                                                          [spp-transcript]

                                                                                                                           

                                                                                                                          Connect with Shreekkanth Viswanathan

                                                                                                                          • LinkedIn
                                                                                                                          • Twitter
                                                                                                                          • Website
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s books

                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • My Worst Investment Ever
                                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s online programs

                                                                                                                          • Valuation Master Class
                                                                                                                          • The Become a Better Investor Community
                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • Finance Made Ridiculously Simple
                                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                          • Achieve Your Goals
                                                                                                                          
                                                                                                                          

                                                                                                                          Connect with Andrew Stotz:

                                                                                                                          • astotz.com
                                                                                                                          • LinkedIn
                                                                                                                          • Facebook
                                                                                                                          • Instagram
                                                                                                                          • Twitter
                                                                                                                          • YouTube
                                                                                                                          • My Worst Investment Ever Podcast
                                                                                                                          
                                                                                                                          

                                                                                                                          Further reading mentioned

                                                                                                                          • Peter Thiel (September 2014), Zero to One: Notes on Startups, or How to Build the Future
                                                                                                                          • Thomas William Phelps (August 2021), 100 to 1 in the Stock Market: A Distinguished Security Analyst Tells How to Make More of Your Investment Opportunities
                                                                                                                          
                                                                                                                          ]]>BIO: Shreekkanth (“Shree”) Viswanathan is the founder and portfolio manager of SVN Capital, a Chicago-based, concentrated, long-only, global equity-focused fund.

                                                                                                                          STORY: Shree’s biggest mistake is an error of omission. That is, after studying a particular business, he decided not to invest in it for various reasons. The stock turned out to be a multi-bagger a couple of years later.

                                                                                                                          LEARNING: The qualitative strengths of a company are not always readily apparent in the financials. Get out and work in business; it will make you a better analyst and investor.

                                                                                                                           

                                                                                                                          “If you don’t know who you are, the market is an expensive place to find out.”

                                                                                                                          Shreekkanth Viswanathan

                                                                                                                           

                                                                                                                          Guest profile

                                                                                                                          Shreekkanth (“Shree”) Viswanathan is the founder and portfolio manager of SVN Capital, a Chicago-based, concentrated, long-only, global equity-focused fund.

                                                                                                                          After graduating from the University of Chicago, Shree worked as an investment banker for a few years before moving over to the buy side. Shree describes his investment style as Value investing with a Quality overlay.

                                                                                                                          Worst investment ever

                                                                                                                          Back in 2009, Shree was working as an analyst in Chicago. As the economy struggled to come out of the real estate-centered malaise, Shree studied a company called Copart Inc. Copart is the largest salvage yard company in the US. Its business model is pretty simple. When a vehicle on the road gets into an accident, it’s hauled to a salvage yard. The insurance company covering that vehicle will quickly decide if they will pay the policyholder for repairs or total the vehicle and send it to the salvage yard. For various reasons, more and more insurance companies send damaged cars to the salvage yard.

                                                                                                                          At the salvage yard, these vehicles are auctioned, and buyers will buy them to get parts, fix up their cars, or pull the parts and sell them. So, in any case, Copart is the middleman and gets paid from both sides.

                                                                                                                          From its early days, the founder, Willis Johnson, had decided to own the land on which the salvage yards operate instead of leasing it. Given that real estate was the epicenter of the 2008/9 financial crisis, many businesses were cheap. Shree had been studying Copart and was impressed by the price. The market cap was about US$350 million. At that price, Shree would be paying for just the land in all the salvage yards that the company owns (about 140 yards around the country). He’d be getting the operations for free. That was the hypothesis Shree was working off. He did more research and then concluded that he wasn’t only paying for the land at that price.

                                                                                                                          After reaching that conclusion, Shree decided to move on. There were lots of other options. Over time as the economy improved and Copart’s earnings and cash flow improved, the stock price reflected that improvement. Shree was just on the sidelines, watching the stock go up. By 2020, the stock was up 10x from 2009.

                                                                                                                          Lessons learned

                                                                                                                          • The qualitative strengths of a company are not always readily apparent in the financials.
                                                                                                                          • Try understanding the strengths of the management teams of the companies you intend to invest in.
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s takeaways

                                                                                                                          • Get out and work in business. It will make you a better analyst and investor.
                                                                                                                          
                                                                                                                          

                                                                                                                          Actionable advice

                                                                                                                          Investing is an individual sport, and we each have to play to our strengths.

                                                                                                                          Shree’s recommendations

                                                                                                                          Shree recommends finding ways that help you get the vision, courage, and patience to invest.

                                                                                                                          No.1 goal for the next 12 months

                                                                                                                          Shree’s number one goal for the next 12 months is to find at least one new stock that can be a multi-bagger.

                                                                                                                          Parting words

                                                                                                                           

                                                                                                                          “Better late than never. I sincerely appreciate you, Andrew, for taking the time and having me on your wonderful podcast.”

                                                                                                                          Shreekkanth Viswanathan

                                                                                                                           

                                                                                                                          [spp-transcript]

                                                                                                                           

                                                                                                                          Connect with Shreekkanth Viswanathan

                                                                                                                          • LinkedIn
                                                                                                                          • Twitter
                                                                                                                          • Website
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s books

                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • My Worst Investment Ever
                                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s online programs

                                                                                                                          • Valuation Master Class
                                                                                                                          • The Become a Better Investor Community
                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • Finance Made Ridiculously Simple
                                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                          • Achieve Your Goals
                                                                                                                          
                                                                                                                          

                                                                                                                          Connect with Andrew Stotz:

                                                                                                                          • astotz.com
                                                                                                                          • LinkedIn
                                                                                                                          • Facebook
                                                                                                                          • Instagram
                                                                                                                          • Twitter
                                                                                                                          • YouTube
                                                                                                                          • My Worst Investment Ever Podcast
                                                                                                                          
                                                                                                                          

                                                                                                                          Further reading mentioned

                                                                                                                          • Peter Thiel (September 2014), Zero to One: Notes on Startups, or How to Build the Future
                                                                                                                          • Thomas William Phelps (August 2021), 100 to 1 in the Stock Market: A Distinguished Security Analyst Tells How to Make More of Your Investment Opportunities
                                                                                                                          
                                                                                                                          ]]>0d0a6466-6a43-498a-86f3-aa19eb3bdea7Mon, 03 Apr 2023 06:00:00 +070048:43falsefullShreekkanth (“Shree”) Viswanathan is the founder and portfolio manager of SVN Capital, a Chicago-based, concentrated, long-only, global equity-focused fund.Jeremy Kokemor – Tread Carefully When Investing in Metals and MiningBIO: Jeremy Kokemor founded Right Tail Capital: a concentrated, fundamental equity investment firm based in Richmond, Virginia.

                                                                                                                          STORY: Jeremy was an intern in an investment management firm where he got to cover small-cap metal miners. He was new to this industry and made several mistakes.

                                                                                                                          LEARNING: Figure out your investment style. Be careful of overconfidence and overestimation bias when looking at stocks to invest in. Be willing to change your mind when the circumstances call for it.

                                                                                                                           

                                                                                                                          “Figure out if there’s a certain type or style of investing that really appeals to you.”

                                                                                                                          Jeremy Kokemor

                                                                                                                           

                                                                                                                          Guest profile

                                                                                                                          Jeremy Kokemor founded Right Tail Capital: a concentrated, fundamental equity investment firm based in Richmond, Virginia. Jeremy loves helping people with their investments through owning high-quality, under-valued companies for the long term. Jeremy grew up in New Orleans, Louisiana, prior to attending the University of Virginia. After working in investment banking and investment management, Jeremy graduated from Harvard Business School. He then worked with several fantastic investors at global mutual fund company T. Rowe Price before managing concentrated portfolios at Private Advisors and Thompson, Siegel & Walmsley.

                                                                                                                          Worst investment ever

                                                                                                                          Jeremy had the great opportunity to work for T. Rowe Price after the financial crisis. He covered a portion of the technology sector for his internship and really enjoyed it. Later, when Jeremy was asked if there were any industries he did not want to cover, he said no because he liked learning about many different businesses. That’s how Jeremy found himself covering small-cap metals miners.

                                                                                                                          Jeremy was utterly new to this industry and often made mistakes investing in this industry. Some of the mistakes include investing in a small hometown Canadian company that announced they were making a significant acquisition of a copper project in Peru. The company had never done anything before in South America.

                                                                                                                          Another one was an investment in a gold mining company that, when they began production, their operating costs were just through the roof and dramatically higher than they had ever envisioned. Jeremy should have realized that the estimates they were publishing were based on the lowest degree of confidence of a feasibility study.

                                                                                                                          Lessons learned

                                                                                                                          • Don’t invest in metals and mining because it’s a more difficult industry to make money in, and not many companies survive for long.
                                                                                                                          • Know yourself and figure out where you’ve done an excellent job, where you’ve made mistakes, and where you’ve gotten lucky or unlucky.
                                                                                                                          • Figure out if a particular type or style of investing appeals to you as an individual.
                                                                                                                          • As public market investors, we always know less than we think we do.
                                                                                                                          • Have enough conviction to make the investment, but also hold that conviction loosely and recognize that many things could go wrong, and at times you might get duped.
                                                                                                                          • Be willing to change your mind when the circumstances call for it.
                                                                                                                          • You’ll learn much more from experience than from reading a textbook.
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s takeaways

                                                                                                                          • Sometimes in some sectors, it’s the Wild West, so facing failure is a huge possibility.
                                                                                                                          • There’s overconfidence bias and overestimation bias that we’re all subjected to, and certain sectors are more prone to that.
                                                                                                                          
                                                                                                                          

                                                                                                                          Actionable advice

                                                                                                                          If you’re a student, start building your investing acumen, even with just a little money. Make some of those mistakes and learn while at it. It’ll really pay great dividends over the long run.

                                                                                                                          Jeremy’s recommendations

                                                                                                                          Jeremy recommends reading a lot to improve your investment skills. Some of his favorite reads include You Can Be a Stock Market Genius: Uncover the Secret Hiding Places of Stock Market Profit and books by Warren Buffett and Charlie Munger.

                                                                                                                          No.1 goal for the next 12 months

                                                                                                                          Jeremy’s number one goal for the next 12 months is to continue to learn new businesses and industries and increase his investment performance.

                                                                                                                          Parting words

                                                                                                                           

                                                                                                                          “Keep learning and trying to get a little bit better.”

                                                                                                                          Jeremy Kokemor

                                                                                                                           

                                                                                                                          [spp-transcript]

                                                                                                                           

                                                                                                                          Connect with Jeremy Kokemor

                                                                                                                          • LinkedIn
                                                                                                                          • Twitter
                                                                                                                          • Website
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s books

                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • My Worst Investment Ever
                                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s online programs

                                                                                                                          • Valuation Master Class
                                                                                                                          • The Become a Better Investor Community
                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • Finance Made Ridiculously Simple
                                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                          • Achieve Your Goals
                                                                                                                          
                                                                                                                          

                                                                                                                          Connect with Andrew Stotz:

                                                                                                                          • astotz.com
                                                                                                                          • LinkedIn
                                                                                                                          • Facebook
                                                                                                                          • Instagram
                                                                                                                          • Twitter
                                                                                                                          • YouTube
                                                                                                                          • My Worst Investment Ever Podcast
                                                                                                                          
                                                                                                                          ]]>BIO: Jeremy Kokemor founded Right Tail Capital: a concentrated, fundamental equity investment firm based in Richmond, Virginia.

                                                                                                                          STORY: Jeremy was an intern in an investment management firm where he got to cover small-cap metal miners. He was new to this industry and made several mistakes.

                                                                                                                          LEARNING: Figure out your investment style. Be careful of overconfidence and overestimation bias when looking at stocks to invest in. Be willing to change your mind when the circumstances call for it.

                                                                                                                           

                                                                                                                          “Figure out if there’s a certain type or style of investing that really appeals to you.”

                                                                                                                          Jeremy Kokemor

                                                                                                                           

                                                                                                                          Guest profile

                                                                                                                          Jeremy Kokemor founded Right Tail Capital: a concentrated, fundamental equity investment firm based in Richmond, Virginia. Jeremy loves helping people with their investments through owning high-quality, under-valued companies for the long term. Jeremy grew up in New Orleans, Louisiana, prior to attending the University of Virginia. After working in investment banking and investment management, Jeremy graduated from Harvard Business School. He then worked with several fantastic investors at global mutual fund company T. Rowe Price before managing concentrated portfolios at Private Advisors and Thompson, Siegel & Walmsley.

                                                                                                                          Worst investment ever

                                                                                                                          Jeremy had the great opportunity to work for T. Rowe Price after the financial crisis. He covered a portion of the technology sector for his internship and really enjoyed it. Later, when Jeremy was asked if there were any industries he did not want to cover, he said no because he liked learning about many different businesses. That’s how Jeremy found himself covering small-cap metals miners.

                                                                                                                          Jeremy was utterly new to this industry and often made mistakes investing in this industry. Some of the mistakes include investing in a small hometown Canadian company that announced they were making a significant acquisition of a copper project in Peru. The company had never done anything before in South America.

                                                                                                                          Another one was an investment in a gold mining company that, when they began production, their operating costs were just through the roof and dramatically higher than they had ever envisioned. Jeremy should have realized that the estimates they were publishing were based on the lowest degree of confidence of a feasibility study.

                                                                                                                          Lessons learned

                                                                                                                          • Don’t invest in metals and mining because it’s a more difficult industry to make money in, and not many companies survive for long.
                                                                                                                          • Know yourself and figure out where you’ve done an excellent job, where you’ve made mistakes, and where you’ve gotten lucky or unlucky.
                                                                                                                          • Figure out if a particular type or style of investing appeals to you as an individual.
                                                                                                                          • As public market investors, we always know less than we think we do.
                                                                                                                          • Have enough conviction to make the investment, but also hold that conviction loosely and recognize that many things could go wrong, and at times you might get duped.
                                                                                                                          • Be willing to change your mind when the circumstances call for it.
                                                                                                                          • You’ll learn much more from experience than from reading a textbook.
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s takeaways

                                                                                                                          • Sometimes in some sectors, it’s the Wild West, so facing failure is a huge possibility.
                                                                                                                          • There’s overconfidence bias and overestimation bias that we’re all subjected to, and certain sectors are more prone to that.
                                                                                                                          
                                                                                                                          

                                                                                                                          Actionable advice

                                                                                                                          If you’re a student, start building your investing acumen, even with just a little money. Make some of those mistakes and learn while at it. It’ll really pay great dividends over the long run.

                                                                                                                          Jeremy’s recommendations

                                                                                                                          Jeremy recommends reading a lot to improve your investment skills. Some of his favorite reads include You Can Be a Stock Market Genius: Uncover the Secret Hiding Places of Stock Market Profit and books by Warren Buffett and Charlie Munger.

                                                                                                                          No.1 goal for the next 12 months

                                                                                                                          Jeremy’s number one goal for the next 12 months is to continue to learn new businesses and industries and increase his investment performance.

                                                                                                                          Parting words

                                                                                                                           

                                                                                                                          “Keep learning and trying to get a little bit better.”

                                                                                                                          Jeremy Kokemor

                                                                                                                           

                                                                                                                          [spp-transcript]

                                                                                                                           

                                                                                                                          Connect with Jeremy Kokemor

                                                                                                                          • LinkedIn
                                                                                                                          • Twitter
                                                                                                                          • Website
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s books

                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • My Worst Investment Ever
                                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s online programs

                                                                                                                          • Valuation Master Class
                                                                                                                          • The Become a Better Investor Community
                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • Finance Made Ridiculously Simple
                                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                          • Achieve Your Goals
                                                                                                                          
                                                                                                                          

                                                                                                                          Connect with Andrew Stotz:

                                                                                                                          • astotz.com
                                                                                                                          • LinkedIn
                                                                                                                          • Facebook
                                                                                                                          • Instagram
                                                                                                                          • Twitter
                                                                                                                          • YouTube
                                                                                                                          • My Worst Investment Ever Podcast
                                                                                                                          
                                                                                                                          ]]>d649947c-85fe-4f3f-bfd4-92cb92cbfb23Thu, 30 Mar 2023 06:00:00 +070036:48falsefullJeremy Kokemor founded Right Tail Capital: a concentrated, fundamental equity investment firm based in Richmond, Virginia.Paul Hodges – There’s No Substitute for JudgmentBIO: Paul Hodges is a trusted adviser to major companies and the investment community and has a proven track record of accurately identifying key trends in global marketplaces. He is chairman of New Normal Consulting and a Global Expert with the World Economic Forum.

                                                                                                                          STORY: Paul invested in a company in the cinema industry, which according to his research, was a well-performing business. After investing, his bank’s asset manager advised him to sell this stock. The stock grew 10-fold after that. Paul missed out on that windfall.

                                                                                                                          LEARNING: There’s no substitute for judgment. Distinguish between opinion and knowledge. Opinions are not knowledge.

                                                                                                                           

                                                                                                                          “Distinguish between opinion and knowledge. There’ll be many people who know more than you do, but they don’t actually know what they’re talking about.”

                                                                                                                          Paul Hodges

                                                                                                                           

                                                                                                                          Guest profile

                                                                                                                          Paul Hodges is a trusted adviser to major companies and the investment community and has a proven track record of accurately identifying key trends in global marketplaces. He is chairman of New Normal Consulting and a Global Expert with the World Economic Forum.

                                                                                                                          His consulting work focuses on the major paradigm shifts taking place in the global economy in Demand Patterns, Reshoring of Supply Chains, Renewable Energy, Circular Economy, Advanced Manufacturing, and Financial Markets. He is a regular speaker at international and industry conferences.

                                                                                                                          Worst investment ever

                                                                                                                          Paul was lucky enough to work for one of the UK’s biggest companies, where he had access to the best pension fund advisors. Paul went to one of those advisors and told them he had 20,000 pounds to invest. The advisor gave him a portfolio of eight businesses.

                                                                                                                          A couple of years later, Paul started seriously thinking about a company he had kept an eye on for a while. It was in the cinema industry. The company was paying a very high dividend of 10%. It had quite a lot of cash in the bank, but everybody hated it. However, Paul went to the cinema a lot. He figured many other people also went to the cinema, so it would be a good company to invest in. Paul invested some money into that stock and added it to his portfolio.

                                                                                                                          One day his bank wrote to him, saying they’d happily give him an expert review of his portfolio. They told him he had an excellent portfolio but advised him to sell the cinema company, which he did. The stock went up 10-fold after Paul sold his shares.

                                                                                                                          Lessons learned

                                                                                                                          • There’s no substitute for judgment.
                                                                                                                          • The key to success in anything is persistence.
                                                                                                                          • Distinguish between opinion and knowledge.
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s takeaways

                                                                                                                          • Everybody’s got an opinion, but not everybody has knowledge.
                                                                                                                          • Opinions are not knowledge.
                                                                                                                          
                                                                                                                          

                                                                                                                          Paul’s recommendations

                                                                                                                          Paul recommends reading a lot to continue learning.

                                                                                                                          No.1 goal for the next 12 months

                                                                                                                          Paul’s number one goal for the next 12 months is to focus on his family, especially his kids and grandkids.

                                                                                                                          Parting words

                                                                                                                           

                                                                                                                          “It was great being here!”

                                                                                                                          Paul Hodges

                                                                                                                           

                                                                                                                          [spp-transcript]

                                                                                                                           

                                                                                                                          Connect with Paul Hodges

                                                                                                                          • LinkedIn
                                                                                                                          • Twitter
                                                                                                                          • Website
                                                                                                                          • Podcast
                                                                                                                          • Book
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s books

                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • My Worst Investment Ever
                                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s online programs

                                                                                                                          • Valuation Master Class
                                                                                                                          • The Become a Better Investor Community
                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • Finance Made Ridiculously Simple
                                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                          • Achieve Your Goals
                                                                                                                          
                                                                                                                          

                                                                                                                          Connect with Andrew Stotz:

                                                                                                                          • astotz.com
                                                                                                                          • LinkedIn
                                                                                                                          • Facebook
                                                                                                                          • Instagram
                                                                                                                          • Twitter
                                                                                                                          • YouTube
                                                                                                                          • My Worst Investment Ever Podcast
                                                                                                                          
                                                                                                                          ]]>BIO: Paul Hodges is a trusted adviser to major companies and the investment community and has a proven track record of accurately identifying key trends in global marketplaces. He is chairman of New Normal Consulting and a Global Expert with the World Economic Forum.

                                                                                                                          STORY: Paul invested in a company in the cinema industry, which according to his research, was a well-performing business. After investing, his bank’s asset manager advised him to sell this stock. The stock grew 10-fold after that. Paul missed out on that windfall.

                                                                                                                          LEARNING: There’s no substitute for judgment. Distinguish between opinion and knowledge. Opinions are not knowledge.

                                                                                                                           

                                                                                                                          “Distinguish between opinion and knowledge. There’ll be many people who know more than you do, but they don’t actually know what they’re talking about.”

                                                                                                                          Paul Hodges

                                                                                                                           

                                                                                                                          Guest profile

                                                                                                                          Paul Hodges is a trusted adviser to major companies and the investment community and has a proven track record of accurately identifying key trends in global marketplaces. He is chairman of New Normal Consulting and a Global Expert with the World Economic Forum.

                                                                                                                          His consulting work focuses on the major paradigm shifts taking place in the global economy in Demand Patterns, Reshoring of Supply Chains, Renewable Energy, Circular Economy, Advanced Manufacturing, and Financial Markets. He is a regular speaker at international and industry conferences.

                                                                                                                          Worst investment ever

                                                                                                                          Paul was lucky enough to work for one of the UK’s biggest companies, where he had access to the best pension fund advisors. Paul went to one of those advisors and told them he had 20,000 pounds to invest. The advisor gave him a portfolio of eight businesses.

                                                                                                                          A couple of years later, Paul started seriously thinking about a company he had kept an eye on for a while. It was in the cinema industry. The company was paying a very high dividend of 10%. It had quite a lot of cash in the bank, but everybody hated it. However, Paul went to the cinema a lot. He figured many other people also went to the cinema, so it would be a good company to invest in. Paul invested some money into that stock and added it to his portfolio.

                                                                                                                          One day his bank wrote to him, saying they’d happily give him an expert review of his portfolio. They told him he had an excellent portfolio but advised him to sell the cinema company, which he did. The stock went up 10-fold after Paul sold his shares.

                                                                                                                          Lessons learned

                                                                                                                          • There’s no substitute for judgment.
                                                                                                                          • The key to success in anything is persistence.
                                                                                                                          • Distinguish between opinion and knowledge.
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s takeaways

                                                                                                                          • Everybody’s got an opinion, but not everybody has knowledge.
                                                                                                                          • Opinions are not knowledge.
                                                                                                                          
                                                                                                                          

                                                                                                                          Paul’s recommendations

                                                                                                                          Paul recommends reading a lot to continue learning.

                                                                                                                          No.1 goal for the next 12 months

                                                                                                                          Paul’s number one goal for the next 12 months is to focus on his family, especially his kids and grandkids.

                                                                                                                          Parting words

                                                                                                                           

                                                                                                                          “It was great being here!”

                                                                                                                          Paul Hodges

                                                                                                                           

                                                                                                                          [spp-transcript]

                                                                                                                           

                                                                                                                          Connect with Paul Hodges

                                                                                                                          • LinkedIn
                                                                                                                          • Twitter
                                                                                                                          • Website
                                                                                                                          • Podcast
                                                                                                                          • Book
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s books

                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • My Worst Investment Ever
                                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s online programs

                                                                                                                          • Valuation Master Class
                                                                                                                          • The Become a Better Investor Community
                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • Finance Made Ridiculously Simple
                                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                          • Achieve Your Goals
                                                                                                                          
                                                                                                                          

                                                                                                                          Connect with Andrew Stotz:

                                                                                                                          • astotz.com
                                                                                                                          • LinkedIn
                                                                                                                          • Facebook
                                                                                                                          • Instagram
                                                                                                                          • Twitter
                                                                                                                          • YouTube
                                                                                                                          • My Worst Investment Ever Podcast
                                                                                                                          
                                                                                                                          ]]>c85ba14e-5185-4334-a2cc-00b1d300795cWed, 29 Mar 2023 06:00:00 +070036:49falsefullPaul Hodges is a trusted adviser to major companies and the investment community and has a proven track record of accurately identifying key trends in global marketplaces. He is chairman of New Normal Consulting and a Global Expert with the World Economic Forum.Amy Minkley – What Is Your Enough?BIO: The founder of FI Freedom Retreats, Amy Minkley’s, life changed when she discovered the Financial Independence movement in 2019.

                                                                                                                          STORY: Amy was working in Bangkok, living an unhappy life of overworking and over-saving. This way of life gave her zero balance, and she was burning out. Ultimately, this led her to a new path that saw her quit her job in search of a more balanced life.

                                                                                                                          LEARNING: Be clear about your values and spend on that and not what others value. Separate creating wealth from growing wealth.

                                                                                                                           

                                                                                                                          “Knowing what your enough is allows you to grow the gap between your income and spending and then invest that gap.”

                                                                                                                          Amy Minkley

                                                                                                                           

                                                                                                                          Guest profile

                                                                                                                          The founder of FI Freedom Retreats, Amy Minkley’s, life changed when she discovered the Financial Independence movement in 2019. After working in Asia for 18 years, she was burned out. In a frantic bid to save her sanity and relationship, a late-night online search led her to the FIRE (Financial Independence, Retire Early) movement. Armed with the knowledge of hundreds of FIRE blogs and podcasts, Amy gained a new sense of hope, overcame the “one more year” syndrome, and quit her job in Bangkok. In 2021, she moved to Bali to live her dream life and share the message of Financial Independence and purposeful living. She is now happily engaged to her Australian beloved and organizing transformational FI retreats.

                                                                                                                          Worst investment ever

                                                                                                                          When Amy worked in Bangkok, she was unhappy and ran on an old pattern of overworking and over-saving. She was saving 90% of her income and investing it all. This cycle saw Amy tell herself she needed to work one more year and save more. So she continued overworking herself into the ground, leaving her with no work-life balance.

                                                                                                                          Then one day, Amy had this idea to have a conference in Asia. This led her to a new path that saw her quit her job in search of a more balanced life. Amy will host a FI Freedom Retreat in Bali, Indonesia, from September 27 to October 1.

                                                                                                                          Amy will be bringing in great speakers with a lot of expertise. She aims to have speakers offering attendees information and knowledge that will transform their lives.

                                                                                                                          Attendees will not only go on adventures in Bali, connect with the Balinese people, and immerse in the Balinese culture but also get the intrinsic value of community.

                                                                                                                          Lessons learned

                                                                                                                          • Be clear about your values and spend on that and not what other people value.
                                                                                                                          • Ask yourself what is your enough. Once you know what is enough to make you happy, you can grow the gap between what you’re earning and what you’re spending and then invest that gap.
                                                                                                                          • Even as you create, grow, and protect your wealth, make sure you also enjoy spending on what you value.
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s takeaways

                                                                                                                          • Separate creating wealth from growing wealth.
                                                                                                                          • Once you grow your wealth, ultimately, you have to protect it.
                                                                                                                          
                                                                                                                          

                                                                                                                          Amy’s recommendations

                                                                                                                          If you want to learn more about investing and financial investment, Amy recommends reading The Simple Path to Wealth: Your road map to financial independence and a rich, free life, listening to relevant podcasts such as the ChooseFI podcast, and attending in-person events near you.

                                                                                                                          No.1 goal for the next 12 months

                                                                                                                          Amy’s number one goal for the next 12 months is to create an incredible FI freedom event where she’ll bring together exceptional speakers and a great group of people. She hopes the event will allow attendees to talk, connect, and build relationships.

                                                                                                                          Parting words

                                                                                                                           

                                                                                                                          “Take the plunge in your life and really reflect on what you want. Then ask yourself if your money aligns with that. If yes, take a plunge with it.”

                                                                                                                          Amy Minkley

                                                                                                                           

                                                                                                                          [spp-transcript]

                                                                                                                           

                                                                                                                          Connect with Amy Minkley

                                                                                                                          • Instagram
                                                                                                                          • Website
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s books

                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • My Worst Investment Ever
                                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s online programs

                                                                                                                          • Valuation Master Class
                                                                                                                          • The Become a Better Investor Community
                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • Finance Made Ridiculously Simple
                                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                          • Achieve Your Goals
                                                                                                                          
                                                                                                                          

                                                                                                                          Connect with Andrew Stotz:

                                                                                                                          • astotz.com
                                                                                                                          • LinkedIn
                                                                                                                          • Facebook
                                                                                                                          • Instagram
                                                                                                                          • Twitter
                                                                                                                          • YouTube
                                                                                                                          • My Worst Investment Ever Podcast
                                                                                                                          
                                                                                                                          ]]>BIO: The founder of FI Freedom Retreats, Amy Minkley’s, life changed when she discovered the Financial Independence movement in 2019.

                                                                                                                          STORY: Amy was working in Bangkok, living an unhappy life of overworking and over-saving. This way of life gave her zero balance, and she was burning out. Ultimately, this led her to a new path that saw her quit her job in search of a more balanced life.

                                                                                                                          LEARNING: Be clear about your values and spend on that and not what others value. Separate creating wealth from growing wealth.

                                                                                                                           

                                                                                                                          “Knowing what your enough is allows you to grow the gap between your income and spending and then invest that gap.”

                                                                                                                          Amy Minkley

                                                                                                                           

                                                                                                                          Guest profile

                                                                                                                          The founder of FI Freedom Retreats, Amy Minkley’s, life changed when she discovered the Financial Independence movement in 2019. After working in Asia for 18 years, she was burned out. In a frantic bid to save her sanity and relationship, a late-night online search led her to the FIRE (Financial Independence, Retire Early) movement. Armed with the knowledge of hundreds of FIRE blogs and podcasts, Amy gained a new sense of hope, overcame the “one more year” syndrome, and quit her job in Bangkok. In 2021, she moved to Bali to live her dream life and share the message of Financial Independence and purposeful living. She is now happily engaged to her Australian beloved and organizing transformational FI retreats.

                                                                                                                          Worst investment ever

                                                                                                                          When Amy worked in Bangkok, she was unhappy and ran on an old pattern of overworking and over-saving. She was saving 90% of her income and investing it all. This cycle saw Amy tell herself she needed to work one more year and save more. So she continued overworking herself into the ground, leaving her with no work-life balance.

                                                                                                                          Then one day, Amy had this idea to have a conference in Asia. This led her to a new path that saw her quit her job in search of a more balanced life. Amy will host a FI Freedom Retreat in Bali, Indonesia, from September 27 to October 1.

                                                                                                                          Amy will be bringing in great speakers with a lot of expertise. She aims to have speakers offering attendees information and knowledge that will transform their lives.

                                                                                                                          Attendees will not only go on adventures in Bali, connect with the Balinese people, and immerse in the Balinese culture but also get the intrinsic value of community.

                                                                                                                          Lessons learned

                                                                                                                          • Be clear about your values and spend on that and not what other people value.
                                                                                                                          • Ask yourself what is your enough. Once you know what is enough to make you happy, you can grow the gap between what you’re earning and what you’re spending and then invest that gap.
                                                                                                                          • Even as you create, grow, and protect your wealth, make sure you also enjoy spending on what you value.
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s takeaways

                                                                                                                          • Separate creating wealth from growing wealth.
                                                                                                                          • Once you grow your wealth, ultimately, you have to protect it.
                                                                                                                          
                                                                                                                          

                                                                                                                          Amy’s recommendations

                                                                                                                          If you want to learn more about investing and financial investment, Amy recommends reading The Simple Path to Wealth: Your road map to financial independence and a rich, free life, listening to relevant podcasts such as the ChooseFI podcast, and attending in-person events near you.

                                                                                                                          No.1 goal for the next 12 months

                                                                                                                          Amy’s number one goal for the next 12 months is to create an incredible FI freedom event where she’ll bring together exceptional speakers and a great group of people. She hopes the event will allow attendees to talk, connect, and build relationships.

                                                                                                                          Parting words

                                                                                                                           

                                                                                                                          “Take the plunge in your life and really reflect on what you want. Then ask yourself if your money aligns with that. If yes, take a plunge with it.”

                                                                                                                          Amy Minkley

                                                                                                                           

                                                                                                                          [spp-transcript]

                                                                                                                           

                                                                                                                          Connect with Amy Minkley

                                                                                                                          • Instagram
                                                                                                                          • Website
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s books

                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • My Worst Investment Ever
                                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s online programs

                                                                                                                          • Valuation Master Class
                                                                                                                          • The Become a Better Investor Community
                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • Finance Made Ridiculously Simple
                                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                          • Achieve Your Goals
                                                                                                                          
                                                                                                                          

                                                                                                                          Connect with Andrew Stotz:

                                                                                                                          • astotz.com
                                                                                                                          • LinkedIn
                                                                                                                          • Facebook
                                                                                                                          • Instagram
                                                                                                                          • Twitter
                                                                                                                          • YouTube
                                                                                                                          • My Worst Investment Ever Podcast
                                                                                                                          
                                                                                                                          ]]>be30d52c-f415-4e14-bc03-339dfa7b6740Mon, 27 Mar 2023 06:00:00 +070031:21falsefullThe founder of FI Freedom Retreats, Amy Minkley’s, life changed when she discovered the Financial Independence movement in 2019.Benjamin Claremon – Know What Kind of Investor You AreBIO: Ben Claremon joined Cove Street in 2011 and has been a Co-Portfolio Manager for the Classic Value | Small Cap PLUS strategy since its inception in 2016.

                                                                                                                          STORY: Benjamin has made the biggest mistakes and lost the most money by buying cheap companies that get less valuable over time.

                                                                                                                          LEARNING: Know what kind of investor you are and let your portfolio reflects that. Just because it’s cheap doesn’t mean you have to buy it. Invest in a business you can own for years.

                                                                                                                           

                                                                                                                          “It’s hard to establish a true margin of safety when the intrinsic value is falling over time. It’s like catching a falling knife.”

                                                                                                                          Benjamin Claremon

                                                                                                                           

                                                                                                                          Guest profile

                                                                                                                          Ben Claremon joined Cove Street in 2011 and has been a Co-Portfolio Manager for the Classic Value | Small Cap PLUS strategy since its inception in 2016. His background includes positions on the long and short side of hedge funds as well as commercial real estate finance and management. Ben is the proprietor of the value investing blog The Inoculated Investor, the founder of the 10-K Club of Southern California, and the host of the podcast Compounders: The Anatomy of a Mutlibagger.

                                                                                                                          Worst investment ever

                                                                                                                          The place where Benjamin has made the biggest mistakes and lost the most money is with companies that get less valuable over time. These are businesses facing secular headwinds or outright secular decline. Every day, the businesses become worth a little bit less. They seem lucrative to buy when they’re cheap and sell when the valuation goes from highly depressed to merely depressed. However, businesses that don’t get more valuable, over time, tend to throw curveballs at you that you might not be expecting. Whether it’s a balance sheet issue, a capital allocation issue, or a management change, trouble just breeds more trouble.

                                                                                                                          There was such a company that Benjamin was relatively public on. When investing in this company, Benjamin thought there was a distinctive margin of safety. He believed the management team understood how to create value for shareholders. The company had valuable assets that could be sold at higher prices in the current valuation. And that capital allocation changes could have increased the company’s value relative to the current stock price.

                                                                                                                          For this reason, Benjamin thought that the business connectivity and the business services sides were worth a certain fair amount more than the stock was trading for. He was looking at a situation where the value was much higher if they could just unlock it via divestitures. Amazingly, that’s precisely what the management did. They sold three businesses, all of which were at multiples higher than the stock price. But, to date, the stock is still down.

                                                                                                                          Lessons learned

                                                                                                                          • Before you invest in a company, ask yourself, does this business look like it is getting more valuable over time and has a chance to compound? If the answer is no, don’t waste your time on it.
                                                                                                                          • Know what kind of investor you are, what fits your temperament, and what allows you to sleep well at night. Then let your portfolio reflects that.
                                                                                                                          • You’re better off investing in a business you can own for years instead of one meant to be sold.
                                                                                                                          • When investing, consider the moat trajectory and determine if the company is stable, expanding, or contracting. If it’s contracting, don’t assume that a cheap valuation will protect you from what will happen over the next couple of years.
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s takeaways

                                                                                                                          • Grow and learn from mistakes, and don’t let them scar you.
                                                                                                                          • Companies go through upcycles and downcycles all the time. Understand which cycle you want to invest in, then find your investing style.
                                                                                                                          • Whether it’s in your personal, investing, or business life, remember the impact of taxes can be enormous.
                                                                                                                          • Just because it’s cheap doesn’t mean you have to buy it.
                                                                                                                          • During a mergers and acquisition deal, buy the company being acquired, don’t buy the acquirer.
                                                                                                                          
                                                                                                                          

                                                                                                                          No.1 goal for the next 12 months

                                                                                                                          Benjamin’s number one goal for the next 12 months is to be a better investor than he is today. So everything he does on the investment side is focused on being consistent, repeatable, thoughtful, reflective when he’s wrong, and willing to learn from others.

                                                                                                                          Parting words

                                                                                                                           

                                                                                                                          “The cool thing about this industry is that people share so much of what’s made them successful. You can just pick, choose and steal very liberally, and create your own frame and understand what kind of investor you are.”

                                                                                                                          Benjamin Claremon

                                                                                                                           

                                                                                                                          [spp-transcript]

                                                                                                                           

                                                                                                                          Connect with Benjamin Claremon

                                                                                                                          • LinkedIn
                                                                                                                          • Twitter
                                                                                                                          • Website
                                                                                                                          • Blog
                                                                                                                          • Podcast
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s books

                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • My Worst Investment Ever
                                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s online programs

                                                                                                                          • Valuation Master Class
                                                                                                                          • The Become a Better Investor Community
                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • Finance Made Ridiculously Simple
                                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                          • Achieve Your Goals
                                                                                                                          
                                                                                                                          

                                                                                                                          Connect with Andrew Stotz:

                                                                                                                          • astotz.com
                                                                                                                          • LinkedIn
                                                                                                                          • Facebook
                                                                                                                          • Instagram
                                                                                                                          • Twitter
                                                                                                                          • YouTube
                                                                                                                          • My Worst Investment Ever Podcast
                                                                                                                          
                                                                                                                          ]]>BIO: Ben Claremon joined Cove Street in 2011 and has been a Co-Portfolio Manager for the Classic Value | Small Cap PLUS strategy since its inception in 2016.

                                                                                                                          STORY: Benjamin has made the biggest mistakes and lost the most money by buying cheap companies that get less valuable over time.

                                                                                                                          LEARNING: Know what kind of investor you are and let your portfolio reflects that. Just because it’s cheap doesn’t mean you have to buy it. Invest in a business you can own for years.

                                                                                                                           

                                                                                                                          “It’s hard to establish a true margin of safety when the intrinsic value is falling over time. It’s like catching a falling knife.”

                                                                                                                          Benjamin Claremon

                                                                                                                           

                                                                                                                          Guest profile

                                                                                                                          Ben Claremon joined Cove Street in 2011 and has been a Co-Portfolio Manager for the Classic Value | Small Cap PLUS strategy since its inception in 2016. His background includes positions on the long and short side of hedge funds as well as commercial real estate finance and management. Ben is the proprietor of the value investing blog The Inoculated Investor, the founder of the 10-K Club of Southern California, and the host of the podcast Compounders: The Anatomy of a Mutlibagger.

                                                                                                                          Worst investment ever

                                                                                                                          The place where Benjamin has made the biggest mistakes and lost the most money is with companies that get less valuable over time. These are businesses facing secular headwinds or outright secular decline. Every day, the businesses become worth a little bit less. They seem lucrative to buy when they’re cheap and sell when the valuation goes from highly depressed to merely depressed. However, businesses that don’t get more valuable, over time, tend to throw curveballs at you that you might not be expecting. Whether it’s a balance sheet issue, a capital allocation issue, or a management change, trouble just breeds more trouble.

                                                                                                                          There was such a company that Benjamin was relatively public on. When investing in this company, Benjamin thought there was a distinctive margin of safety. He believed the management team understood how to create value for shareholders. The company had valuable assets that could be sold at higher prices in the current valuation. And that capital allocation changes could have increased the company’s value relative to the current stock price.

                                                                                                                          For this reason, Benjamin thought that the business connectivity and the business services sides were worth a certain fair amount more than the stock was trading for. He was looking at a situation where the value was much higher if they could just unlock it via divestitures. Amazingly, that’s precisely what the management did. They sold three businesses, all of which were at multiples higher than the stock price. But, to date, the stock is still down.

                                                                                                                          Lessons learned

                                                                                                                          • Before you invest in a company, ask yourself, does this business look like it is getting more valuable over time and has a chance to compound? If the answer is no, don’t waste your time on it.
                                                                                                                          • Know what kind of investor you are, what fits your temperament, and what allows you to sleep well at night. Then let your portfolio reflects that.
                                                                                                                          • You’re better off investing in a business you can own for years instead of one meant to be sold.
                                                                                                                          • When investing, consider the moat trajectory and determine if the company is stable, expanding, or contracting. If it’s contracting, don’t assume that a cheap valuation will protect you from what will happen over the next couple of years.
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s takeaways

                                                                                                                          • Grow and learn from mistakes, and don’t let them scar you.
                                                                                                                          • Companies go through upcycles and downcycles all the time. Understand which cycle you want to invest in, then find your investing style.
                                                                                                                          • Whether it’s in your personal, investing, or business life, remember the impact of taxes can be enormous.
                                                                                                                          • Just because it’s cheap doesn’t mean you have to buy it.
                                                                                                                          • During a mergers and acquisition deal, buy the company being acquired, don’t buy the acquirer.
                                                                                                                          
                                                                                                                          

                                                                                                                          No.1 goal for the next 12 months

                                                                                                                          Benjamin’s number one goal for the next 12 months is to be a better investor than he is today. So everything he does on the investment side is focused on being consistent, repeatable, thoughtful, reflective when he’s wrong, and willing to learn from others.

                                                                                                                          Parting words

                                                                                                                           

                                                                                                                          “The cool thing about this industry is that people share so much of what’s made them successful. You can just pick, choose and steal very liberally, and create your own frame and understand what kind of investor you are.”

                                                                                                                          Benjamin Claremon

                                                                                                                           

                                                                                                                          [spp-transcript]

                                                                                                                           

                                                                                                                          Connect with Benjamin Claremon

                                                                                                                          • LinkedIn
                                                                                                                          • Twitter
                                                                                                                          • Website
                                                                                                                          • Blog
                                                                                                                          • Podcast
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s books

                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • My Worst Investment Ever
                                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s online programs

                                                                                                                          • Valuation Master Class
                                                                                                                          • The Become a Better Investor Community
                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • Finance Made Ridiculously Simple
                                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                          • Achieve Your Goals
                                                                                                                          
                                                                                                                          

                                                                                                                          Connect with Andrew Stotz:

                                                                                                                          • astotz.com
                                                                                                                          • LinkedIn
                                                                                                                          • Facebook
                                                                                                                          • Instagram
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                                                                                                                          ]]>1ca03aed-835d-4b80-bed6-1bc4ec842793Thu, 23 Mar 2023 06:00:00 +070030:58falsefullBen Claremon joined Cove Street in 2011 and has been a Co-Portfolio Manager for the Classic Value | Small Cap PLUS strategy since its inception in 2016.Edward McQuarrie – Never Ever Sell Naked CallsBIO: Edward McQuarrie is Professor Emeritus at Santa Clara University. He writes on market history and personal finance, and his research has been mentioned in columns in the Wall Street Journal, Marketwatch, and Barron’s.

                                                                                                                          STORY: Edward opened an account to trade naked puts. When the financial crisis of 2008 hit, he thought it was a good time to sell his puts. He ended up losing almost all the money in his account.

                                                                                                                          LEARNING: Keep your play money small. Never trade your treasury bond until maturity to avoid losses.

                                                                                                                           

                                                                                                                          “I find intermediate treasuries to be superior to total bonds, especially for new investors.”

                                                                                                                          Edward McQuarrie

                                                                                                                           

                                                                                                                          Guest profile

                                                                                                                          Edward McQuarrie is Professor Emeritus at Santa Clara University. He writes on market history and personal finance, and his research has been mentioned in columns in the Wall Street Journal, Marketwatch, and Barron’s. His papers can be downloaded from SSRN.com, and he posts as McQ at Bogleheads.org, where you can view some of the charts mentioned today.

                                                                                                                          Worst investment ever

                                                                                                                          Years ago, Edward gave himself a small play account to keep his hands off the money in his 401(k) account. In that play account, which he opened with a broker, Edward began to trade options, and more particularly, he began to sell naked puts.

                                                                                                                          Then the great financial crisis of 2008 hit. Edward had been trading puts and calls for four or five years at that point. By November 2008, the Lehman Brothers had already gone bust, and the markets were going down, so Edward thought this was an excellent time to sell a naked put.

                                                                                                                          At that point, Edward had $21,000 in his play account, and his maintenance requirement was only $11,000. A day later, he logged into his account and found a balance of $11,000 and a $21,000 maintenance requirement. This meant Edward was $10,000 short. His best option was to take the loss and reduce the maintenance requirement. So after 30 minutes of frenzy to position covering, Edward still got a margin of about $2,000, which he had to cover with money outside the play account.

                                                                                                                          Lessons learned

                                                                                                                          • Keep your play money small.
                                                                                                                          • Always have a lifeline in case you totally screw it up.
                                                                                                                          • Nobody holding a US Treasury to maturity loses their money nominally. It’s when you trade them before maturity that you can lose significantly.
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s takeaways

                                                                                                                          • Always have a backup plan to survive.
                                                                                                                          • Get into a short-duration bond when you think that bond prices will fall. On the other hand, invest in a long-duration bond if you think that prices will rise.
                                                                                                                          
                                                                                                                          

                                                                                                                          No.1 goal for the next 12 months

                                                                                                                          Edward’s number one goal for the next 12 months is to write as much good stuff as he can pump out the door.

                                                                                                                          Parting words

                                                                                                                           

                                                                                                                          “Own the total stock market, just like Andrew said.”

                                                                                                                          Edward McQuarrie

                                                                                                                           

                                                                                                                          [spp-transcript]

                                                                                                                           

                                                                                                                          Connect with Edward McQuarrie

                                                                                                                          • LinkedIn
                                                                                                                          • Website
                                                                                                                          • Books
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s books

                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • My Worst Investment Ever
                                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s online programs

                                                                                                                          • Valuation Master Class
                                                                                                                          • The Become a Better Investor Community
                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • Finance Made Ridiculously Simple
                                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                          • Achieve Your Goals
                                                                                                                          
                                                                                                                          

                                                                                                                          Connect with Andrew Stotz:

                                                                                                                          • astotz.com
                                                                                                                          • LinkedIn
                                                                                                                          • Facebook
                                                                                                                          • Instagram
                                                                                                                          • Twitter
                                                                                                                          • YouTube
                                                                                                                          • My Worst Investment Ever Podcast
                                                                                                                          
                                                                                                                          ]]>BIO: Edward McQuarrie is Professor Emeritus at Santa Clara University. He writes on market history and personal finance, and his research has been mentioned in columns in the Wall Street Journal, Marketwatch, and Barron’s.

                                                                                                                          STORY: Edward opened an account to trade naked puts. When the financial crisis of 2008 hit, he thought it was a good time to sell his puts. He ended up losing almost all the money in his account.

                                                                                                                          LEARNING: Keep your play money small. Never trade your treasury bond until maturity to avoid losses.

                                                                                                                           

                                                                                                                          “I find intermediate treasuries to be superior to total bonds, especially for new investors.”

                                                                                                                          Edward McQuarrie

                                                                                                                           

                                                                                                                          Guest profile

                                                                                                                          Edward McQuarrie is Professor Emeritus at Santa Clara University. He writes on market history and personal finance, and his research has been mentioned in columns in the Wall Street Journal, Marketwatch, and Barron’s. His papers can be downloaded from SSRN.com, and he posts as McQ at Bogleheads.org, where you can view some of the charts mentioned today.

                                                                                                                          Worst investment ever

                                                                                                                          Years ago, Edward gave himself a small play account to keep his hands off the money in his 401(k) account. In that play account, which he opened with a broker, Edward began to trade options, and more particularly, he began to sell naked puts.

                                                                                                                          Then the great financial crisis of 2008 hit. Edward had been trading puts and calls for four or five years at that point. By November 2008, the Lehman Brothers had already gone bust, and the markets were going down, so Edward thought this was an excellent time to sell a naked put.

                                                                                                                          At that point, Edward had $21,000 in his play account, and his maintenance requirement was only $11,000. A day later, he logged into his account and found a balance of $11,000 and a $21,000 maintenance requirement. This meant Edward was $10,000 short. His best option was to take the loss and reduce the maintenance requirement. So after 30 minutes of frenzy to position covering, Edward still got a margin of about $2,000, which he had to cover with money outside the play account.

                                                                                                                          Lessons learned

                                                                                                                          • Keep your play money small.
                                                                                                                          • Always have a lifeline in case you totally screw it up.
                                                                                                                          • Nobody holding a US Treasury to maturity loses their money nominally. It’s when you trade them before maturity that you can lose significantly.
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s takeaways

                                                                                                                          • Always have a backup plan to survive.
                                                                                                                          • Get into a short-duration bond when you think that bond prices will fall. On the other hand, invest in a long-duration bond if you think that prices will rise.
                                                                                                                          
                                                                                                                          

                                                                                                                          No.1 goal for the next 12 months

                                                                                                                          Edward’s number one goal for the next 12 months is to write as much good stuff as he can pump out the door.

                                                                                                                          Parting words

                                                                                                                           

                                                                                                                          “Own the total stock market, just like Andrew said.”

                                                                                                                          Edward McQuarrie

                                                                                                                           

                                                                                                                          [spp-transcript]

                                                                                                                           

                                                                                                                          Connect with Edward McQuarrie

                                                                                                                          • LinkedIn
                                                                                                                          • Website
                                                                                                                          • Books
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s books

                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • My Worst Investment Ever
                                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s online programs

                                                                                                                          • Valuation Master Class
                                                                                                                          • The Become a Better Investor Community
                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • Finance Made Ridiculously Simple
                                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                                          • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                          • Achieve Your Goals
                                                                                                                          
                                                                                                                          

                                                                                                                          Connect with Andrew Stotz:

                                                                                                                          • astotz.com
                                                                                                                          • LinkedIn
                                                                                                                          • Facebook
                                                                                                                          • Instagram
                                                                                                                          • Twitter
                                                                                                                          • YouTube
                                                                                                                          • My Worst Investment Ever Podcast
                                                                                                                          
                                                                                                                          ]]>a18055f6-a3f5-4ff7-9e42-f58bd5cb8ed3Wed, 22 Mar 2023 06:00:00 +070037:33falsefullEdward McQuarrie is Professor Emeritus at Santa Clara University. He writes on market history and personal finance, and his research has been mentioned in columns in the Wall Street Journal, Marketwatch, and Barron’s.ISMS 12: CPI Racing Across the GlobeIs global CPI going to follow the US CPI slowdown?

                                                                                                                          Global Markets

                                                                                                                          Global CPI has leveled off and is slowing in DMs, but still rising in EMs

                                                                                                                          • Economies across the world have GDP of about US$90trn and an average CPI rate of 7.4%
                                                                                                                          • The developed world has GDP of US$52trn and CPI of 6.9%
                                                                                                                          • And the emerging world has GDP of US$38trn and a higher 8.2% CPI rate
                                                                                                                          
                                                                                                                          

                                                                                                                          World Jan. 2023 CPI was 7.4%, up 2.1ppts YoY; MoM DM continues to fall, while EM is rising

                                                                                                                          • DM Jan. 2023 CPI was 6.9%, up 1.5ppts YoY, but falling slightly MoM
                                                                                                                          • EM Jan. 2023 CPI was 8.2%, up 2.9ppts YoY, and is rising MoM
                                                                                                                          
                                                                                                                          

                                                                                                                          Key points

                                                                                                                          • Global CPI was 7.4% in January, up 2.1ppts YoY, but it was flat MoM
                                                                                                                          • Developed world CPI was 6.9%, up 1.5ppts YoY, but falling slightly MoM
                                                                                                                          • Emerging world CPI in January at 8.2%, up 2.9ppts YoY, and it rose MoM
                                                                                                                          
                                                                                                                          

                                                                                                                          Developed Markets Regions

                                                                                                                          CPI is contained in DM Americas, peaking in DM Europe, and rising in DM Asia

                                                                                                                          • With in the Developed Markets, DM Americas is the largest with US$25trn of GDP and 6.3% CPI
                                                                                                                          • Developed Europe has US$15trn of GDP and a higher 8.3% CPI
                                                                                                                          • Developed Pacific is smaller at US$8trn and has the lowest CPI of the developed regions at 5.1%
                                                                                                                          
                                                                                                                          

                                                                                                                          DM Americas CPI falling, DM Europe peaking, DM Asia rising

                                                                                                                          • 12 months ago, DM Americas had a 7.4% CPI which is now down to 6.3%, a 1.1ppts fall
                                                                                                                          • This means that CPI went from 2.1ppts above the global average to 1.1ppts below
                                                                                                                          • DM Europe rose from 4.4% 12 months ago to 8.3%, up 3.8ppts
                                                                                                                          • This means it went from 0.9ppts below to 0.8ppts above the global average
                                                                                                                          • CPI is racing up in DM Pacific from 1.5% 12 months ago to the current 5.1%, that’s a 3.6ppts increase
                                                                                                                          • It has gone from 3.8ppts lower than World CPI to 2.4ppts lower
                                                                                                                          
                                                                                                                          

                                                                                                                          Key points

                                                                                                                          • DM Americas 6.3% January CPI is down from 7.4% 12 months ago; and has now shifted from being 2.1ppts above the global average to 1.1ppts below
                                                                                                                          • CPI nearly doubled in DM Europe over the past 12 months from 4.4% to 8.3%, shifting from about 1ppts below to 1ppts above the global average
                                                                                                                          • CPI in the must smaller DM Pacific region raced up from 1.5% 12 months ago to the current 5.1%; despite that massive 3.6ppts increase, it remains about 2.4ppts lower than the global average
                                                                                                                          
                                                                                                                          

                                                                                                                          Emerging Markets

                                                                                                                          EM CPI rising in Asia, Middle East and Africa, and Frontier markets on fire

                                                                                                                          • EM Americas had a small GDP of US$3.8trn and CPI of 7.9%
                                                                                                                          • EM Asia had a massive GDP of US$25.7trn and 3.2% CPI
                                                                                                                          • EM Europe had US$3.9trn GDP and a massive 23% CPI
                                                                                                                          • EM Middle East and Africa had a small US$1.7trn GDP and a high 10.2% CPI
                                                                                                                          • Finally, Frontier markets had US$2.9trn GDP and 30% CPI
                                                                                                                          
                                                                                                                          

                                                                                                                          EM CPI rising in Asia, Middle East and Africa, and Frontier markets on fire

                                                                                                                          • EM Americas CPI was 7.9% in January, down slightly from 8.5% 12 months ago
                                                                                                                          • EM Asia CPI went from a tiny 1.9% 12 months ago to 3.2% and is still 4.3ppts below the World CPI
                                                                                                                          • Most notably, this has ticked up slightly MoM
                                                                                                                          • EM Europe CPI was 23% and over the past two months has been falling; though it is still 15.5ppts above the World average
                                                                                                                          • EM ME&A CPI was 10.2% compared to 3.7% 12 months ago. It has now risen to be 2.8ppts above the world average compared to 1.7ppts below 12 months ago
                                                                                                                          • Consumer prices are on fire in Frontier markets up 30% YoY in January; this is double where they were 12 months ago; CPI keeps rising MoM and is now 22.5ppts above the world average
                                                                                                                          
                                                                                                                          

                                                                                                                          Key points

                                                                                                                          • EM Americas CPI was 7.9% in January, down slightly from 8.5% 12 months ago
                                                                                                                          • EM Asia CPI went from a tiny 1.9% 12 months ago to 3.2% and is still 4.3ppts below the World CPI. Most notably, this has ticked up slightly MoM
                                                                                                                          • EM Europe CPI was 23% and over the past two months has been falling; though it is still 15.5ppts above the World average
                                                                                                                          • EM ME&A CPI was 10.2% compared to 3.7% 12 months ago. It has now risen to be 2.8ppts above the world average compared to 1.7ppts below 12 months ago
                                                                                                                          • Consumer prices are on fire in Frontier markets up 30% YoY in January; this is double where they were 12 months ago; CPI keeps rising MoM and is now 22.5ppts above the world average
                                                                                                                          
                                                                                                                          

                                                                                                                          Developed Markets

                                                                                                                          CPI is flattening in major developed markets, led by US CPI fall

                                                                                                                          • Top five DM countries
                                                                                                                          
                                                                                                                          

                                                                                                                          Only US CPI is falling YoY; UK has started falling MoM; Germany, Japan, and France are rising

                                                                                                                          • USA CPI was 6.4% in January, down from 7.6% a year ago; it has gone from 2.2ppts above the global average to -1.1ppts below
                                                                                                                          • February just came out for US CPI at 6.0%. Unfortunately, February numbers are not out for all the other countries, so we focus now on January
                                                                                                                          • Japan's CPI went racing up from 0.5% 12 months ago to 4.4% in January; though it remains at a deep discount to the global average, it appears to be closing that gap
                                                                                                                          • Germany's CPI doubled from 4% 12 months ago, which was 1.4ppts below the worldwide average, to 8.8% now, 1.3ppts above the global average
                                                                                                                          • UK CPI started 12 months ago relatively high at 5.4% and is now has doubled to 10.2%; though it has fallen slightly MoM
                                                                                                                          • France's CPI was a low 3% a year ago and has doubled to 6.1%, which is still 1.3ppts below the global average
                                                                                                                          
                                                                                                                          

                                                                                                                          Key points

                                                                                                                          • USA CPI fell to 6.4% in January and 6.0% in February, going from 2.2ppts above the global average to 1.1ppts below
                                                                                                                          • Japan's CPI increased by 8x from 0.5% 12 months ago to 4.4% in January
                                                                                                                          • Germany's CPI doubled to 8.8%, going from 1.4ppts below the worldwide average to 1.3ppts above
                                                                                                                          • UK CPI doubled to 10.2%; though it has fallen slightly MoM
                                                                                                                          • France's CPI doubled to 6.1%, which is still 1.3ppts below the global average
                                                                                                                          
                                                                                                                          

                                                                                                                          Emerging Markets

                                                                                                                          CPI uptick in EM Asia giants, China and India, could keep EM CPI rising

                                                                                                                          • Emerging world
                                                                                                                          
                                                                                                                          

                                                                                                                          CPI is rising YoY in China, India, Korea, and Russia; falling only in Brazil

                                                                                                                          • China's CPI at 2% is low but rising; 12 months ago, it was at 0.8%, and it has been slow to rise, partially because of the covid lockdown; it is 5.4ppts below the global average and could rise substantially
                                                                                                                          • India's 6.5% CPI was almost flat compared to 12 months ago, hovering at about the global average
                                                                                                                          • Korea CPI at 5.2% has been steady at about 2ppts below the global average and is up 1.7ppts from 3.5% 12 months ago
                                                                                                                          • Russia's CPI was 11.8% in January and has been on a steady decline from its 18% peak in April 2022 near the start of the war; though it is still 4.3ppts above the global average
                                                                                                                          • 12 months ago, Brazil was struggling with about 10% CPI, but previous aggressive rate hikes have cut CPI in almost half to 5.8%, taking it from 4.9ppts above the global average to 1.7ppts below
                                                                                                                          
                                                                                                                          

                                                                                                                          Key points

                                                                                                                          • China's 2% CPI is 5.4ppts below the global average and could rise substantially
                                                                                                                          • India's 6.5% CPI has been steady at about the global average, low risk of shock
                                                                                                                          • Korea CPI 5.2% was up 1.7ppts but has been steady at about 2ppts below the global average
                                                                                                                          • Russia's CPI has been on a steady decline from its April 2022 18% peak to 11.8%
                                                                                                                          • Over the past 12 months, Brazil cut its CPI in half to January's 5.8%, moving it from 4.9ppts above the global average to 1.7ppts below
                                                                                                                          
                                                                                                                          

                                                                                                                           

                                                                                                                          Click here to get the PDF with all charts and graphs

                                                                                                                           

                                                                                                                          Andrew’s books

                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • My Worst Investment Ever
                                                                                                                          • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                          • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                          
                                                                                                                          

                                                                                                                          Andrew’s online programs

                                                                                                                          • Valuation Master Class
                                                                                                                          • The Become a Better Investor Community
                                                                                                                          • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                          • Finance Made Ridiculously Simple
                                                                                                                          • FVMR Investing: Quantamental Investing Across the World
                                                                                                                          • Become a Great Presenter and Increase Your Influence
                                                                                                                          • Is global CPI going to follow the US CPI slowdown?

                                                                                                                            Global Markets

                                                                                                                            Global CPI has leveled off and is slowing in DMs, but still rising in EMs

                                                                                                                            • Economies across the world have GDP of about US$90trn and an average CPI rate of 7.4%
                                                                                                                            • The developed world has GDP of US$52trn and CPI of 6.9%
                                                                                                                            • And the emerging world has GDP of US$38trn and a higher 8.2% CPI rate
                                                                                                                            
                                                                                                                            

                                                                                                                            World Jan. 2023 CPI was 7.4%, up 2.1ppts YoY; MoM DM continues to fall, while EM is rising

                                                                                                                            • DM Jan. 2023 CPI was 6.9%, up 1.5ppts YoY, but falling slightly MoM
                                                                                                                            • EM Jan. 2023 CPI was 8.2%, up 2.9ppts YoY, and is rising MoM
                                                                                                                            
                                                                                                                            

                                                                                                                            Key points

                                                                                                                            • Global CPI was 7.4% in January, up 2.1ppts YoY, but it was flat MoM
                                                                                                                            • Developed world CPI was 6.9%, up 1.5ppts YoY, but falling slightly MoM
                                                                                                                            • Emerging world CPI in January at 8.2%, up 2.9ppts YoY, and it rose MoM
                                                                                                                            
                                                                                                                            

                                                                                                                            Developed Markets Regions

                                                                                                                            CPI is contained in DM Americas, peaking in DM Europe, and rising in DM Asia

                                                                                                                            • With in the Developed Markets, DM Americas is the largest with US$25trn of GDP and 6.3% CPI
                                                                                                                            • Developed Europe has US$15trn of GDP and a higher 8.3% CPI
                                                                                                                            • Developed Pacific is smaller at US$8trn and has the lowest CPI of the developed regions at 5.1%
                                                                                                                            
                                                                                                                            

                                                                                                                            DM Americas CPI falling, DM Europe peaking, DM Asia rising

                                                                                                                            • 12 months ago, DM Americas had a 7.4% CPI which is now down to 6.3%, a 1.1ppts fall
                                                                                                                            • This means that CPI went from 2.1ppts above the global average to 1.1ppts below
                                                                                                                            • DM Europe rose from 4.4% 12 months ago to 8.3%, up 3.8ppts
                                                                                                                            • This means it went from 0.9ppts below to 0.8ppts above the global average
                                                                                                                            • CPI is racing up in DM Pacific from 1.5% 12 months ago to the current 5.1%, that’s a 3.6ppts increase
                                                                                                                            • It has gone from 3.8ppts lower than World CPI to 2.4ppts lower
                                                                                                                            
                                                                                                                            

                                                                                                                            Key points

                                                                                                                            • DM Americas 6.3% January CPI is down from 7.4% 12 months ago; and has now shifted from being 2.1ppts above the global average to 1.1ppts below
                                                                                                                            • CPI nearly doubled in DM Europe over the past 12 months from 4.4% to 8.3%, shifting from about 1ppts below to 1ppts above the global average
                                                                                                                            • CPI in the must smaller DM Pacific region raced up from 1.5% 12 months ago to the current 5.1%; despite that massive 3.6ppts increase, it remains about 2.4ppts lower than the global average
                                                                                                                            
                                                                                                                            

                                                                                                                            Emerging Markets

                                                                                                                            EM CPI rising in Asia, Middle East and Africa, and Frontier markets on fire

                                                                                                                            • EM Americas had a small GDP of US$3.8trn and CPI of 7.9%
                                                                                                                            • EM Asia had a massive GDP of US$25.7trn and 3.2% CPI
                                                                                                                            • EM Europe had US$3.9trn GDP and a massive 23% CPI
                                                                                                                            • EM Middle East and Africa had a small US$1.7trn GDP and a high 10.2% CPI
                                                                                                                            • Finally, Frontier markets had US$2.9trn GDP and 30% CPI
                                                                                                                            
                                                                                                                            

                                                                                                                            EM CPI rising in Asia, Middle East and Africa, and Frontier markets on fire

                                                                                                                            • EM Americas CPI was 7.9% in January, down slightly from 8.5% 12 months ago
                                                                                                                            • EM Asia CPI went from a tiny 1.9% 12 months ago to 3.2% and is still 4.3ppts below the World CPI
                                                                                                                            • Most notably, this has ticked up slightly MoM
                                                                                                                            • EM Europe CPI was 23% and over the past two months has been falling; though it is still 15.5ppts above the World average
                                                                                                                            • EM ME&A CPI was 10.2% compared to 3.7% 12 months ago. It has now risen to be 2.8ppts above the world average compared to 1.7ppts below 12 months ago
                                                                                                                            • Consumer prices are on fire in Frontier markets up 30% YoY in January; this is double where they were 12 months ago; CPI keeps rising MoM and is now 22.5ppts above the world average
                                                                                                                            
                                                                                                                            

                                                                                                                            Key points

                                                                                                                            • EM Americas CPI was 7.9% in January, down slightly from 8.5% 12 months ago
                                                                                                                            • EM Asia CPI went from a tiny 1.9% 12 months ago to 3.2% and is still 4.3ppts below the World CPI. Most notably, this has ticked up slightly MoM
                                                                                                                            • EM Europe CPI was 23% and over the past two months has been falling; though it is still 15.5ppts above the World average
                                                                                                                            • EM ME&A CPI was 10.2% compared to 3.7% 12 months ago. It has now risen to be 2.8ppts above the world average compared to 1.7ppts below 12 months ago
                                                                                                                            • Consumer prices are on fire in Frontier markets up 30% YoY in January; this is double where they were 12 months ago; CPI keeps rising MoM and is now 22.5ppts above the world average
                                                                                                                            
                                                                                                                            

                                                                                                                            Developed Markets

                                                                                                                            CPI is flattening in major developed markets, led by US CPI fall

                                                                                                                            • Top five DM countries
                                                                                                                            
                                                                                                                            

                                                                                                                            Only US CPI is falling YoY; UK has started falling MoM; Germany, Japan, and France are rising

                                                                                                                            • USA CPI was 6.4% in January, down from 7.6% a year ago; it has gone from 2.2ppts above the global average to -1.1ppts below
                                                                                                                            • February just came out for US CPI at 6.0%. Unfortunately, February numbers are not out for all the other countries, so we focus now on January
                                                                                                                            • Japan's CPI went racing up from 0.5% 12 months ago to 4.4% in January; though it remains at a deep discount to the global average, it appears to be closing that gap
                                                                                                                            • Germany's CPI doubled from 4% 12 months ago, which was 1.4ppts below the worldwide average, to 8.8% now, 1.3ppts above the global average
                                                                                                                            • UK CPI started 12 months ago relatively high at 5.4% and is now has doubled to 10.2%; though it has fallen slightly MoM
                                                                                                                            • France's CPI was a low 3% a year ago and has doubled to 6.1%, which is still 1.3ppts below the global average
                                                                                                                            
                                                                                                                            

                                                                                                                            Key points

                                                                                                                            • USA CPI fell to 6.4% in January and 6.0% in February, going from 2.2ppts above the global average to 1.1ppts below
                                                                                                                            • Japan's CPI increased by 8x from 0.5% 12 months ago to 4.4% in January
                                                                                                                            • Germany's CPI doubled to 8.8%, going from 1.4ppts below the worldwide average to 1.3ppts above
                                                                                                                            • UK CPI doubled to 10.2%; though it has fallen slightly MoM
                                                                                                                            • France's CPI doubled to 6.1%, which is still 1.3ppts below the global average
                                                                                                                            
                                                                                                                            

                                                                                                                            Emerging Markets

                                                                                                                            CPI uptick in EM Asia giants, China and India, could keep EM CPI rising

                                                                                                                            • Emerging world
                                                                                                                            
                                                                                                                            

                                                                                                                            CPI is rising YoY in China, India, Korea, and Russia; falling only in Brazil

                                                                                                                            • China's CPI at 2% is low but rising; 12 months ago, it was at 0.8%, and it has been slow to rise, partially because of the covid lockdown; it is 5.4ppts below the global average and could rise substantially
                                                                                                                            • India's 6.5% CPI was almost flat compared to 12 months ago, hovering at about the global average
                                                                                                                            • Korea CPI at 5.2% has been steady at about 2ppts below the global average and is up 1.7ppts from 3.5% 12 months ago
                                                                                                                            • Russia's CPI was 11.8% in January and has been on a steady decline from its 18% peak in April 2022 near the start of the war; though it is still 4.3ppts above the global average
                                                                                                                            • 12 months ago, Brazil was struggling with about 10% CPI, but previous aggressive rate hikes have cut CPI in almost half to 5.8%, taking it from 4.9ppts above the global average to 1.7ppts below
                                                                                                                            
                                                                                                                            

                                                                                                                            Key points

                                                                                                                            • China's 2% CPI is 5.4ppts below the global average and could rise substantially
                                                                                                                            • India's 6.5% CPI has been steady at about the global average, low risk of shock
                                                                                                                            • Korea CPI 5.2% was up 1.7ppts but has been steady at about 2ppts below the global average
                                                                                                                            • Russia's CPI has been on a steady decline from its April 2022 18% peak to 11.8%
                                                                                                                            • Over the past 12 months, Brazil cut its CPI in half to January's 5.8%, moving it from 4.9ppts above the global average to 1.7ppts below
                                                                                                                            
                                                                                                                            

                                                                                                                             

                                                                                                                            Click here to get the PDF with all charts and graphs

                                                                                                                             

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                                                                                                                            ]]>0b093f72-55eb-45be-93d7-5ff4af16e41aTue, 21 Mar 2023 06:00:00 +070020:33falsefullIs global CPI going to follow the US CPI slowdown?ISMS 11: US Banking Crisis and Fed Rate CutDid the Fed finally break something with its aggressive rate rises? I’ve been repeating in my investment strategy that the Fed will eventually break something, and yes, they did. They did.
                                                                                                                            • Was the collapse of the Silicon Valley Bank the beginning of the 2023 US banking crisis?
                                                                                                                            • Has quantitative tightening ended?
                                                                                                                            • Are we in quantitative easing?
                                                                                                                            • Could this spread throughout the US?
                                                                                                                            • Or the global banking system?
                                                                                                                            • Was this caused by the government or the bad behavior of banks?
                                                                                                                            • Is the dollar going up or down due to what’s happening?
                                                                                                                            • Could this trigger a much-anticipated recession in America?
                                                                                                                            • And how does this impact Feds tightening and inflation the Fed is meeting this week?
                                                                                                                            • Did the Fed finally break something with its aggressive rate rises?
                                                                                                                            
                                                                                                                            

                                                                                                                            Was the collapse of the Silicon Valley Bank the beginning of the 2023 US banking crisis?

                                                                                                                            First, we start with the situation of Silicon Valley Bank, which is going bust. In Silicon Valley Bank’s case, first of all, there was a huge influx of deposits into Silicon Valley Bank over the last couple of years, as well as the whole banking sector in the US.

                                                                                                                            Where did these deposits come from? In the US, those deposits came from the US government pumping money into the hands of individuals and companies through the various and massive stimulus programs during the covid shutdown. Those stimulus packages passed by Congress went into the banks as deposits from individuals and companies.

                                                                                                                            Consider the fact that most countries around the world couldn’t do this. Thailand where I am right now, there’s no way the government could print all that money because the currency would have collapsed. And therefore, most governments did not have the privilege of having a reserve currency asset and the ability to print as much money as needed. So America is quite unique in this, and that’s one of the reasons why what’s happening in the US is may not spread to such an extent globally.

                                                                                                                            What did Silicon Valley Bank do when they got all these deposits?

                                                                                                                            Well, they didn’t have enough loans available to lend this money out. A bank does basically three things with the deposits that it receives: 1) it can hold it as cash, 2) it can buy some security or investment, like a security that could be traded, or 3) the traditional business of a bank, is they lend out money.

                                                                                                                            Now if they had a lot of opportunities to lend that money out, they would have locked that money up in loans. Now imagine that a bank had 5% cash, 5% securities, and 90% loans. If people wanted to pull their deposits out of the bank, the bank would have 5% of the money available of their total, and then another 5%, they could sell those securities and repay deposits.

                                                                                                                            Now they could also go to the government to the Fed and borrow some money to repay deposits to prevent a bank run. But it’s not so easy to get out of loans, right? If you’ve lent money to a company and need that money back, you can’t get that. So the loans are very illiquid, but securities are very liquid.

                                                                                                                            After the 2008 crisis, new regulations tried to force the banks to hold more cash

                                                                                                                            Now, let’s add that after the 2008 crisis, basically, the US government came up with new regulations that tried to force the banks to hold more cash and more securities, with the idea being that the combination of cash and securities would be highly liquid assets. And basically, the banks would then be able to pay back if any depositors came, they would be able to pay back.

                                                                                                                            In fact, at the peak liquidity of the banks, you had almost 20% of the US banking sector’s assets in cash and almost 20% in securities. That means almost 40% of the bank’s balance sheet was in highly liquid assets.

                                                                                                                            Now also what the US government did is they said, look, if you buy US Treasuries, we’ll count them as purely risk-free, meaning that you don’t have to put aside any capital for that. And remember, the US government was borrowing tons of money. So they needed the banks to own these treasuries. So they provide an incentive for the banks to own government securities, knowing that 1) those are risk-free assets, and 2) knowing that the federal government was borrowing a ton of money, and they needed the banks, not just the Fed, to buy those to buy the bonds that the Treasury was issuing.

                                                                                                                            I thought that US Treasury bonds were risk-free

                                                                                                                            And now we have all this risk that we’re talking about? Well, where US Treasuries are risk-free is they are credit risk-free. In other words, it’s almost impossible to imagine that the US government wouldn’t print the money needed to pay back the debts that they owe.

                                                                                                                            Now, when they print money to pay back debts that they owe, of course, they’re devaluing the US dollar, but still, you’re gonna get paid. So when we talk about risk-free, we’re talking about credit risk-free, but that doesn’t mean that they’re not interest rate risk-free. In other words, what does that mean?

                                                                                                                            Remember that the Treasury rate for a 10-year bond, going back a few years, was about 1%. Imagine a bank buying a huge portfolio of these 1% government bonds. And then, all of a sudden, the Fed starts to raise interest rates.

                                                                                                                            Let’s say that you own three-year government bonds. And then the Fed starts raising interest rates, and suddenly, someone out in the market could buy a three-year government bond at a, let’s say, 4-5% interest rate. And now you’re holding one that only pays 1%, holy crap; yours is not worth that much compared to others. To get other people to buy the bond you may want to sell, you’ll have to reduce the price. And it’s going to be a price reduction somewhere between 10% and 30, or 40%, depending on the maturity. In this case, we said three-year maturity. And so that means probably a 10 to 20% loss on that bond.

                                                                                                                            Did the Fed cause this problem?

                                                                                                                            Well? Yeah, I think so. Basically, what the Fed did is the Fed aggressively raised interest rates, knowing that all the banks were sitting on a large amount of US Treasury bonds. Now, in the case of US Treasury bonds, whenever you own a bond, you’re exposed to interest rate risk. So what is the risk management of a bank?

                                                                                                                            Well, the risk management of a bank basically looks at all these different risks and says, how do we hedge this particular risk? So technically, the bank’s not really in the business of trying to make a lot of money on this; they’re in the business of raising deposits and lending those out.

                                                                                                                            So what they want to do is protect the risk on their portfolio so that the value of the bond doesn’t collapse, and then all of a sudden, the bank is wiped out? Well, basically, what happened is that many of them, the larger ones, in particular, did do some hedging to try to cover this risk. Now, in the bank’s financial statements, you can see analysis, the type of analysis that they do, which is looking at interest rate risk, and they basically say if the interest rates go up by 100, or 200, or 300 bps, it would cause this amount of potential interest rate risk.

                                                                                                                            Now, if you’re holding a bond to maturity, it’s a little bit different, right? Let’s just say that you as an individual bought a US government bond, that’s a 10-year bond, and you’re gonna hold it for 10 years, and it’s earning 1%. Now, if US Treasury bonds, 10-year treasury bonds now are trading at 5%. If you wanted to sell that bond into the market, yes, you’re going to experience a loss because that bond is no longer attractive because it’s only paying 1%. So you got to reduce the price to equalize the return of that bond between this from 1% to 5%.

                                                                                                                            However, if you say, well, I don’t really care, I bought this bond for 10 years, I’m gonna hold it for 10 years to maturity, then you are not going to experience this risk, or this lower price, in fact, you’re going to get all of your money back. And so when you get all your money back at the end of the 10 years, you have gotten a pure 1% return.

                                                                                                                            And that’s part of what Silicon Valley Bank had done is that they had put there, the excess liquidity that they had, they had put into held-to-maturity bonds. When you hold to maturity under US accounting rules, you don’t need to account for this interest rate risk, because you’re going to be holding to maturity.

                                                                                                                            And there’s a lot of debate about if you were to put that security up for sale; that’s called available-for-sale securities. And for that one, you are going to have to mark it to market and say, well, there’s a big loss on this. But if you hold it to maturity, then you don’t have to. Well, also, what you’re doing is you’re not marking it to market through the P&L. You’re marking it to market through the balance sheet and the equity section of the balance sheet.

                                                                                                                            Silicon Valley Bank received a lot of deposits, they have a lot of customers, and they’re happy with their deposits there. And then something went wrong. And when that one thing went wrong, all of these friends who are all tech startups and tech companies, all of a sudden told each other, hey, take your money out; there’s a risk at Silicon Valley Bank.

                                                                                                                            And all of a sudden, Silicon Valley Bank had a run on the bank, meaning that its deposits were withdrawn superfast. So they sold their available-for-sale securities first because they’d already marked down the value of those. So they didn’t have any major loss from those.

                                                                                                                            But then they had to sell their held-to-maturity assets. It is just like if you owned a 10-year bond, you’re not going to sell it, you’re going to hold it for 10 years, but then you have an emergency in your family, and you are forced to sell it.

                                                                                                                            What is a liquidity event? How does it happen?

                                                                                                                            This is kind of a liquidity event where you need the liquidity. And what happened is that Silicon Valley Bank had to start taking losses on their...]]>Did the Fed finally break something with its aggressive rate rises? I’ve been repeating in my investment strategy that the Fed will eventually break something, and yes, they did. They did.

                                                                                                                            • Was the collapse of the Silicon Valley Bank the beginning of the 2023 US banking crisis?
                                                                                                                            • Has quantitative tightening ended?
                                                                                                                            • Are we in quantitative easing?
                                                                                                                            • Could this spread throughout the US?
                                                                                                                            • Or the global banking system?
                                                                                                                            • Was this caused by the government or the bad behavior of banks?
                                                                                                                            • Is the dollar going up or down due to what’s happening?
                                                                                                                            • Could this trigger a much-anticipated recession in America?
                                                                                                                            • And how does this impact Feds tightening and inflation the Fed is meeting this week?
                                                                                                                            • Did the Fed finally break something with its aggressive rate rises?
                                                                                                                            
                                                                                                                            

                                                                                                                            Was the collapse of the Silicon Valley Bank the beginning of the 2023 US banking crisis?

                                                                                                                            First, we start with the situation of Silicon Valley Bank, which is going bust. In Silicon Valley Bank’s case, first of all, there was a huge influx of deposits into Silicon Valley Bank over the last couple of years, as well as the whole banking sector in the US.

                                                                                                                            Where did these deposits come from? In the US, those deposits came from the US government pumping money into the hands of individuals and companies through the various and massive stimulus programs during the covid shutdown. Those stimulus packages passed by Congress went into the banks as deposits from individuals and companies.

                                                                                                                            Consider the fact that most countries around the world couldn’t do this. Thailand where I am right now, there’s no way the government could print all that money because the currency would have collapsed. And therefore, most governments did not have the privilege of having a reserve currency asset and the ability to print as much money as needed. So America is quite unique in this, and that’s one of the reasons why what’s happening in the US is may not spread to such an extent globally.

                                                                                                                            What did Silicon Valley Bank do when they got all these deposits?

                                                                                                                            Well, they didn’t have enough loans available to lend this money out. A bank does basically three things with the deposits that it receives: 1) it can hold it as cash, 2) it can buy some security or investment, like a security that could be traded, or 3) the traditional business of a bank, is they lend out money.

                                                                                                                            Now if they had a lot of opportunities to lend that money out, they would have locked that money up in loans. Now imagine that a bank had 5% cash, 5% securities, and 90% loans. If people wanted to pull their deposits out of the bank, the bank would have 5% of the money available of their total, and then another 5%, they could sell those securities and repay deposits.

                                                                                                                            Now they could also go to the government to the Fed and borrow some money to repay deposits to prevent a bank run. But it’s not so easy to get out of loans, right? If you’ve lent money to a company and need that money back, you can’t get that. So the loans are very illiquid, but securities are very liquid.

                                                                                                                            After the 2008 crisis, new regulations tried to force the banks to hold more cash

                                                                                                                            Now, let’s add that after the 2008 crisis, basically, the US government came up with new regulations that tried to force the banks to hold more cash and more securities, with the idea being that the combination of cash and securities would be highly liquid assets. And basically, the banks would then be able to pay back if any depositors came, they would be able to pay back.

                                                                                                                            In fact, at the peak liquidity of the banks, you had almost 20% of the US banking sector’s assets in cash and almost 20% in securities. That means almost 40% of the bank’s balance sheet was in highly liquid assets.

                                                                                                                            Now also what the US government did is they said, look, if you buy US Treasuries, we’ll count them as purely risk-free, meaning that you don’t have to put aside any capital for that. And remember, the US government was borrowing tons of money. So they needed the banks to own these treasuries. So they provide an incentive for the banks to own government securities, knowing that 1) those are risk-free assets, and 2) knowing that the federal government was borrowing a ton of money, and they needed the banks, not just the Fed, to buy those to buy the bonds that the Treasury was issuing.

                                                                                                                            I thought that US Treasury bonds were risk-free

                                                                                                                            And now we have all this risk that we’re talking about? Well, where US Treasuries are risk-free is they are credit risk-free. In other words, it’s almost impossible to imagine that the US government wouldn’t print the money needed to pay back the debts that they owe.

                                                                                                                            Now, when they print money to pay back debts that they owe, of course, they’re devaluing the US dollar, but still, you’re gonna get paid. So when we talk about risk-free, we’re talking about credit risk-free, but that doesn’t mean that they’re not interest rate risk-free. In other words, what does that mean?

                                                                                                                            Remember that the Treasury rate for a 10-year bond, going back a few years, was about 1%. Imagine a bank buying a huge portfolio of these 1% government bonds. And then, all of a sudden, the Fed starts to raise interest rates.

                                                                                                                            Let’s say that you own three-year government bonds. And then the Fed starts raising interest rates, and suddenly, someone out in the market could buy a three-year government bond at a, let’s say, 4-5% interest rate. And now you’re holding one that only pays 1%, holy crap; yours is not worth that much compared to others. To get other people to buy the bond you may want to sell, you’ll have to reduce the price. And it’s going to be a price reduction somewhere between 10% and 30, or 40%, depending on the maturity. In this case, we said three-year maturity. And so that means probably a 10 to 20% loss on that bond.

                                                                                                                            Did the Fed cause this problem?

                                                                                                                            Well? Yeah, I think so. Basically, what the Fed did is the Fed aggressively raised interest rates, knowing that all the banks were sitting on a large amount of US Treasury bonds. Now, in the case of US Treasury bonds, whenever you own a bond, you’re exposed to interest rate risk. So what is the risk management of a bank?

                                                                                                                            Well, the risk management of a bank basically looks at all these different risks and says, how do we hedge this particular risk? So technically, the bank’s not really in the business of trying to make a lot of money on this; they’re in the business of raising deposits and lending those out.

                                                                                                                            So what they want to do is protect the risk on their portfolio so that the value of the bond doesn’t collapse, and then all of a sudden, the bank is wiped out? Well, basically, what happened is that many of them, the larger ones, in particular, did do some hedging to try to cover this risk. Now, in the bank’s financial statements, you can see analysis, the type of analysis that they do, which is looking at interest rate risk, and they basically say if the interest rates go up by 100, or 200, or 300 bps, it would cause this amount of potential interest rate risk.

                                                                                                                            Now, if you’re holding a bond to maturity, it’s a little bit different, right? Let’s just say that you as an individual bought a US government bond, that’s a 10-year bond, and you’re gonna hold it for 10 years, and it’s earning 1%. Now, if US Treasury bonds, 10-year treasury bonds now are trading at 5%. If you wanted to sell that bond into the market, yes, you’re going to experience a loss because that bond is no longer attractive because it’s only paying 1%. So you got to reduce the price to equalize the return of that bond between this from 1% to 5%.

                                                                                                                            However, if you say, well, I don’t really care, I bought this bond for 10 years, I’m gonna hold it for 10 years to maturity, then you are not going to experience this risk, or this lower price, in fact, you’re going to get all of your money back. And so when you get all your money back at the end of the 10 years, you have gotten a pure 1% return.

                                                                                                                            And that’s part of what Silicon Valley Bank had done is that they had put there, the excess liquidity that they had, they had put into held-to-maturity bonds. When you hold to maturity under US accounting rules, you don’t need to account for this interest rate risk, because you’re going to be holding to maturity.

                                                                                                                            And there’s a lot of debate about if you were to put that security up for sale; that’s called available-for-sale securities. And for that one, you are going to have to mark it to market and say, well, there’s a big loss on this. But if you hold it to maturity, then you don’t have to. Well, also, what you’re doing is you’re not marking it to market through the P&L. You’re marking it to market through the balance sheet and the equity section of the balance sheet.

                                                                                                                            Silicon Valley Bank received a lot of deposits, they have a lot of customers, and they’re happy with their deposits there. And then something went wrong. And when that one thing went wrong, all of these friends who are all tech startups and tech companies, all of a sudden told each other, hey, take your money out; there’s a risk at Silicon Valley Bank.

                                                                                                                            And all of a sudden, Silicon Valley Bank had a run on the bank, meaning that its deposits were withdrawn superfast. So they sold their available-for-sale securities first because they’d already marked down the value of those. So they didn’t have any major loss from those.

                                                                                                                            But then they had to sell their held-to-maturity assets. It is just like if you owned a 10-year bond, you’re not going to sell it, you’re going to hold it for 10 years, but then you have an emergency in your family, and you are forced to sell it.

                                                                                                                            What is a liquidity event? How does it happen?

                                                                                                                            This is kind of a liquidity event where you need the liquidity. And what happened is that Silicon Valley Bank had to start taking losses on their held-to-maturity securities. It’s a debate because I know that in the EU and other places, banks are basically required to show the potential losses on their held-to-maturity. Also, there’s other issues about how you hedge that and how you report the hedging on it.

                                                                                                                            These are remarks by FDIC Chairman Mark Martin Greenberg at the Institute of international bankers. And he gave this presentation on March 6, so before Silicon Valley Bank collapse happened, and what did he say? I think the most important thing that he said is the following.

                                                                                                                            “The current interest rate environment has had dramatic effects on the profitability and risk profile of banks’ funding and investment strategies. First, as a result of the higher interest rates, longer term maturity assets acquired by banks when interest rates were lower are now worth less than their face values. The result is that most banks have some amount of unrealized losses on securities. The total of these unrealized losses, including securities that are available for sale or held to maturity, was about $620 billion at yearend 2022. Unrealized losses on securities have meaningfully reduced the reported equity capital of the banking industry.”

                                                                                                                            Then on March 12, there was a joint statement by the Treasury of Federal Reserve and FDIC, which means Janet Yellen and Jerome Powell and FDIC Chairman Martin Greenberg. So just six days later, they said to take decisive action. I’m quoting from the the announcement,

                                                                                                                            “Today we are taking decisive actions to protect the US economy by strengthening public confidence in our banking system. This step will ensure that the US banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth.

                                                                                                                            After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors. Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.

                                                                                                                            We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority. All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.

                                                                                                                            Shareholders and certain unsecured debtholders will not be protected. Senior management has also been removed. Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law.”

                                                                                                                            Everything that the federal government does is supported by taxpayers

                                                                                                                            Of course, everything that the federal government does is supported by taxpayers. And the result of this is that if they say that this money is coming out of a fund, the banks have contributed to the other banks, belt, also, that comes from the back of the taxpayers. So what we have here is the Fed coming in, and the Treasury and the FDIC, and basically saying, everybody’s gonna get their money back.

                                                                                                                            Now, this is a big problem. Why is this a problem? Because only a small number of depositors at Silicon Valley Bank were actually guaranteed by the FDIC. And yet here we have a blanket guarantee. And this is a particularly big moral hazard. Now, some people would say, well, you have to do that; otherwise, money’s going to come out of every bank. They’re going to move money, either home and put it under their mattress, or they’re going to go and put their money into a bigger bank that they trust more.

                                                                                                                            The Fed knows that other banks are sitting on unrealized losses related to their bond portfolio of US Treasury bonds because they’re holding 1% yielding bonds, and the Fed has increased interest rates up to almost 5%. And the result of that is that they have massive unrealized losses.

                                                                                                                            We’ve seen the chairman of the FDIC say those losses amounted to about $620 billion in his estimate at the end of 2022. Just imagine that there’s probably more that come out, you know, from under the woodwork.

                                                                                                                            Also on March 12, the Federal Reserve Board announced it will make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors. Okay, so this is where the government comes in and says we’re going to protect the whole system.

                                                                                                                            How are we going to do that?

                                                                                                                            The Bank Term Funding Program (BTFP)

                                                                                                                            “The Fed set up a new borrowing facility, the Bank Term Funding Program (BTFP) offering loans of up to one year in length to banks, savings associations, credit unions and other eligible depository institutions, pledging US Treasuries, agency debt and mortgage-backed securities, and other qualifying assets as collateral. The Fund has $125 billion (bn) and it can borrow another $100 bn from Treasury.

                                                                                                                            The assets will be valued at par, so that banks won’t have to sell US treasuries at a loss in order to redeem deposits as was the case for SVB.”

                                                                                                                            So the fund can borrow 100-125 billion and another 100 billion from the Treasury. But the kicker is, remember, all of these unrealized losses are because the value of those bonds that were yielding 1% has collapsed. And those bonds now are maybe 20-30% down in price. They say the assets will be valued at par so that banks won’t have to sell US Treasuries at a loss to redeemed deposit. As was the case with Silicon Valley Bank.

                                                                                                                            Okay, so let’s talk about this for a second. What did they do? First, they gave kind of an implicit guarantee of all deposits at Silicon Valley Bank. And then the next thing they did is they said, if any other bank is facing this problem, and you’ve got massive losses, good news, we’ll help you hide those losses. We’ll hold those losses for year off your balance sheet. This is a very sneaky way of basically trying to prevent losses from hitting the balance sheets of the banks and collapsing the whole system.

                                                                                                                            Fed will hold the losses for banks at risk

                                                                                                                            Now what’s happening is all of these small and midsize and regional banks, remember, America has almost 5,000 banks, all of these guys are facing deposit outflows. The result of those deposit outflows are that they have to sell government securities. And suppose they have to sell those government securities at a loss. In that case, it’s going to crush their capital, and all of a sudden, you’re gonna have hundreds, if not thousands of banks, that could be in a difficult situation as far as capital is concerned.

                                                                                                                            So instead of that, what they’re basically saying is all you guys can come to the Fed. And you can pledge that security at 100%. We’ll hold those losses for a year, and at the end of the year, we’ll figure out what we’re going to do.

                                                                                                                            Is this quantitative easing (QE)?

                                                                                                                            Well, there are some people that say that this is not quantitative easing because it’s a swap so that it’s just one asset on the balance sheet of that now has been swapped out as cash. So technically, you could say that when you’re swapping assets with the central bank, it’s not really QE.

                                                                                                                            However, a second reason why people say that it may not be QE is because it’s also a short-term situation where in one year, those assets are going to go right back, and the losses are going to go on to the bank’s balance sheets.

                                                                                                                            Well, come on, you think that the Fed, if things go bad, a year from now, they’re going to force all the banks handle the losses?

                                                                                                                            One of the best ways to understand this, is just look at the assets of the balance sheet. Remember, that for the past year or so the central bank of the US, the Fed has been telling us that they’re doing quantitative tightening, and quantitative tightening means they’re reducing the size of their balance sheet. And also quantitative tightening has to do with, you know, increasing interest rates.

                                                                                                                            From my experience and what I’ve seen in the banking system, as well as with the Fed, my prediction is quantitative tightening won’t last for long; eventually, quantitative easing will come back. Why?

                                                                                                                            Because now, the US is in such a situation where it just can’t bear pain. Politicians can’t bear pain. Individuals can’t bear pain. And if you’re bringing pain upon the system, you’re gonna get voted out of office. Why let them bear pain when you can solve this problem?

                                                                                                                            And that’s one of the reasons why looking at the repeated times that the Fed tried to get off quantitative tightening and to quantitative easing. They wanted to do quantitative tightening but every time they did it, they barely did it. And then eventually, they had to reverse it. And they had to go back to quantitative easing.

                                                                                                                            So to answer the question that I asked at the beginning, is this the end of quantitative tightening and the beginning of QE? Yes, it is. How do I know? Because the assets of the balance sheet or the assets of the Fed just increased after roughly a year of small decreases? It increased by nearly $300 billion as a result of them providing funding and buying the assets from the bank. So the answer to that question is yes, we are now in QE5; how long it will last?

                                                                                                                            11 banks announce $30 million in deposits into First Republic Bank

                                                                                                                            “Washington, DC -- The following statement was released by Secretary of the Treasury Janet L. Yellen, Federal Reserve Board Chair Jerome H. Powell, FDIC Chairman Martin J. Gruenberg, and Acting Comptroller of the Currency Michael J. Hsu:

                                                                                                                            Today, 11 banks announced $30...]]>f2a1ed50-5333-40af-ad97-6b1a644af2baMon, 20 Mar 2023 08:00:00 +070043:50falsefullDid the Fed finally break something with its aggressive rate rises? I’ve been repeating in my investment strategy that the Fed will eventually break something, and yes, they did. They did.ISMS 10: US CPI Could Decline to 4% By YE23; Unless QE Revs UpIs US CPI going up or down by yearend 2023?

                                                                                                                            Feb 2023 US CPI was 6%, down from 6.4% in Jan and off its June 2022 peak 9.1%

                                                                                                                            Food accounts for 13.5% of CPI and was a high 9.5% in February

                                                                                                                            Food has come off its Aug 2022 11.4% peak

                                                                                                                            Energy accounts for 7.1% of US CPI and was up only 5.2%

                                                                                                                            Energy has come down considerably from its 41.6% June 2022 peak

                                                                                                                            When oil price rises, it causes a similar, but muted rise in the US CPI energy component

                                                                                                                            • Correlation between oil price and the energy component of CPI is about 90%
                                                                                                                            
                                                                                                                            

                                                                                                                            Food and energy are a tiny part of US CPI, 79% of the weight comes from all other items

                                                                                                                            Non-food and energy items are less volatile and total CPI is coming back down to that level

                                                                                                                            • This less volatile and slow to adjust group of products and services illustrates why I was previously arguing that overall CPI was unlikely to come down fast
                                                                                                                            
                                                                                                                            

                                                                                                                            Most volatility in US CPI comes from the energy component, which accounts for only 7% of CPI

                                                                                                                            The largest impact on the food category is “Food at home” which was up 10.2%

                                                                                                                            • This is coming from supply chain pressures that take a long time to work through
                                                                                                                            
                                                                                                                            

                                                                                                                            Though high, food at home peaked in August 2022’s 13.5% high and has fallen 3ppts

                                                                                                                            • Food away from home never was exceptionally high and as a result is slowly falling
                                                                                                                            
                                                                                                                            

                                                                                                                            Energy is 7% of US CPI and is broken equally into commodities related and services

                                                                                                                            • Commodities is related to the oil and gas that Americans buy
                                                                                                                            • Energy services show how energy costs feed into the price of electricity that individuals and businesses pay
                                                                                                                            
                                                                                                                            

                                                                                                                            Gasoline prices were the main driver and at its peak in Jun 2022 was up 60%

                                                                                                                            • Biden’s first drawdown of emergency oil stockpiles from the Strategic Petroleum Reserve was in November 2021, just before the election
                                                                                                                            
                                                                                                                            

                                                                                                                            In 2022, Biden released 222 million barrels of oil from the Strategic Petroleum Reserve

                                                                                                                            • This 38% reduction increased worldwide supply and helped bring down oil price
                                                                                                                            
                                                                                                                            

                                                                                                                            21% of CPI comes from products like cars and cars, which were only up 1%

                                                                                                                            • The cost of homes is the largest part of the US CPI at 34% and it was up 7.3%
                                                                                                                            
                                                                                                                            

                                                                                                                            Services excluding energy services is mainly comprised of owner's equivalent rent

                                                                                                                            • OER is still slowly adjusting up as a result of the rise in home prices
                                                                                                                            • This accounts for 30% of CPI and will take months to adjust down
                                                                                                                            
                                                                                                                            

                                                                                                                            Oil price moved from US$39/bbl in Oct 2020 to US$82/bbl 12 months later

                                                                                                                            • The peak was US$114/bbl in June 2022
                                                                                                                            
                                                                                                                            

                                                                                                                            US housing price were rising at 5% per year since 2012

                                                                                                                            • They shot up 12% in 2020 thanks to the Feds near zero interest rates
                                                                                                                            • Then they went up a massive 18% in 2021
                                                                                                                            • 30-year fixed mortgage rate hovered around 3% from July 2020 to October 2021. Now 6%
                                                                                                                            
                                                                                                                            

                                                                                                                            Summary

                                                                                                                            • Feb 2023 US CPI was 6%, down from 6.4% in Jan and off its June 2022 peak 9.1%
                                                                                                                            • Food accounts for 13.5% of CPI and was a high 9.5% in February; “Food at home” was up 10.2%, showing lingering supply chain pressures
                                                                                                                            • Energy is a small component of US CPI and was up only 5.2%, down considerably from its 41.6% June 2022 peak
                                                                                                                            • The correlation between oil price and the energy component of CPI is about 90%, so with oil prices down, US CPI is down
                                                                                                                            • Biden’s 38% drawdown of the Strategic Petroleum Reserve in November 2021, just before the election, increased worldwide supply and helped bring about that oil fall
                                                                                                                            • Oil prices feed slowly into the price of electricity; hence energy services were up 13.3% and will be slow to fall
                                                                                                                            • 79% of the weight comes from ex-food and energy items, which is much less volatile
                                                                                                                            • Cars, apparel, and the like are about 21% of CPI was only up 1%
                                                                                                                            • The cost of homes is the largest part of the US CPI at 34% and it was up 7.3%, comprised mainly of owner's equivalent rent which have slowly adjusted for rising home prices and is not yet reflecting the fall in home prices
                                                                                                                            • US housing price were rising at 5% per year since 2012 and then shot up 12% in 2020 thanks to the Fed’s near zero interest rates, then prices rose a massive 18% in 2021
                                                                                                                            • 30-year fixed mortgage rate hovered around 3% from July 2020 to October 2021. Now 6%
                                                                                                                            • It will be many months before the slowdown in the mortgage will be reflected in US CPI
                                                                                                                            
                                                                                                                            

                                                                                                                            Click here to get the PDF with all charts and graphs

                                                                                                                             

                                                                                                                            Andrew’s books

                                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                            • My Worst Investment Ever
                                                                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                            
                                                                                                                            

                                                                                                                            Andrew’s online programs

                                                                                                                            • Valuation Master Class
                                                                                                                            • The Become a Better Investor Community
                                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                            • Finance Made Ridiculously Simple
                                                                                                                            • FVMR Investing: Quantamental Investing Across the World
                                                                                                                            • Become a Great Presenter and Increase Your Influence
                                                                                                                            • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                            • Achieve Your Goals
                                                                                                                            
                                                                                                                            

                                                                                                                            Connect with Andrew Stotz:

                                                                                                                            • astotz.com
                                                                                                                            • LinkedIn
                                                                                                                            • Facebook
                                                                                                                            • Instagram
                                                                                                                            • Twitter
                                                                                                                            • YouTube
                                                                                                                            • My Worst Investment Ever Podcast
                                                                                                                            
                                                                                                                            ]]>Is US CPI going up or down by yearend 2023?

                                                                                                                            Feb 2023 US CPI was 6%, down from 6.4% in Jan and off its June 2022 peak 9.1%

                                                                                                                            Food accounts for 13.5% of CPI and was a high 9.5% in February

                                                                                                                            Food has come off its Aug 2022 11.4% peak

                                                                                                                            Energy accounts for 7.1% of US CPI and was up only 5.2%

                                                                                                                            Energy has come down considerably from its 41.6% June 2022 peak

                                                                                                                            When oil price rises, it causes a similar, but muted rise in the US CPI energy component

                                                                                                                            • Correlation between oil price and the energy component of CPI is about 90%
                                                                                                                            
                                                                                                                            

                                                                                                                            Food and energy are a tiny part of US CPI, 79% of the weight comes from all other items

                                                                                                                            Non-food and energy items are less volatile and total CPI is coming back down to that level

                                                                                                                            • This less volatile and slow to adjust group of products and services illustrates why I was previously arguing that overall CPI was unlikely to come down fast
                                                                                                                            
                                                                                                                            

                                                                                                                            Most volatility in US CPI comes from the energy component, which accounts for only 7% of CPI

                                                                                                                            The largest impact on the food category is “Food at home” which was up 10.2%

                                                                                                                            • This is coming from supply chain pressures that take a long time to work through
                                                                                                                            
                                                                                                                            

                                                                                                                            Though high, food at home peaked in August 2022’s 13.5% high and has fallen 3ppts

                                                                                                                            • Food away from home never was exceptionally high and as a result is slowly falling
                                                                                                                            
                                                                                                                            

                                                                                                                            Energy is 7% of US CPI and is broken equally into commodities related and services

                                                                                                                            • Commodities is related to the oil and gas that Americans buy
                                                                                                                            • Energy services show how energy costs feed into the price of electricity that individuals and businesses pay
                                                                                                                            
                                                                                                                            

                                                                                                                            Gasoline prices were the main driver and at its peak in Jun 2022 was up 60%

                                                                                                                            • Biden’s first drawdown of emergency oil stockpiles from the Strategic Petroleum Reserve was in November 2021, just before the election
                                                                                                                            
                                                                                                                            

                                                                                                                            In 2022, Biden released 222 million barrels of oil from the Strategic Petroleum Reserve

                                                                                                                            • This 38% reduction increased worldwide supply and helped bring down oil price
                                                                                                                            
                                                                                                                            

                                                                                                                            21% of CPI comes from products like cars and cars, which were only up 1%

                                                                                                                            • The cost of homes is the largest part of the US CPI at 34% and it was up 7.3%
                                                                                                                            
                                                                                                                            

                                                                                                                            Services excluding energy services is mainly comprised of owner's equivalent rent

                                                                                                                            • OER is still slowly adjusting up as a result of the rise in home prices
                                                                                                                            • This accounts for 30% of CPI and will take months to adjust down
                                                                                                                            
                                                                                                                            

                                                                                                                            Oil price moved from US$39/bbl in Oct 2020 to US$82/bbl 12 months later

                                                                                                                            • The peak was US$114/bbl in June 2022
                                                                                                                            
                                                                                                                            

                                                                                                                            US housing price were rising at 5% per year since 2012

                                                                                                                            • They shot up 12% in 2020 thanks to the Feds near zero interest rates
                                                                                                                            • Then they went up a massive 18% in 2021
                                                                                                                            • 30-year fixed mortgage rate hovered around 3% from July 2020 to October 2021. Now 6%
                                                                                                                            
                                                                                                                            

                                                                                                                            Summary

                                                                                                                            • Feb 2023 US CPI was 6%, down from 6.4% in Jan and off its June 2022 peak 9.1%
                                                                                                                            • Food accounts for 13.5% of CPI and was a high 9.5% in February; “Food at home” was up 10.2%, showing lingering supply chain pressures
                                                                                                                            • Energy is a small component of US CPI and was up only 5.2%, down considerably from its 41.6% June 2022 peak
                                                                                                                            • The correlation between oil price and the energy component of CPI is about 90%, so with oil prices down, US CPI is down
                                                                                                                            • Biden’s 38% drawdown of the Strategic Petroleum Reserve in November 2021, just before the election, increased worldwide supply and helped bring about that oil fall
                                                                                                                            • Oil prices feed slowly into the price of electricity; hence energy services were up 13.3% and will be slow to fall
                                                                                                                            • 79% of the weight comes from ex-food and energy items, which is much less volatile
                                                                                                                            • Cars, apparel, and the like are about 21% of CPI was only up 1%
                                                                                                                            • The cost of homes is the largest part of the US CPI at 34% and it was up 7.3%, comprised mainly of owner's equivalent rent which have slowly adjusted for rising home prices and is not yet reflecting the fall in home prices
                                                                                                                            • US housing price were rising at 5% per year since 2012 and then shot up 12% in 2020 thanks to the Fed’s near zero interest rates, then prices rose a massive 18% in 2021
                                                                                                                            • 30-year fixed mortgage rate hovered around 3% from July 2020 to October 2021. Now 6%
                                                                                                                            • It will be many months before the slowdown in the mortgage will be reflected in US CPI
                                                                                                                            
                                                                                                                            

                                                                                                                            Click here to get the PDF with all charts and graphs

                                                                                                                             

                                                                                                                            Andrew’s books

                                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                            • My Worst Investment Ever
                                                                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                            
                                                                                                                            

                                                                                                                            Andrew’s online programs

                                                                                                                            • Valuation Master Class
                                                                                                                            • The Become a Better Investor Community
                                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                            • Finance Made Ridiculously Simple
                                                                                                                            • FVMR Investing: Quantamental Investing Across the World
                                                                                                                            • Become a Great Presenter and Increase Your Influence
                                                                                                                            • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                            • Achieve Your Goals
                                                                                                                            
                                                                                                                            

                                                                                                                            Connect with Andrew Stotz:

                                                                                                                            • astotz.com
                                                                                                                            • LinkedIn
                                                                                                                            • Facebook
                                                                                                                            • Instagram
                                                                                                                            • Twitter
                                                                                                                            • YouTube
                                                                                                                            • My Worst Investment Ever Podcast
                                                                                                                            
                                                                                                                            ]]>fc56fd9a-f921-47ed-b015-98792c781110Mon, 20 Mar 2023 07:00:00 +070012:16falsefullIs US CPI going up or down by yearend 2023?Michelle Leder – Read the 10-K Before You Buy That StockBIO: Michelle Leder has probably read more SEC filings than just about anyone else on the planet since writing her book, Financial Fineprint: Uncovering a Company’s True Value, and starting her website, footnoted.com nearly 20 years ago.

                                                                                                                            STORY: Michelle invested in a company without going through important SEC reports.

                                                                                                                            LEARNING: Dig deep into the company’s 10-K annual report before investing. Look at the risk factors and what the company says about risk.

                                                                                                                             

                                                                                                                            “Pay attention to the stuff in the 10-K if it is a significant position for you.”

                                                                                                                            Michelle Leder

                                                                                                                             

                                                                                                                            Guest profile

                                                                                                                            Michelle Leder has probably read more SEC filings than just about anyone else on the planet since writing her book, Financial Fineprint: Uncovering a Company’s True Value, and starting her website, footnoted nearly 20 years ago.

                                                                                                                            Michelle recently relaunched Friday Night Dump, a weekly newsletter. It focuses on SEC filings made after 4 pm on Friday afternoons when companies tend to bury the most negative information that they are required to disclose.

                                                                                                                            Worst investment ever

                                                                                                                            Twenty years ago, Michelle was relatively new to investing and had been a business journalist for about 10 years. She bought some shares of Quest Communications because she was covering IBM at the time. IBM had just announced a big deal with Quest. Michelle thought this would be an excellent opportunity to buy some Quest shares. She watched the shares go up until they stopped and started plummeting.

                                                                                                                            Michelle went back, and I looked at the footnotes she’d collected while researching IBM. She discovered that IBM had booked the whole billion dollars for the deal with Quest upfront in year one, even though it was a 10-year deal. Michelle had missed this, so she watched Quest go all the way down.

                                                                                                                            Lessons learned

                                                                                                                            • It’s a great time of year to dive into investing, as 10-K reports have been filed.
                                                                                                                            • Before investing, look at the risk factors and what the company says about risk.
                                                                                                                            • Dig deep into the company’s 10-K annual report for a clear picture of its financial performance.
                                                                                                                            • A 10-K report contains much more detail than a company’s annual report. It will give you enough information before you buy or sell shares in the company.
                                                                                                                            • For every significant position in your portfolio, ensure you’re aware of important details such as revenue recognition and inventory disclosures.
                                                                                                                            
                                                                                                                            

                                                                                                                            Andrew’s takeaways

                                                                                                                            • Financial statements and annual reports are a treasure trove of information for analysts.
                                                                                                                            
                                                                                                                            

                                                                                                                            Michelle’s recommendations

                                                                                                                            Start with one or two companies you know well. See what you can discover by reading essential filings like the 10k and proxy statements. Does the new information you get make a difference?

                                                                                                                            No.1 goal for the next 12 months

                                                                                                                            Michelle’s number one goal for the next 12 months is to focus a lot more on her business.

                                                                                                                            Parting words

                                                                                                                             

                                                                                                                            “Life is a learning experience. In the end, it’s not about the money; it’s about the quality of your relationships.”

                                                                                                                            Michelle Leder

                                                                                                                             

                                                                                                                            Connect with Michelle Leder

                                                                                                                            • LinkedIn
                                                                                                                            • Twitter
                                                                                                                            • Website
                                                                                                                            • Book
                                                                                                                            
                                                                                                                            

                                                                                                                            Andrew’s books

                                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                            • My Worst Investment Ever
                                                                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                            
                                                                                                                            

                                                                                                                            Andrew’s online programs

                                                                                                                            • Valuation Master Class
                                                                                                                            • The Become a Better Investor Community
                                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                            • Finance Made Ridiculously Simple
                                                                                                                            • FVMR Investing: Quantamental Investing Across the World
                                                                                                                            • Become a Great Presenter and Increase Your Influence
                                                                                                                            • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                            • Achieve Your Goals
                                                                                                                            
                                                                                                                            

                                                                                                                            Connect with Andrew Stotz:

                                                                                                                            • astotz.com
                                                                                                                            • LinkedIn
                                                                                                                            • Facebook
                                                                                                                            • Instagram
                                                                                                                            • Twitter
                                                                                                                            • YouTube
                                                                                                                            • My Worst Investment Ever Podcast
                                                                                                                            
                                                                                                                            ]]>BIO: Michelle Leder has probably read more SEC filings than just about anyone else on the planet since writing her book, Financial Fineprint: Uncovering a Company’s True Value, and starting her website, footnoted.com nearly 20 years ago.

                                                                                                                            STORY: Michelle invested in a company without going through important SEC reports.

                                                                                                                            LEARNING: Dig deep into the company’s 10-K annual report before investing. Look at the risk factors and what the company says about risk.

                                                                                                                             

                                                                                                                            “Pay attention to the stuff in the 10-K if it is a significant position for you.”

                                                                                                                            Michelle Leder

                                                                                                                             

                                                                                                                            Guest profile

                                                                                                                            Michelle Leder has probably read more SEC filings than just about anyone else on the planet since writing her book, Financial Fineprint: Uncovering a Company’s True Value, and starting her website, footnoted nearly 20 years ago.

                                                                                                                            Michelle recently relaunched Friday Night Dump, a weekly newsletter. It focuses on SEC filings made after 4 pm on Friday afternoons when companies tend to bury the most negative information that they are required to disclose.

                                                                                                                            Worst investment ever

                                                                                                                            Twenty years ago, Michelle was relatively new to investing and had been a business journalist for about 10 years. She bought some shares of Quest Communications because she was covering IBM at the time. IBM had just announced a big deal with Quest. Michelle thought this would be an excellent opportunity to buy some Quest shares. She watched the shares go up until they stopped and started plummeting.

                                                                                                                            Michelle went back, and I looked at the footnotes she’d collected while researching IBM. She discovered that IBM had booked the whole billion dollars for the deal with Quest upfront in year one, even though it was a 10-year deal. Michelle had missed this, so she watched Quest go all the way down.

                                                                                                                            Lessons learned

                                                                                                                            • It’s a great time of year to dive into investing, as 10-K reports have been filed.
                                                                                                                            • Before investing, look at the risk factors and what the company says about risk.
                                                                                                                            • Dig deep into the company’s 10-K annual report for a clear picture of its financial performance.
                                                                                                                            • A 10-K report contains much more detail than a company’s annual report. It will give you enough information before you buy or sell shares in the company.
                                                                                                                            • For every significant position in your portfolio, ensure you’re aware of important details such as revenue recognition and inventory disclosures.
                                                                                                                            
                                                                                                                            

                                                                                                                            Andrew’s takeaways

                                                                                                                            • Financial statements and annual reports are a treasure trove of information for analysts.
                                                                                                                            
                                                                                                                            

                                                                                                                            Michelle’s recommendations

                                                                                                                            Start with one or two companies you know well. See what you can discover by reading essential filings like the 10k and proxy statements. Does the new information you get make a difference?

                                                                                                                            No.1 goal for the next 12 months

                                                                                                                            Michelle’s number one goal for the next 12 months is to focus a lot more on her business.

                                                                                                                            Parting words

                                                                                                                             

                                                                                                                            “Life is a learning experience. In the end, it’s not about the money; it’s about the quality of your relationships.”

                                                                                                                            Michelle Leder

                                                                                                                             

                                                                                                                            Connect with Michelle Leder

                                                                                                                            • LinkedIn
                                                                                                                            • Twitter
                                                                                                                            • Website
                                                                                                                            • Book
                                                                                                                            
                                                                                                                            

                                                                                                                            Andrew’s books

                                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                            • My Worst Investment Ever
                                                                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                            
                                                                                                                            

                                                                                                                            Andrew’s online programs

                                                                                                                            • Valuation Master Class
                                                                                                                            • The Become a Better Investor Community
                                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                            • Finance Made Ridiculously Simple
                                                                                                                            • FVMR Investing: Quantamental Investing Across the World
                                                                                                                            • Become a Great Presenter and Increase Your Influence
                                                                                                                            • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                            • Achieve Your Goals
                                                                                                                            
                                                                                                                            

                                                                                                                            Connect with Andrew Stotz:

                                                                                                                            • astotz.com
                                                                                                                            • LinkedIn
                                                                                                                            • Facebook
                                                                                                                            • Instagram
                                                                                                                            • Twitter
                                                                                                                            • YouTube
                                                                                                                            • My Worst Investment Ever Podcast
                                                                                                                            
                                                                                                                            ]]>24d559d4-d492-4810-aefd-c79f2b78065bMon, 20 Mar 2023 06:00:00 +070045:17falsefullMichelle Leder has probably read more SEC filings than just about anyone else on the planet since writing her book, Financial Fineprint: Uncovering a Company’s True Value, and starting her website, footnoted.com nearly 20 years ago.ISMS 9: Saving Silicon Valley Bank Brings New RisksThe Silicon Valley Bank crisis started when the US government shut down its economy

                                                                                                                            The Silicon Valley Bank crisis started when the US government shut down the economy from 2020 to 2021.

                                                                                                                            Let’s take a step back to January 29th, 2020, when President Donald Trump announced a White House Coronavirus Response task force with the director of the National Institute of Allergy and Infectious Diseases, Anthony Fauci, and Deborah Brix as coordinator.

                                                                                                                            The decision to shut down the economy originated from this body but was ultimately implemented by President Trump, members of congress, and eventually President Joe Biden. This decision was truly the worst decision I have ever seen a government make in my lifetime.

                                                                                                                            Businesses and individuals saw their income collapse

                                                                                                                            During that time, businesses and individuals saw their revenues collapse and could not pay the costs necessary to sustain their businesses and livelihood.

                                                                                                                            The US government then came up with various programs to distribute money to these struggling businesses and individuals. Unfortunately, the government did not have this money to distribute.

                                                                                                                            As we all learned in political science 101, the source of any government funds, of course, comes from its citizens, but in this case, citizens and businesses were reeling from the government’s shutdown of the economy and hence had no money.

                                                                                                                            The US government had to borrow money

                                                                                                                            So the only choice the government had was to borrow money. But the US Treasury department could not borrow from the population as citizens were in dire straits. Usually, the US government would be able to borrow from foreigners; however, as other countries were suffering and for various geopolitical reasons, foreigners didn’t buy much US government debt.

                                                                                                                            In fact, in 2014, foreigners owned US$6.2trn of US Treasury Department bonds; five years later, in 2019, they only held slightly more at US$6.8trn. Throughout the crisis, the US Treasury Department could only get about one trillion dollars of foreign money to buy US Treasuries.

                                                                                                                            The US government needed trillions of dollars

                                                                                                                            But the US government needed a lot more money than that. In fact, between the end of 2019 and the end of 2021, the US government borrowed US$6.4trn, causing total US government debt to rise to US$29.6trn by the end of 2021, 122% of GDP.

                                                                                                                            So, the US government needed US$6.4trn and couldn’t get it from taxpayers or businesses at that time, so where did they get it? As I mentioned earlier, they got about US$1trn of it from foreign investors, which left a US$5.4trn hold.

                                                                                                                            In 2020/21, the Fed stepped in and lent money to the US Treasury

                                                                                                                            The solution was for the Federal Reserve to step in and lend the money to the US Treasury. Now the Fed is not allowed to buy bonds directly from the US Treasury, so the largest banks bought these bonds and then offloaded most of them to the Fed. The total assets of the Fed grew from US$4.6trn at the end of 2019 to US$8.8trn by the end of 2021, a US$4.2trn increase.

                                                                                                                            To put this into perspective, from 2020 to 2021, the US government spent US$12trn and took in taxes of US$5.1trn.

                                                                                                                            This massive injection of money raised deposits

                                                                                                                            This massive injection of money resulted in deposits of individuals and companies at US banks increasing by US$4.7trn during 2020 and 2021. The banks put about half of that money, or about US$2.2trn, into cash. About a third of those deposits, or US$1.6trn, went into securities at a time when interest rates were close to zero. In 2020 US 10-year Treasury bonds yielded about 0.9%, and it was about 1.5% in 2021.

                                                                                                                            Banks receive short-term deposits and lend long-term

                                                                                                                            Banks generally receive short-term deposits and lend that to companies on a long-term basis. But in 2020 and 2021, there was enough concern about the economy that banks didn’t lend much. Instead, they put that money into cash and securities.

                                                                                                                            In 2020 the Fed and the Treasury Department intervened and bought bonds

                                                                                                                            It’s worth noting that during March 2020, the price of bonds, especially high-risk ones, started crashing as investors started to doubt if companies could repay those bonds given the state of the economy.

                                                                                                                            The Fed and the Treasury Department devised a scheme to save the bond market by announcing that they would hire Blackrock to help them buy bonds in the market to support bond prices. This was unprecedented and could have been seen as violating the letter of the law, which generally prevents the Fed from buying bonds in the open market.

                                                                                                                            The prior main Fed intervention was after the 2008 crisis when the Fed bought US Treasuries and Mortgage-backed securities through its Quantitative Easing Program.

                                                                                                                            Silicon Valley Bank faced a boom and bust cycle in Tech

                                                                                                                            Silicon Valley Bank (SVB) appeared to be overexposed to the Tech sector and the startup community. This was not a problem when things were riding high for them. In fact, SVB took in lots of deposits from the above-described government stimulus, the IPOs, and the profitable period of 2021.

                                                                                                                            But when these types of companies started to experience a slowdown, they saw their market caps collapse and their profitability weaken. This meant that these companies started to have more of a need for the funds they had deposited at SVB.

                                                                                                                            The Fed started increasing interest rates, and bond values fell by 10-30%

                                                                                                                            Then the Fed started increasing interest rates on February 2022, and by one year later, they had moved rates up by 4.5% sending shock waves through the economy.

                                                                                                                            This rise in interest rates meant that all the bonds the banks held became worth 10-30% less than what they paid for them. The government allows a bank to avoid showing those unrealized losses by classifying those bonds as “held-to-maturity,” which the banks were likely to do with them.

                                                                                                                            Silicon Valley Bank started withdrawing deposits

                                                                                                                            However, what happened with SVB was that its customers started withdrawing deposits, which forced the bank to sell those “held-to-maturity” bonds to raise the cash needed to repay the deposits. This forced the banks to make their unrealized losses real.

                                                                                                                            Very quickly, this wiped out SVB’s capital, and the bank had to be taken control of by the Federal Deposit Insurance Corporation (FDIC), which resolves such types of cases.

                                                                                                                            “Strengthening public confidence in our banking system”

                                                                                                                            On March 12th, the Fed announced a Joint Statement with the Treasury and the FDIC to “Protect the US economy by strengthening public confidence in our banking system.” In it, they stated that depositors at SVB in California would have access to all of their money starting Monday, March 13th, and that the taxpayer would bear no losses associated with the resolution of Silicon Valley Bank.

                                                                                                                            Enter Barney Frank (you can’t make this sh*t up)

                                                                                                                            Fed, the Treasury, and FDIC announced the same for Signature Bank in New York, which was also going bust. The irony is that the guy at the center of passing the well-intentioned post-2008 bank legislation, Barney Frank, was a board member of Signature since 2015.

                                                                                                                            Frank was a long-time congressman from Massachusetts and, to quote from the bank’s website, “was instrumental in crafting the short-term US$550 billion rescue plan in response to the nation’s 2008-2009 financial crisis. Later, he co-sponsored the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was signed into law in July 2010.”

                                                                                                                            Dodd-Frank created the too-big-to-fail storyline

                                                                                                                            That act created the Financial Stability Oversight Council and the Office of Financial Research to identify threats to the financial stability of the United States and gave the Federal Reserve new powers to regulate systemically important institutions. This codified the too-big-to-fail storyline, which helped the largest banks gain protection from the US government. The irony, in this case, is rich.

                                                                                                                            President Biden repeats that no taxpayer funds will be used (spoiler alert: it’s nonsense)

                                                                                                                            The Fed, the Treasury, and FDIC statement clarified that shareholders and certain unsecured debtholders would not be protected, senior management was removed, and any losses to the Deposit Insurance Fund to support uninsured depositors would be recovered by a special assessment on banks, as required by law.

                                                                                                                            The announcement from this trio that was repeated by President Biden claimed that no taxpayer funds will be used. Which we all know is nonsense because all government funds ultimately come from the taxpayers. They will claim that these funds come from other banks, but we know that any bank or business must pass on increased government-regulatory costs.

                                                                                                                            The Bank Term Funding Program (BTFP) to guarantee banks don’t lose on bonds

                                                                                                                            Finally, the Federal Reserve Board on Sunday announced it will make available additional funding to eligible depository institutions to help assure banks can meet the needs of all their depositors.

                                                                                                                            They called this the Bank Term Funding Program (BTFP), which will offer loans of up to one year to any US federally insured depository institution pledging US Treasuries, agency debt and mortgage-backed securities, and other qualifying assets as collateral as long as that collateral was owned as of March 12th, 2023.

                                                                                                                            The key to this measure is that these assets will be valued at par, allowing these banks to avoid offloading those securities at a loss. They announced that using the Exchange Stabilization Fund, the Department of the Treasury would provide US$25 billion as credit protection to the Federal Reserve Banks in connection with the Program.

                                                                                                                            The government is worried about bank runs

                                                                                                                            This hints that the government is worried that depositors at smaller banks will attempt to withdraw their deposits and that this Program will prevent that bank from...]]>The Silicon Valley Bank crisis started when the US government shut down its economy

                                                                                                                            The Silicon Valley Bank crisis started when the US government shut down the economy from 2020 to 2021.

                                                                                                                            Let’s take a step back to January 29th, 2020, when President Donald Trump announced a White House Coronavirus Response task force with the director of the National Institute of Allergy and Infectious Diseases, Anthony Fauci, and Deborah Brix as coordinator.

                                                                                                                            The decision to shut down the economy originated from this body but was ultimately implemented by President Trump, members of congress, and eventually President Joe Biden. This decision was truly the worst decision I have ever seen a government make in my lifetime.

                                                                                                                            Businesses and individuals saw their income collapse

                                                                                                                            During that time, businesses and individuals saw their revenues collapse and could not pay the costs necessary to sustain their businesses and livelihood.

                                                                                                                            The US government then came up with various programs to distribute money to these struggling businesses and individuals. Unfortunately, the government did not have this money to distribute.

                                                                                                                            As we all learned in political science 101, the source of any government funds, of course, comes from its citizens, but in this case, citizens and businesses were reeling from the government’s shutdown of the economy and hence had no money.

                                                                                                                            The US government had to borrow money

                                                                                                                            So the only choice the government had was to borrow money. But the US Treasury department could not borrow from the population as citizens were in dire straits. Usually, the US government would be able to borrow from foreigners; however, as other countries were suffering and for various geopolitical reasons, foreigners didn’t buy much US government debt.

                                                                                                                            In fact, in 2014, foreigners owned US$6.2trn of US Treasury Department bonds; five years later, in 2019, they only held slightly more at US$6.8trn. Throughout the crisis, the US Treasury Department could only get about one trillion dollars of foreign money to buy US Treasuries.

                                                                                                                            The US government needed trillions of dollars

                                                                                                                            But the US government needed a lot more money than that. In fact, between the end of 2019 and the end of 2021, the US government borrowed US$6.4trn, causing total US government debt to rise to US$29.6trn by the end of 2021, 122% of GDP.

                                                                                                                            So, the US government needed US$6.4trn and couldn’t get it from taxpayers or businesses at that time, so where did they get it? As I mentioned earlier, they got about US$1trn of it from foreign investors, which left a US$5.4trn hold.

                                                                                                                            In 2020/21, the Fed stepped in and lent money to the US Treasury

                                                                                                                            The solution was for the Federal Reserve to step in and lend the money to the US Treasury. Now the Fed is not allowed to buy bonds directly from the US Treasury, so the largest banks bought these bonds and then offloaded most of them to the Fed. The total assets of the Fed grew from US$4.6trn at the end of 2019 to US$8.8trn by the end of 2021, a US$4.2trn increase.

                                                                                                                            To put this into perspective, from 2020 to 2021, the US government spent US$12trn and took in taxes of US$5.1trn.

                                                                                                                            This massive injection of money raised deposits

                                                                                                                            This massive injection of money resulted in deposits of individuals and companies at US banks increasing by US$4.7trn during 2020 and 2021. The banks put about half of that money, or about US$2.2trn, into cash. About a third of those deposits, or US$1.6trn, went into securities at a time when interest rates were close to zero. In 2020 US 10-year Treasury bonds yielded about 0.9%, and it was about 1.5% in 2021.

                                                                                                                            Banks receive short-term deposits and lend long-term

                                                                                                                            Banks generally receive short-term deposits and lend that to companies on a long-term basis. But in 2020 and 2021, there was enough concern about the economy that banks didn’t lend much. Instead, they put that money into cash and securities.

                                                                                                                            In 2020 the Fed and the Treasury Department intervened and bought bonds

                                                                                                                            It’s worth noting that during March 2020, the price of bonds, especially high-risk ones, started crashing as investors started to doubt if companies could repay those bonds given the state of the economy.

                                                                                                                            The Fed and the Treasury Department devised a scheme to save the bond market by announcing that they would hire Blackrock to help them buy bonds in the market to support bond prices. This was unprecedented and could have been seen as violating the letter of the law, which generally prevents the Fed from buying bonds in the open market.

                                                                                                                            The prior main Fed intervention was after the 2008 crisis when the Fed bought US Treasuries and Mortgage-backed securities through its Quantitative Easing Program.

                                                                                                                            Silicon Valley Bank faced a boom and bust cycle in Tech

                                                                                                                            Silicon Valley Bank (SVB) appeared to be overexposed to the Tech sector and the startup community. This was not a problem when things were riding high for them. In fact, SVB took in lots of deposits from the above-described government stimulus, the IPOs, and the profitable period of 2021.

                                                                                                                            But when these types of companies started to experience a slowdown, they saw their market caps collapse and their profitability weaken. This meant that these companies started to have more of a need for the funds they had deposited at SVB.

                                                                                                                            The Fed started increasing interest rates, and bond values fell by 10-30%

                                                                                                                            Then the Fed started increasing interest rates on February 2022, and by one year later, they had moved rates up by 4.5% sending shock waves through the economy.

                                                                                                                            This rise in interest rates meant that all the bonds the banks held became worth 10-30% less than what they paid for them. The government allows a bank to avoid showing those unrealized losses by classifying those bonds as “held-to-maturity,” which the banks were likely to do with them.

                                                                                                                            Silicon Valley Bank started withdrawing deposits

                                                                                                                            However, what happened with SVB was that its customers started withdrawing deposits, which forced the bank to sell those “held-to-maturity” bonds to raise the cash needed to repay the deposits. This forced the banks to make their unrealized losses real.

                                                                                                                            Very quickly, this wiped out SVB’s capital, and the bank had to be taken control of by the Federal Deposit Insurance Corporation (FDIC), which resolves such types of cases.

                                                                                                                            “Strengthening public confidence in our banking system”

                                                                                                                            On March 12th, the Fed announced a Joint Statement with the Treasury and the FDIC to “Protect the US economy by strengthening public confidence in our banking system.” In it, they stated that depositors at SVB in California would have access to all of their money starting Monday, March 13th, and that the taxpayer would bear no losses associated with the resolution of Silicon Valley Bank.

                                                                                                                            Enter Barney Frank (you can’t make this sh*t up)

                                                                                                                            Fed, the Treasury, and FDIC announced the same for Signature Bank in New York, which was also going bust. The irony is that the guy at the center of passing the well-intentioned post-2008 bank legislation, Barney Frank, was a board member of Signature since 2015.

                                                                                                                            Frank was a long-time congressman from Massachusetts and, to quote from the bank’s website, “was instrumental in crafting the short-term US$550 billion rescue plan in response to the nation’s 2008-2009 financial crisis. Later, he co-sponsored the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was signed into law in July 2010.”

                                                                                                                            Dodd-Frank created the too-big-to-fail storyline

                                                                                                                            That act created the Financial Stability Oversight Council and the Office of Financial Research to identify threats to the financial stability of the United States and gave the Federal Reserve new powers to regulate systemically important institutions. This codified the too-big-to-fail storyline, which helped the largest banks gain protection from the US government. The irony, in this case, is rich.

                                                                                                                            President Biden repeats that no taxpayer funds will be used (spoiler alert: it’s nonsense)

                                                                                                                            The Fed, the Treasury, and FDIC statement clarified that shareholders and certain unsecured debtholders would not be protected, senior management was removed, and any losses to the Deposit Insurance Fund to support uninsured depositors would be recovered by a special assessment on banks, as required by law.

                                                                                                                            The announcement from this trio that was repeated by President Biden claimed that no taxpayer funds will be used. Which we all know is nonsense because all government funds ultimately come from the taxpayers. They will claim that these funds come from other banks, but we know that any bank or business must pass on increased government-regulatory costs.

                                                                                                                            The Bank Term Funding Program (BTFP) to guarantee banks don’t lose on bonds

                                                                                                                            Finally, the Federal Reserve Board on Sunday announced it will make available additional funding to eligible depository institutions to help assure banks can meet the needs of all their depositors.

                                                                                                                            They called this the Bank Term Funding Program (BTFP), which will offer loans of up to one year to any US federally insured depository institution pledging US Treasuries, agency debt and mortgage-backed securities, and other qualifying assets as collateral as long as that collateral was owned as of March 12th, 2023.

                                                                                                                            The key to this measure is that these assets will be valued at par, allowing these banks to avoid offloading those securities at a loss. They announced that using the Exchange Stabilization Fund, the Department of the Treasury would provide US$25 billion as credit protection to the Federal Reserve Banks in connection with the Program.

                                                                                                                            The government is worried about bank runs

                                                                                                                            This hints that the government is worried that depositors at smaller banks will attempt to withdraw their deposits and that this Program will prevent that bank from experiencing the losses that Silicon Valley Bank experienced. Another way to think of this is that if this measure had been implemented one week prior, Silicon Valley Bank would not have gone bust.

                                                                                                                            This is another well-intentioned intervention by the government into the banking system. It is meant to stabilize things, and it likely will. But it also raises moral hazard in the banking sector and prevents poorly managed banks from suffering from their bad policies, which brings me to bad policies.

                                                                                                                            Silicon Valley Bank had bad policies

                                                                                                                            SVB had a simple solution to the dilemma they faced of having a massive amount of short-term deposits, which they invested into long-term government bonds. They could have implemented basic risk management measures such as interest rate swaps to protect the bank against rising interest rates. But, unlike well-run banks, they didn’t do this.

                                                                                                                            Government intervention is not a part of capitalism

                                                                                                                            It’s important to remember that government intervention is not a part of capitalism. Instead, it is a policy that politicians and people feel is the right thing to do when things don’t turn out the way they were planned. The problem with government intervention is that it causes unintended consequences.

                                                                                                                            The economist Milton Friedman famously said:

                                                                                                                            “One of the great mistakes is to judge [government] policies and programs by their intentions rather than their results.”

                                                                                                                            Let’s review the US government’s policies over the past few decades.

                                                                                                                            • The government pushed FANNIE MAE and FREDDIE MAC to achieve extremely affordable housing goals, which substantially reduced the quality of housing loans in America and brought millions more into the housing market, leading to the 2007 peak of the housing market and the subsequent bust.
                                                                                                                            • The Fed lowered interest rates to near zero in 2008/9 and kept them close to that for more than a decade.
                                                                                                                            • The Fed started Quantitative Easing in 2008, buying assets from the banks and injecting liquidity into the market.
                                                                                                                            • The government bailed out the US banks and failed to prosecute any major bankers for malfeasance.
                                                                                                                            • In 2020 and 2021, The US government shut down the US economy, cut interest rates, and the Fed and the US Treasury injected more money than ever imagined into the economy.
                                                                                                                            • In 2020 the Fed and the Treasury, for the first time, bought bonds in the bond market to prevent bond prices from crashing.
                                                                                                                            • In 2022 the Fed went on a 12-month rampage of rising rates, bringing rates from nearly zero to close to 5%. This was the fastest rate hike seen in my lifetime, and at the time, we have repeated what is likely to break something in the economy.
                                                                                                                            • And something did break at SVB and in the banking sector. And now, once again, the government has intervened in the bond market by announcing that it will buy bonds of banks facing losses on those bonds to prevent them from facing massive losses and going bust.
                                                                                                                            
                                                                                                                            

                                                                                                                            Government programs always come with unintended consequences

                                                                                                                            As I wrap up, I want to highlight that government programs always come with unintended consequences. Political leaders meddle in the economy and with capitalism with the best of intentions but slowly and steadily march toward more dangerous places.

                                                                                                                            Silicon Valley Bank and Signature Bank, interestingly both from Democrat-controlled states, depositors will get their money back, and other regional banks will survive the rush to the withdrawal of deposits and move them to the larger banks. But at what cost?

                                                                                                                            There is now more risk in the banking system because of more moral hazard

                                                                                                                            As we speak, a large amount of deposits is likely moving to the largest banks, strengthening their leadership position.

                                                                                                                            It’s quite possible that this will not seriously damage the banking industry and bank funds or ETFs, as many of them are concentrated in the large banks that could be gaining from this.

                                                                                                                            But in the end, government intervention in the banking sector just takes it further away from capitalism and brings new risks.

                                                                                                                             

                                                                                                                            Andrew’s books

                                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                            • My Worst Investment Ever
                                                                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                            
                                                                                                                            

                                                                                                                            Andrew’s online programs

                                                                                                                            • Valuation Master Class
                                                                                                                            • The Become a Better Investor Community
                                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                            • Finance Made Ridiculously Simple
                                                                                                                            • FVMR Investing: Quantamental Investing Across the World
                                                                                                                            • Become a Great Presenter and Increase Your Influence
                                                                                                                            • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                            • Achieve Your Goals
                                                                                                                            
                                                                                                                            

                                                                                                                            Connect with Andrew Stotz:

                                                                                                                            • astotz.com
                                                                                                                            • LinkedIn
                                                                                                                            • Facebook
                                                                                                                            • Instagram
                                                                                                                            • Twitter
                                                                                                                            • YouTube
                                                                                                                            • My Worst Investment Ever Podcast
                                                                                                                            
                                                                                                                            ]]>70bc721a-4dc4-43ab-85e6-5cb5ce1943dcThu, 16 Mar 2023 06:00:00 +070025:58falsefullThe Silicon Valley Bank crisis started when the US government shut down its economyDave Collum – What Should the US Be Doing in Ukraine?BIO: Dave Collum is a professor of Organic Chemistry at Cornell University who developed an interest in markets, which, in turn, led to an interest in geopolitics.

                                                                                                                            STORY: Dave talks about his 2022 Year in Review: All Roads Lead to Ukraine.

                                                                                                                            LEARNING: Never trust politicians and bureaucrats.

                                                                                                                             

                                                                                                                            “The more the fact-checkers, the more likely the thing they’re checking is true.”

                                                                                                                            Dave Collum

                                                                                                                             

                                                                                                                            Guest profile

                                                                                                                            Dave Collum is a professor of Organic Chemistry at Cornell University who developed an interest in markets, which, in turn, led to an interest in geopolitics. He enjoys the human folly of it all. He has a natural predilection for being contrarian, which makes him a “denier” on almost all hot topics.

                                                                                                                            2022 Year in Review: All Roads Lead to Ukraine

                                                                                                                            Given his interest in geopolitics, Dave has strong opinions about many things. For him, it’s a natural thing to go against everybody. Today, we’ll not talk about his worst investment ever but rather hear more about his 2022 Year in Review: All Roads Lead to Ukraine.

                                                                                                                            Every year, Dave writes an annual survey of what is happening in the world. The reviews started as a handful of pages for friends and family on a simple website, and then it just got bigger. One year he decided to do a serious job. Now every year has gotten bigger and bolder. Dave has a friend who’s binding all the views so he can sell them all on Amazon.

                                                                                                                            Every year, Dave writes about human folly. In his 2022 review, his primary focus was Ukraine. In his true controversial nature, he took the pro-Putin stance. Dave says he can easily make the case that NATO is bad.

                                                                                                                            Dave argues that Putin is making incredibly rational moves and believes that NATO could have stopped the war but chose not to. He gets pretty troubled to watch people become self-righteous about Ukraine while the US is no victim. Going back in history, Dave says the US has bombed more countries than Russia over the last 20 years. The government has also killed more people with military weapons in the previous 20 years. People want to talk about the Ukraine war while ignoring that the US gave weapons to the Saudis to bomb the Yemenis into oblivion. Or the fact that last year, the US bombed Syria three times to send a message to Tehran. In Dave’s opinion, that should be a war crime.

                                                                                                                            Dave predicts that the war in Ukraine will end soon. A Twitter poll he did shows that people are tired of the war and no longer support it. To end the war, the US must stop sending money and weapons to Ukraine.

                                                                                                                            Go to Peak Prosperity to read Dave’s full honest review.

                                                                                                                            Andrew’s takeaways

                                                                                                                            • Andrew has three guiding principles:
                                                                                                                            • Never trust politicians.
                                                                                                                            • Never trust bureaucrats just like that. They’ve got to earn your trust.
                                                                                                                            • The majority of people follow politics blindly.
                                                                                                                            • Andrew believes that to really see a change in society, you’ve got to effect that change through the political system and apply that across all boards.
                                                                                                                            
                                                                                                                            

                                                                                                                             

                                                                                                                            [spp-transcript]

                                                                                                                             

                                                                                                                            Connect with Dave Collum

                                                                                                                            • LinkedIn
                                                                                                                            • Twitter
                                                                                                                            • Blog
                                                                                                                            
                                                                                                                            

                                                                                                                            Andrew’s books

                                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                            • My Worst Investment Ever
                                                                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                            
                                                                                                                            

                                                                                                                            Andrew’s online programs

                                                                                                                            • Valuation Master Class
                                                                                                                            • The Become a Better Investor Community
                                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                            • Finance Made Ridiculously Simple
                                                                                                                            • FVMR Investing: Quantamental Investing Across the World
                                                                                                                            • Become a Great Presenter and Increase Your Influence
                                                                                                                            • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                            • Achieve Your Goals
                                                                                                                            
                                                                                                                            

                                                                                                                            Connect with Andrew Stotz:

                                                                                                                            • astotz.com
                                                                                                                            • LinkedIn
                                                                                                                            • Facebook
                                                                                                                            • Instagram
                                                                                                                            • Twitter
                                                                                                                            • YouTube
                                                                                                                            • My Worst Investment Ever Podcast
                                                                                                                            
                                                                                                                            ]]>BIO: Dave Collum is a professor of Organic Chemistry at Cornell University who developed an interest in markets, which, in turn, led to an interest in geopolitics.

                                                                                                                            STORY: Dave talks about his 2022 Year in Review: All Roads Lead to Ukraine.

                                                                                                                            LEARNING: Never trust politicians and bureaucrats.

                                                                                                                             

                                                                                                                            “The more the fact-checkers, the more likely the thing they’re checking is true.”

                                                                                                                            Dave Collum

                                                                                                                             

                                                                                                                            Guest profile

                                                                                                                            Dave Collum is a professor of Organic Chemistry at Cornell University who developed an interest in markets, which, in turn, led to an interest in geopolitics. He enjoys the human folly of it all. He has a natural predilection for being contrarian, which makes him a “denier” on almost all hot topics.

                                                                                                                            2022 Year in Review: All Roads Lead to Ukraine

                                                                                                                            Given his interest in geopolitics, Dave has strong opinions about many things. For him, it’s a natural thing to go against everybody. Today, we’ll not talk about his worst investment ever but rather hear more about his 2022 Year in Review: All Roads Lead to Ukraine.

                                                                                                                            Every year, Dave writes an annual survey of what is happening in the world. The reviews started as a handful of pages for friends and family on a simple website, and then it just got bigger. One year he decided to do a serious job. Now every year has gotten bigger and bolder. Dave has a friend who’s binding all the views so he can sell them all on Amazon.

                                                                                                                            Every year, Dave writes about human folly. In his 2022 review, his primary focus was Ukraine. In his true controversial nature, he took the pro-Putin stance. Dave says he can easily make the case that NATO is bad.

                                                                                                                            Dave argues that Putin is making incredibly rational moves and believes that NATO could have stopped the war but chose not to. He gets pretty troubled to watch people become self-righteous about Ukraine while the US is no victim. Going back in history, Dave says the US has bombed more countries than Russia over the last 20 years. The government has also killed more people with military weapons in the previous 20 years. People want to talk about the Ukraine war while ignoring that the US gave weapons to the Saudis to bomb the Yemenis into oblivion. Or the fact that last year, the US bombed Syria three times to send a message to Tehran. In Dave’s opinion, that should be a war crime.

                                                                                                                            Dave predicts that the war in Ukraine will end soon. A Twitter poll he did shows that people are tired of the war and no longer support it. To end the war, the US must stop sending money and weapons to Ukraine.

                                                                                                                            Go to Peak Prosperity to read Dave’s full honest review.

                                                                                                                            Andrew’s takeaways

                                                                                                                            • Andrew has three guiding principles:
                                                                                                                            • Never trust politicians.
                                                                                                                            • Never trust bureaucrats just like that. They’ve got to earn your trust.
                                                                                                                            • The majority of people follow politics blindly.
                                                                                                                            • Andrew believes that to really see a change in society, you’ve got to effect that change through the political system and apply that across all boards.
                                                                                                                            
                                                                                                                            

                                                                                                                             

                                                                                                                            [spp-transcript]

                                                                                                                             

                                                                                                                            Connect with Dave Collum

                                                                                                                            • LinkedIn
                                                                                                                            • Twitter
                                                                                                                            • Blog
                                                                                                                            
                                                                                                                            

                                                                                                                            Andrew’s books

                                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                            • My Worst Investment Ever
                                                                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                            
                                                                                                                            

                                                                                                                            Andrew’s online programs

                                                                                                                            • Valuation Master Class
                                                                                                                            • The Become a Better Investor Community
                                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                            • Finance Made Ridiculously Simple
                                                                                                                            • FVMR Investing: Quantamental Investing Across the World
                                                                                                                            • Become a Great Presenter and Increase Your Influence
                                                                                                                            • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                            • Achieve Your Goals
                                                                                                                            
                                                                                                                            

                                                                                                                            Connect with Andrew Stotz:

                                                                                                                            • astotz.com
                                                                                                                            • LinkedIn
                                                                                                                            • Facebook
                                                                                                                            • Instagram
                                                                                                                            • Twitter
                                                                                                                            • YouTube
                                                                                                                            • My Worst Investment Ever Podcast
                                                                                                                            
                                                                                                                            ]]>2c1b2a32-ebad-4ff8-b8f4-fca2a68eed88Thu, 16 Mar 2023 06:00:00 +070038:56falsefullDave Collum is a professor of Organic Chemistry at Cornell University who developed an interest in markets, which, in turn, led to an interest in geopolitics.Bill Blain – Always Sell Fast in a Difficult MarketBIO: Bill Blain is a well-known financier and commentator on financial markets, contributor, and editor of the Morning Porridge.

                                                                                                                            STORY: Bill loves airships, and many of his investment mistakes involve airships.

                                                                                                                            LEARNING: Ignore the worst and the best estimates and focus on the middle consensus. In a difficult market, a bid is a bid, and you’ve got to sell fast.

                                                                                                                             

                                                                                                                            “The market has one objective only; to inflict the maximum amount of pain on the maximum number of participants.”

                                                                                                                            Bill Blain

                                                                                                                             

                                                                                                                            Guest profile

                                                                                                                            Bill Blain is a well-known financier and commentator on financial markets, contributor, and editor of the Morning Porridge. His day job combines his role as Strategist for Shard Capital, the leading investment management firm, and heading the firm’s Alternatives Group – financing Private debt and equity deals and direct lending transactions. His clients include sovereign wealth funds, hedge funds, insurance and pension managers, credit funds, and family offices.

                                                                                                                            Worst investment ever

                                                                                                                            Bill absolutely loves airships, and many of his investment mistakes—unsurprisingly—involve airships. When Bill was relatively young, he discussed with his grandfather about going to Dundee. He told him about reading about it and his interest in airships. Bill’s grandfather encouraged him to invest in that airship. Billy took his grandfather’s advice and put his pocket money into the airship company. He lost all his money when the company folded a year later.

                                                                                                                            A few years later, as a young banker again, the airship industry came up, and Bill thought investing in it would work this time. So invested and lost a lot.

                                                                                                                            About 10 years ago, there was yet another airship. Bill tried to invest in it, but somebody else beat him to the race since it was a private equity deal. The guy who beat him in the bid lost all their money.

                                                                                                                            Over time, Bill has also made other poor investment decisions, like buying UK bank stocks just before Northern Rock went into meltdown. He also once did lots of serious analysis and market research and concluded that all the world’s growth would be in Southeast Asia. So he piled into Chinese stocks a couple of days before Ali Baba and Tencent were closed down.

                                                                                                                            Another big mistake Bill made was with Tesla. He learned about Tesla very early on and thought it was interesting. He even invested in it. But his confidence in the stock evaporated because he let it get personal.

                                                                                                                            Bill was distraught by the behavior of Elon Musk, particularly his attitude towards a British cave diver trying to rescue children stuck in a cave in Thailand. He felt the way Elon treated that diver, accusing him of being a pedophile, was unforgivable. So Bill decided to exit Tesla at that point. He decided for all the right moral reasons, and it cost him millions in the foregone upside that he would have made if he had held on to the stock.

                                                                                                                            Lessons learned

                                                                                                                            • Markets are not clever themselves. They’re not artificial intelligence. All they are is a voting machine.
                                                                                                                            • The market has one objective; to inflict the maximum amount of pain on the maximum number of participants.
                                                                                                                            • Things are never as bad as you fear but seldom as good as you hope.
                                                                                                                            • Ignore the worst and the best estimates and focus on the middle consensus.
                                                                                                                            • In a difficult market, a bid is a bid, and you got to sell fast.
                                                                                                                            
                                                                                                                            

                                                                                                                            Bill’s recommendations

                                                                                                                            According to Bill, a phone is the best resource for understanding what’s happening in markets and what you should do. Bill recommends calling people, speaking to them, and asking their opinions.

                                                                                                                            No.1 goal for the next 12 months

                                                                                                                            Bill’s number one goal for the next 12 months is to go skiing and spend much of the summer sailing his boat with his wife and puppy. And if his kids also come along, it will be even better.

                                                                                                                            Parting words

                                                                                                                             

                                                                                                                            “Eat the beans, cool the pie, and eat that porridge.”

                                                                                                                            Bill Blain

                                                                                                                             

                                                                                                                            [spp-transcript]

                                                                                                                             

                                                                                                                            Connect with Bill Blain

                                                                                                                            • LinkedIn
                                                                                                                            • Twitter
                                                                                                                            • Website
                                                                                                                            
                                                                                                                            

                                                                                                                            Andrew’s books

                                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                            • My Worst Investment Ever
                                                                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                            
                                                                                                                            

                                                                                                                            Andrew’s online programs

                                                                                                                            • Valuation Master Class
                                                                                                                            • The Become a Better Investor Community
                                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                            • Finance Made Ridiculously Simple
                                                                                                                            • FVMR Investing: Quantamental Investing Across the World
                                                                                                                            • Become a Great Presenter and Increase Your Influence
                                                                                                                            • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                            • Achieve Your Goals
                                                                                                                            
                                                                                                                            

                                                                                                                            Connect with Andrew Stotz:

                                                                                                                            • astotz.com
                                                                                                                            • LinkedIn
                                                                                                                            • Facebook
                                                                                                                            • Instagram
                                                                                                                            • Twitter
                                                                                                                            • YouTube
                                                                                                                            • My Worst Investment Ever Podcast
                                                                                                                            
                                                                                                                            ]]>BIO: Bill Blain is a well-known financier and commentator on financial markets, contributor, and editor of the Morning Porridge.

                                                                                                                            STORY: Bill loves airships, and many of his investment mistakes involve airships.

                                                                                                                            LEARNING: Ignore the worst and the best estimates and focus on the middle consensus. In a difficult market, a bid is a bid, and you’ve got to sell fast.

                                                                                                                             

                                                                                                                            “The market has one objective only; to inflict the maximum amount of pain on the maximum number of participants.”

                                                                                                                            Bill Blain

                                                                                                                             

                                                                                                                            Guest profile

                                                                                                                            Bill Blain is a well-known financier and commentator on financial markets, contributor, and editor of the Morning Porridge. His day job combines his role as Strategist for Shard Capital, the leading investment management firm, and heading the firm’s Alternatives Group – financing Private debt and equity deals and direct lending transactions. His clients include sovereign wealth funds, hedge funds, insurance and pension managers, credit funds, and family offices.

                                                                                                                            Worst investment ever

                                                                                                                            Bill absolutely loves airships, and many of his investment mistakes—unsurprisingly—involve airships. When Bill was relatively young, he discussed with his grandfather about going to Dundee. He told him about reading about it and his interest in airships. Bill’s grandfather encouraged him to invest in that airship. Billy took his grandfather’s advice and put his pocket money into the airship company. He lost all his money when the company folded a year later.

                                                                                                                            A few years later, as a young banker again, the airship industry came up, and Bill thought investing in it would work this time. So invested and lost a lot.

                                                                                                                            About 10 years ago, there was yet another airship. Bill tried to invest in it, but somebody else beat him to the race since it was a private equity deal. The guy who beat him in the bid lost all their money.

                                                                                                                            Over time, Bill has also made other poor investment decisions, like buying UK bank stocks just before Northern Rock went into meltdown. He also once did lots of serious analysis and market research and concluded that all the world’s growth would be in Southeast Asia. So he piled into Chinese stocks a couple of days before Ali Baba and Tencent were closed down.

                                                                                                                            Another big mistake Bill made was with Tesla. He learned about Tesla very early on and thought it was interesting. He even invested in it. But his confidence in the stock evaporated because he let it get personal.

                                                                                                                            Bill was distraught by the behavior of Elon Musk, particularly his attitude towards a British cave diver trying to rescue children stuck in a cave in Thailand. He felt the way Elon treated that diver, accusing him of being a pedophile, was unforgivable. So Bill decided to exit Tesla at that point. He decided for all the right moral reasons, and it cost him millions in the foregone upside that he would have made if he had held on to the stock.

                                                                                                                            Lessons learned

                                                                                                                            • Markets are not clever themselves. They’re not artificial intelligence. All they are is a voting machine.
                                                                                                                            • The market has one objective; to inflict the maximum amount of pain on the maximum number of participants.
                                                                                                                            • Things are never as bad as you fear but seldom as good as you hope.
                                                                                                                            • Ignore the worst and the best estimates and focus on the middle consensus.
                                                                                                                            • In a difficult market, a bid is a bid, and you got to sell fast.
                                                                                                                            
                                                                                                                            

                                                                                                                            Bill’s recommendations

                                                                                                                            According to Bill, a phone is the best resource for understanding what’s happening in markets and what you should do. Bill recommends calling people, speaking to them, and asking their opinions.

                                                                                                                            No.1 goal for the next 12 months

                                                                                                                            Bill’s number one goal for the next 12 months is to go skiing and spend much of the summer sailing his boat with his wife and puppy. And if his kids also come along, it will be even better.

                                                                                                                            Parting words

                                                                                                                             

                                                                                                                            “Eat the beans, cool the pie, and eat that porridge.”

                                                                                                                            Bill Blain

                                                                                                                             

                                                                                                                            [spp-transcript]

                                                                                                                             

                                                                                                                            Connect with Bill Blain

                                                                                                                            • LinkedIn
                                                                                                                            • Twitter
                                                                                                                            • Website
                                                                                                                            
                                                                                                                            

                                                                                                                            Andrew’s books

                                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                            • My Worst Investment Ever
                                                                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                            
                                                                                                                            

                                                                                                                            Andrew’s online programs

                                                                                                                            • Valuation Master Class
                                                                                                                            • The Become a Better Investor Community
                                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                            • Finance Made Ridiculously Simple
                                                                                                                            • FVMR Investing: Quantamental Investing Across the World
                                                                                                                            • Become a Great Presenter and Increase Your Influence
                                                                                                                            • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                            • Achieve Your Goals
                                                                                                                            
                                                                                                                            

                                                                                                                            Connect with Andrew Stotz:

                                                                                                                            • astotz.com
                                                                                                                            • LinkedIn
                                                                                                                            • Facebook
                                                                                                                            • Instagram
                                                                                                                            • Twitter
                                                                                                                            • YouTube
                                                                                                                            • My Worst Investment Ever Podcast
                                                                                                                            
                                                                                                                            ]]>d71bf2dc-b709-432a-b981-98b0c0d2e797Wed, 15 Mar 2023 06:00:00 +070028:38falsefullBill Blain is a well-known financier and commentator on financial markets, contributor, and editor of the Morning Porridge.Jeroen Blokland – Know the Actual Business Outlook Before InvestingBIO: Jeroen Blokland is a long-term multi-asset investor with a long-term track record in financial markets. Jeroen worked at Robeco, the largest independent asset manager in The Netherlands, for almost 20 years before launching his independent investment research company, True Insights.

                                                                                                                            STORY: Jeroen’s first investment was in a Dutch company selling PCs. He barely did any research or due diligence. The company reported a loss of $27 million in the same year Jeroen invested. It later went bankrupt, leaving Jeroen with a massive loss.

                                                                                                                            LEARNING: Know the actual outlook of a company before investing. Diversify your portfolio.

                                                                                                                             

                                                                                                                            “90% of the investing population doesn’t know the actual outlook of a company.”

                                                                                                                            Jeroen Blokland

                                                                                                                             

                                                                                                                            Guest profile

                                                                                                                            Jeroen Blokland is a long-term multi-asset investor with a long-term track record in financial markets. Jeroen worked at Robeco, the largest independent asset manager in The Netherlands, for almost 20 years before launching his independent investment research company, True Insights.

                                                                                                                            True Insights offers institutional and retail clients high-quality investment research to make better-informed investment decisions based on a proven investment framework covering Macro, Sentiment, and Valuation.

                                                                                                                            True Insights is currently offering a discount on its Subscriptions. Get a 20% discount on your Monthly Premium Subscription (add ‘MONTH’ in the ‘Have a coupon?’ section.) You can also get a 25% discount on top of the regular discount on our Annual Subscription (add ‘YEAR’ in the ‘Have a coupon?’ section.’)

                                                                                                                            Worst investment ever

                                                                                                                            When Jeroen decided to dive into the investment world, he knew nothing about investing and had no framework. He came across a Dutch company, Tulip Computers, the second biggest PC seller, next to IBM in the Netherlands.

                                                                                                                            Jeroen didn’t know anything about the company besides what they did. He looked in the newspaper and ranked the company’s 12-month performance from high to low. He figured it was a good investment. His genuine belief was this is how you make the most money.

                                                                                                                            The company reported a loss of $27 million in the same year Jeroen invested. In 1979 that was a very massive loss. Then the company went bankrupt, and Jeroen lost his entire investment.

                                                                                                                            Lessons learned

                                                                                                                            • 90% of investors don’t know the actual outlook of a company, even if they’re experienced in reading a balance sheet.
                                                                                                                            • Though difficult, invest in a couple of companies based on their fundamentals.
                                                                                                                            • Diversify your portfolio.
                                                                                                                            
                                                                                                                            

                                                                                                                            Andrew’s takeaways

                                                                                                                            • Just like investors, most companies also don’t know their actual outlook.
                                                                                                                            
                                                                                                                            

                                                                                                                            Actionable advice

                                                                                                                            Diversify your portfolio and limit your risk by buying more companies or investing less.

                                                                                                                            Jeroen’s recommendations

                                                                                                                            Jeroen recommends using information and research that’s already been done by others. Then determine if you need to gather additional information by yourself. He recommends Twitter as a massive source of helpful information—as long as you follow the right people.

                                                                                                                            No.1 goal for the next 12 months

                                                                                                                            Jeroen started a new business, and his number one goal for the next 12 months is to grow the knowledge part of the business so that more people have access to it.

                                                                                                                            Parting words

                                                                                                                             

                                                                                                                            “Continue investing because, in the end, it will work. Thank you for having me; it was nice.”

                                                                                                                            Jeroen Blokland

                                                                                                                             

                                                                                                                            [spp-transcript]

                                                                                                                             

                                                                                                                            Connect with Jeroen Blokland

                                                                                                                            • LinkedIn
                                                                                                                            • Twitter
                                                                                                                            • YouTube
                                                                                                                            • Website
                                                                                                                            
                                                                                                                            

                                                                                                                            Andrew’s books

                                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                            • My Worst Investment Ever
                                                                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                            
                                                                                                                            

                                                                                                                            Andrew’s online programs

                                                                                                                            • Valuation Master Class
                                                                                                                            • The Become a Better Investor Community
                                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                            • Finance Made Ridiculously Simple
                                                                                                                            • FVMR Investing: Quantamental Investing Across the World
                                                                                                                            • Become a Great Presenter and Increase Your Influence
                                                                                                                            • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                            • Achieve Your Goals
                                                                                                                            
                                                                                                                            

                                                                                                                            Connect with Andrew Stotz:

                                                                                                                            • astotz.com
                                                                                                                            • LinkedIn
                                                                                                                            • Facebook
                                                                                                                            • Instagram
                                                                                                                            • Twitter
                                                                                                                            • YouTube
                                                                                                                            • My Worst Investment Ever Podcast
                                                                                                                            
                                                                                                                            ]]>BIO: Jeroen Blokland is a long-term multi-asset investor with a long-term track record in financial markets. Jeroen worked at Robeco, the largest independent asset manager in The Netherlands, for almost 20 years before launching his independent investment research company, True Insights.

                                                                                                                            STORY: Jeroen’s first investment was in a Dutch company selling PCs. He barely did any research or due diligence. The company reported a loss of $27 million in the same year Jeroen invested. It later went bankrupt, leaving Jeroen with a massive loss.

                                                                                                                            LEARNING: Know the actual outlook of a company before investing. Diversify your portfolio.

                                                                                                                             

                                                                                                                            “90% of the investing population doesn’t know the actual outlook of a company.”

                                                                                                                            Jeroen Blokland

                                                                                                                             

                                                                                                                            Guest profile

                                                                                                                            Jeroen Blokland is a long-term multi-asset investor with a long-term track record in financial markets. Jeroen worked at Robeco, the largest independent asset manager in The Netherlands, for almost 20 years before launching his independent investment research company, True Insights.

                                                                                                                            True Insights offers institutional and retail clients high-quality investment research to make better-informed investment decisions based on a proven investment framework covering Macro, Sentiment, and Valuation.

                                                                                                                            True Insights is currently offering a discount on its Subscriptions. Get a 20% discount on your Monthly Premium Subscription (add ‘MONTH’ in the ‘Have a coupon?’ section.) You can also get a 25% discount on top of the regular discount on our Annual Subscription (add ‘YEAR’ in the ‘Have a coupon?’ section.’)

                                                                                                                            Worst investment ever

                                                                                                                            When Jeroen decided to dive into the investment world, he knew nothing about investing and had no framework. He came across a Dutch company, Tulip Computers, the second biggest PC seller, next to IBM in the Netherlands.

                                                                                                                            Jeroen didn’t know anything about the company besides what they did. He looked in the newspaper and ranked the company’s 12-month performance from high to low. He figured it was a good investment. His genuine belief was this is how you make the most money.

                                                                                                                            The company reported a loss of $27 million in the same year Jeroen invested. In 1979 that was a very massive loss. Then the company went bankrupt, and Jeroen lost his entire investment.

                                                                                                                            Lessons learned

                                                                                                                            • 90% of investors don’t know the actual outlook of a company, even if they’re experienced in reading a balance sheet.
                                                                                                                            • Though difficult, invest in a couple of companies based on their fundamentals.
                                                                                                                            • Diversify your portfolio.
                                                                                                                            
                                                                                                                            

                                                                                                                            Andrew’s takeaways

                                                                                                                            • Just like investors, most companies also don’t know their actual outlook.
                                                                                                                            
                                                                                                                            

                                                                                                                            Actionable advice

                                                                                                                            Diversify your portfolio and limit your risk by buying more companies or investing less.

                                                                                                                            Jeroen’s recommendations

                                                                                                                            Jeroen recommends using information and research that’s already been done by others. Then determine if you need to gather additional information by yourself. He recommends Twitter as a massive source of helpful information—as long as you follow the right people.

                                                                                                                            No.1 goal for the next 12 months

                                                                                                                            Jeroen started a new business, and his number one goal for the next 12 months is to grow the knowledge part of the business so that more people have access to it.

                                                                                                                            Parting words

                                                                                                                             

                                                                                                                            “Continue investing because, in the end, it will work. Thank you for having me; it was nice.”

                                                                                                                            Jeroen Blokland

                                                                                                                             

                                                                                                                            [spp-transcript]

                                                                                                                             

                                                                                                                            Connect with Jeroen Blokland

                                                                                                                            • LinkedIn
                                                                                                                            • Twitter
                                                                                                                            • YouTube
                                                                                                                            • Website
                                                                                                                            
                                                                                                                            

                                                                                                                            Andrew’s books

                                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                            • My Worst Investment Ever
                                                                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                            
                                                                                                                            

                                                                                                                            Andrew’s online programs

                                                                                                                            • Valuation Master Class
                                                                                                                            • The Become a Better Investor Community
                                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                            • Finance Made Ridiculously Simple
                                                                                                                            • FVMR Investing: Quantamental Investing Across the World
                                                                                                                            • Become a Great Presenter and Increase Your Influence
                                                                                                                            • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                            • Achieve Your Goals
                                                                                                                            
                                                                                                                            

                                                                                                                            Connect with Andrew Stotz:

                                                                                                                            • astotz.com
                                                                                                                            • LinkedIn
                                                                                                                            • Facebook
                                                                                                                            • Instagram
                                                                                                                            • Twitter
                                                                                                                            • YouTube
                                                                                                                            • My Worst Investment Ever Podcast
                                                                                                                            
                                                                                                                            ]]>c4d44fec-fcb4-4cc9-964b-555498ddc54dMon, 13 Mar 2023 06:00:00 +070024:46falsefullJeroen Blokland is a long-term multi-asset investor with a long-term track record in financial markets. Jeroen worked at Robeco, the largest independent asset manager in The Netherlands, for almost 20 years before launching his independent investment research company, True Insights.ISMS 8: Larry Swedroe – Are You Overconfident in Your Skills?In this episode of Investment Strategy Made Simple (ISMS), Andrew and Larry discuss a chapter of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this first series of many, they talk about mistake number one: Are you overconfident in your skills?

                                                                                                                            LEARNING: Don’t be overconfident. Look for value-added information when researching an investment.

                                                                                                                             

                                                                                                                            “When you trade, understand that you’re competing against the market’s collective wisdom.”

                                                                                                                            Larry Swedroe

                                                                                                                             

                                                                                                                            In today’s episode, Andrew chats with Larry Swedroe, head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                                                                            Larry deeply understands the world of academic research and investing, especially risk. Today Andrew and Larry discuss a chapter of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this first series of many, they talk about mistake number one: Are you overconfident in your skills?

                                                                                                                            The majority of people are naturally overconfident

                                                                                                                            There’s a lot of research showing that human beings tend to be overconfident in their skills. If you ask people, are you liked by others more than the average person? Are you a better lover than the average person? Can you drive better than the average person? It doesn’t matter what the question is; the answer from a vast majority is that they think they’re better than the average person. According to Larry, this is actually a good healthy thing. Imagine getting up daily, looking in the mirror, seeing yourself, and thinking you’re dumb, ugly, stupid, and nobody likes you. You’d live a sad life. So it’s good to feel better about yourself as long as you don’t make mistakes.

                                                                                                                            Overconfidence isn’t such a good trait when it comes to investing

                                                                                                                            Larry says that the market is made up of all types of investors. If some investors are going to outperform, then some investors must underperform. The market must have victims to exploit. Most investors tend to be overconfident and think they’re a lot smarter than the average person, so they will be able to control them. But according to evidence, that’s dead wrong because people are not competing one-on-one.

                                                                                                                            Female investors get better returns than men due to underconfidence

                                                                                                                            Women are not better at stock picking than men. The stocks they buy perform just as poorly as those that men buy. And the stocks they sell go on to outperform in equal measure. However, men have overconfidence in skills they don’t have, while women simply know better. They don’t overestimate their skills as much as men do, so they trade less and have fewer turnover costs, resulting in better returns. Interestingly, married women do worse than single women because they get influenced by their husbands, while married men do better than single men because they have the influence of the sage counsel of their spouses.

                                                                                                                            Does hard work, training, and knowledge play any role in outperformance?

                                                                                                                            Generally, the more knowledge you have, the wiser you become. But the game of investing is very different than, say, the game of tennis, where you’re playing one-on-one. During a one-on-one match, whether tennis, chess, or any other similar game, minor differences in skill lead to considerable differences in outcome. As the competition gets more challenging, it becomes harder to win. And luck becomes more determined.

                                                                                                                            According to Larry, when we’re playing a game of investing, we’re not competing one-on-one. We’re competing against the collective wisdom of the marketplace. That’s a much different competitor. That’s why Warren Buffett today has difficulty keeping up his winning streak of the 80s.

                                                                                                                            The second related mistake is when researching a company, a famous person or a newscaster gives investors enticing information about a company he’s touting, and the investor decides they should buy that. They’re confusing information from this person with value-added information. They assume they’re the only ones who know this information. Yet thousands of other people could be watching this famous person or newscaster. The truth is the average person doesn’t have value-relevant information, and they’re competing against the market’s collective wisdom, which is a much tougher competitor than one-on-one. This is why only a few active managers can outperform persistently.

                                                                                                                            Know who is on the other side of the trade before you execute

                                                                                                                            Whenever you buy a stock, you should stop before you execute and ask yourself who’s on the other side of the trade. Ninety percent of the trades are done by sophisticated institutions that hire world-class mathematicians and scientists with PhDs in finance, invest in massive technology, and have more access to information than an individual investor. So are you seriously going to be overconfident and believe you know more than these institutions?

                                                                                                                            Investing has become a lot harder than it was 20 years ago

                                                                                                                            Larry says investing is much more complex today and will continue getting harder. There are several reasons why this is the case.

                                                                                                                            1. Increased financial innovations

                                                                                                                            Before the 1980s and around 1990, the only operating model we had for asset pricing was the capital asset pricing model (CAPM). This model could only explain about two-thirds of the differences in returns of diversified portfolios. This meant there were tremendous opportunities to generate alpha.

                                                                                                                            Along came a bunch of researchers who found two characteristics that added explanatory power. One of them was that small stocks outperform large stocks. The other was that cheap stocks outperformed expensive stocks. So now, on top of CAPM, there were two other factors: size and value. Now investors could no longer claim to outperform just by buying small companies.

                                                                                                                            Research by Jegadeesh and Titman found a momentum factor. This was that stocks that had outperformed in the past six months to a year roughly had a tendency—a bit more than half the time—to continue outperforming over the next short period, on average, five-six months. So now active managers couldn’t claim alpha by buying positive momentum stocks, avoiding negative ones, or shorting them.

                                                                                                                            Then in 2013, Robert Novy-Marx wrote a paper on profitability. He found that you could outperform your position by buying more profitable companies—Just as Warren Buffett did.

                                                                                                                            Most recent research by Cliff Asness and the team at AQR combined profitability with other factors related to what Buffett had been saying; you shouldn’t just buy cheap, profitable companies. You want to buy them when their earnings are more stable. Such companies don’t have a lot of financial leverage, making them quality companies. So now we have a factor called QNJ: quality minus junk. So you buy the quality stocks and short the junk ones.

                                                                                                                            With all these financial innovations in place, investing as an individual gets harder because stock selection strategies are not a privilege to a select few. Anybody can invest in small-cap stocks en masse. Therefore anybody can capture that alpha or cause it to disappear.

                                                                                                                            2. Increased financial knowledge and competition

                                                                                                                            There was no financial theory until the late 60s and early 70s. People managing money were not finance majors and didn’t know finance theory. Today, everyone managing money has easy access to financial knowledge. With increased knowledge comes tougher competition and the paradox of skill. When competition is tougher, it becomes harder to differentiate yourself.

                                                                                                                            It’s the smarter, more informed people playing the game now making it harder for others to outperform by a wide margin.

                                                                                                                            3. Retail investors have been channeled into hedge funds

                                                                                                                            For there to be winners in the market, there must be victims to outperform. In 1945, after World War 2, 90% of all stocks were held by individual investors in their brokerage accounts. So they were doing most of the trading. There were only 100 mutual funds in the US in the 1950s. Today those numbers are entirely reversed. Most of the trading is done by institutions. This means when you’re trading, you’re likely trading against giants like Renaissance Technologies, Citadel, or Morgan Stanley. Whereas in the 40s and 50s, you were trading against another naive investor. Today, retail investors have been channeled into funds managed by the most innovative people.

                                                                                                                            4. Dollars are growing while sources of alpha are shrinking

                                                                                                                            The sources of alpha are continuously shrinking while the supply of dollars chasing them has grown dramatically. In the late 90s, there was $300 billion in hedge funds. Today, there’s over $5 trillion. On the other hand, the sources of alpha...]]>In this episode of Investment Strategy Made Simple (ISMS), Andrew and Larry discuss a chapter of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this first series of many, they talk about mistake number one: Are you overconfident in your skills?

                                                                                                                            LEARNING: Don’t be overconfident. Look for value-added information when researching an investment.

                                                                                                                             

                                                                                                                            “When you trade, understand that you’re competing against the market’s collective wisdom.”

                                                                                                                            Larry Swedroe

                                                                                                                             

                                                                                                                            In today’s episode, Andrew chats with Larry Swedroe, head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

                                                                                                                            Larry deeply understands the world of academic research and investing, especially risk. Today Andrew and Larry discuss a chapter of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this first series of many, they talk about mistake number one: Are you overconfident in your skills?

                                                                                                                            The majority of people are naturally overconfident

                                                                                                                            There’s a lot of research showing that human beings tend to be overconfident in their skills. If you ask people, are you liked by others more than the average person? Are you a better lover than the average person? Can you drive better than the average person? It doesn’t matter what the question is; the answer from a vast majority is that they think they’re better than the average person. According to Larry, this is actually a good healthy thing. Imagine getting up daily, looking in the mirror, seeing yourself, and thinking you’re dumb, ugly, stupid, and nobody likes you. You’d live a sad life. So it’s good to feel better about yourself as long as you don’t make mistakes.

                                                                                                                            Overconfidence isn’t such a good trait when it comes to investing

                                                                                                                            Larry says that the market is made up of all types of investors. If some investors are going to outperform, then some investors must underperform. The market must have victims to exploit. Most investors tend to be overconfident and think they’re a lot smarter than the average person, so they will be able to control them. But according to evidence, that’s dead wrong because people are not competing one-on-one.

                                                                                                                            Female investors get better returns than men due to underconfidence

                                                                                                                            Women are not better at stock picking than men. The stocks they buy perform just as poorly as those that men buy. And the stocks they sell go on to outperform in equal measure. However, men have overconfidence in skills they don’t have, while women simply know better. They don’t overestimate their skills as much as men do, so they trade less and have fewer turnover costs, resulting in better returns. Interestingly, married women do worse than single women because they get influenced by their husbands, while married men do better than single men because they have the influence of the sage counsel of their spouses.

                                                                                                                            Does hard work, training, and knowledge play any role in outperformance?

                                                                                                                            Generally, the more knowledge you have, the wiser you become. But the game of investing is very different than, say, the game of tennis, where you’re playing one-on-one. During a one-on-one match, whether tennis, chess, or any other similar game, minor differences in skill lead to considerable differences in outcome. As the competition gets more challenging, it becomes harder to win. And luck becomes more determined.

                                                                                                                            According to Larry, when we’re playing a game of investing, we’re not competing one-on-one. We’re competing against the collective wisdom of the marketplace. That’s a much different competitor. That’s why Warren Buffett today has difficulty keeping up his winning streak of the 80s.

                                                                                                                            The second related mistake is when researching a company, a famous person or a newscaster gives investors enticing information about a company he’s touting, and the investor decides they should buy that. They’re confusing information from this person with value-added information. They assume they’re the only ones who know this information. Yet thousands of other people could be watching this famous person or newscaster. The truth is the average person doesn’t have value-relevant information, and they’re competing against the market’s collective wisdom, which is a much tougher competitor than one-on-one. This is why only a few active managers can outperform persistently.

                                                                                                                            Know who is on the other side of the trade before you execute

                                                                                                                            Whenever you buy a stock, you should stop before you execute and ask yourself who’s on the other side of the trade. Ninety percent of the trades are done by sophisticated institutions that hire world-class mathematicians and scientists with PhDs in finance, invest in massive technology, and have more access to information than an individual investor. So are you seriously going to be overconfident and believe you know more than these institutions?

                                                                                                                            Investing has become a lot harder than it was 20 years ago

                                                                                                                            Larry says investing is much more complex today and will continue getting harder. There are several reasons why this is the case.

                                                                                                                            1. Increased financial innovations

                                                                                                                            Before the 1980s and around 1990, the only operating model we had for asset pricing was the capital asset pricing model (CAPM). This model could only explain about two-thirds of the differences in returns of diversified portfolios. This meant there were tremendous opportunities to generate alpha.

                                                                                                                            Along came a bunch of researchers who found two characteristics that added explanatory power. One of them was that small stocks outperform large stocks. The other was that cheap stocks outperformed expensive stocks. So now, on top of CAPM, there were two other factors: size and value. Now investors could no longer claim to outperform just by buying small companies.

                                                                                                                            Research by Jegadeesh and Titman found a momentum factor. This was that stocks that had outperformed in the past six months to a year roughly had a tendency—a bit more than half the time—to continue outperforming over the next short period, on average, five-six months. So now active managers couldn’t claim alpha by buying positive momentum stocks, avoiding negative ones, or shorting them.

                                                                                                                            Then in 2013, Robert Novy-Marx wrote a paper on profitability. He found that you could outperform your position by buying more profitable companies—Just as Warren Buffett did.

                                                                                                                            Most recent research by Cliff Asness and the team at AQR combined profitability with other factors related to what Buffett had been saying; you shouldn’t just buy cheap, profitable companies. You want to buy them when their earnings are more stable. Such companies don’t have a lot of financial leverage, making them quality companies. So now we have a factor called QNJ: quality minus junk. So you buy the quality stocks and short the junk ones.

                                                                                                                            With all these financial innovations in place, investing as an individual gets harder because stock selection strategies are not a privilege to a select few. Anybody can invest in small-cap stocks en masse. Therefore anybody can capture that alpha or cause it to disappear.

                                                                                                                            2. Increased financial knowledge and competition

                                                                                                                            There was no financial theory until the late 60s and early 70s. People managing money were not finance majors and didn’t know finance theory. Today, everyone managing money has easy access to financial knowledge. With increased knowledge comes tougher competition and the paradox of skill. When competition is tougher, it becomes harder to differentiate yourself.

                                                                                                                            It’s the smarter, more informed people playing the game now making it harder for others to outperform by a wide margin.

                                                                                                                            3. Retail investors have been channeled into hedge funds

                                                                                                                            For there to be winners in the market, there must be victims to outperform. In 1945, after World War 2, 90% of all stocks were held by individual investors in their brokerage accounts. So they were doing most of the trading. There were only 100 mutual funds in the US in the 1950s. Today those numbers are entirely reversed. Most of the trading is done by institutions. This means when you’re trading, you’re likely trading against giants like Renaissance Technologies, Citadel, or Morgan Stanley. Whereas in the 40s and 50s, you were trading against another naive investor. Today, retail investors have been channeled into funds managed by the most innovative people.

                                                                                                                            4. Dollars are growing while sources of alpha are shrinking

                                                                                                                            The sources of alpha are continuously shrinking while the supply of dollars chasing them has grown dramatically. In the late 90s, there was $300 billion in hedge funds. Today, there’s over $5 trillion. On the other hand, the sources of alpha are shrinking because the academics have converted into beta—which is just a systematic characteristic that’s replicable. It’s no wonder it’s becoming harder and harder to trade.

                                                                                                                            Will the largest hedge funds remain the top players, or will another group rise in the next 10 years?

                                                                                                                            Larry predicts that the largest hedge funds, such as Renaissance and Citadel, will grow as more people go into systematic passive strategies. A few active managers who are becoming successful will likely continue to gain market share. This is likely to create a problem for the managers. This is because the only way they can continue generating alpha is to stop taking assets. Otherwise, they’ll get too big and have to diversify or increase their market impact costs. Very few managers will turn down the chance to earn higher AUM fees.

                                                                                                                            Final thoughts from Larry

                                                                                                                            Don’t be overconfident. When you’re overconfident, you’ll think you can outperform when the odds say you’re not likely to be able to do so. Also, don’t confuse information—something everybody knows—with value-added information—something nobody else knows or you can interpret better.

                                                                                                                            About Larry Swedroe

                                                                                                                            Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

                                                                                                                            Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                                                                            Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                                                                            Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                                                                             

                                                                                                                            [spp-transcript]

                                                                                                                             

                                                                                                                            Connect with Larry Swedroe

                                                                                                                            • LinkedIn
                                                                                                                            • Twitter
                                                                                                                            • Website
                                                                                                                            • Books
                                                                                                                            
                                                                                                                            

                                                                                                                            Andrew’s books

                                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                            • My Worst Investment Ever
                                                                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                            
                                                                                                                            

                                                                                                                            Andrew’s online programs

                                                                                                                            • Valuation Master Class
                                                                                                                            • The Become a Better Investor Community
                                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                            • Finance Made Ridiculously Simple
                                                                                                                            • FVMR Investing: Quantamental Investing Across the World
                                                                                                                            • Become a Great Presenter and Increase Your Influence
                                                                                                                            • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                            • Achieve Your Goals
                                                                                                                            
                                                                                                                            

                                                                                                                            Connect with Andrew Stotz:

                                                                                                                            • astotz.com
                                                                                                                            • LinkedIn
                                                                                                                            • Facebook
                                                                                                                            • Instagram
                                                                                                                            • Twitter
                                                                                                                            • YouTube
                                                                                                                            • My Worst Investment Ever Podcast
                                                                                                                            
                                                                                                                            ]]>3ae572a3-1f15-40ac-bddc-b0255b547fe2Fri, 10 Mar 2023 06:00:00 +070057:51falsefullIn this episode of Investment Strategy Made Simple (ISMS), Andrew and Larry discuss a chapter of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this first series of many, they talk about mistake number one: Are you overconfident in your skills?Brian Feroldi – Be Careful When Trading OptionsBIO: Brian Feroldi is a financial educator, YouTuber, and author. His career mission statement is “to demystify finance.”

                                                                                                                            STORY: Brian invested in an oil pipeline company with take-or-pay contracts. This meant that the company would get paid either way if the price of oil or natural gas went up or down. Prices went down and despite the contract, the pipeline’s stock went down because its customers couldn’t afford to pay. Brian lost 70% of his entire portfolio.

                                                                                                                            LEARNING: Don’t use options as an investment strategy. Never let one company become your largest position. Be careful about trying to leverage beyond your capability.

                                                                                                                             

                                                                                                                            “When my research makes me unbelievably bullish about something, that probably means I’m blind to some risk.”

                                                                                                                            Brian Feroldi

                                                                                                                             

                                                                                                                            Guest profile

                                                                                                                            Brian Feroldi is a financial educator, YouTuber, and author. His career mission statement is “to demystify finance.” He loves to help other people do better with their money, especially their investments. He has written more than 3,000 articles on stocks, investing, and personal finance for the Motley Fool.

                                                                                                                            Worst investment ever

                                                                                                                            Brian invested in a company in 2013, about nine years into his investing journey. Though not an expert, he completely understood business fundamentals. He had a framework for what kind of companies he was going after. The company Brian invested in was Kinder Morgan, an oil pipeline company. That means they don’t go out and find the oil but own and operate pipelines that move oil and natural gas from the extraction point to a processing plant. The company then takes a fee for moving the oil.

                                                                                                                            What really attracted Brian to that business model was that it had take-or-pay contracts in place. Meaning that if the price of oil or natural gas went up or down, Kinder Morgan would get paid either way.

                                                                                                                            In theory, this company had locked in guaranteed recurring revenue. In addition, it was run by its founder, Richard Kinder, who owned tons of stock and continually bought more. The company had a 4% dividend yield at the time, plus a realistic growth plan for them to expand that dividend by about 10% per year. So from the outside, it looked like a very low-risk company that could earn Brian a high dividend yield.

                                                                                                                            The more Brian studied the company, the more bullish he became on its potential. So over time, he would add to the stock because he thought it was attractive. Within no time, Kinder Morgan became Brian’s number one position.

                                                                                                                            At the time, Brian was learning about options and how they work. He set up a synthetic long on Kinder Morgan. Synthetic long is when you sell a long-dated put, which brings in cash today, and you use that cash to buy a long-dated call option. Essentially, you get to benefit from the upside. So if that stock goes up, you get paid for that stock to go up ahead of time. So the returns to the investor are enormous on a percentage basis. The downside to a synthetic long is if the stock price falls, you’re on the hook for pure leverage because you don’t own the shares. Brian’s confidence level in this thing was sky-high because it looked so bulletproof. After he set up this position, the oil and natural gas prices suddenly tanked by more than 50%. There was simply an oversupply on the market.

                                                                                                                            What confused Brian at the time was that Kinder Morgan’s stock was going down a lot during this downturn. The company had take-or-pay contracts in place, and it got paid no matter the energy price, so why was this stock going down?

                                                                                                                            Even though Brian’s position was in the red, he added to it because he believed it would recover and go up. Kinder Morgan’s stock ended up falling 70%. This was because the take or pay contracts only matter if the person on the other side of the transaction can afford to meet their end of the agreement. So while the company had a guaranteed locked-in revenue in place, those customers were dependent on the price of oil and natural gas and were hurting. The customers literally couldn’t pay. Once Brian eventually learned that, he capitulated and took up the largest loss he’s ever taken.

                                                                                                                            Lessons learned

                                                                                                                            • Don’t use options as an investment strategy.
                                                                                                                            • Never let one company become your largest position. Instead, put a little capital into different companies and watch them grow and flourish.
                                                                                                                            • Be careful when investing in an industry that depends on market price luck for the investment to work out.
                                                                                                                            • When your research makes you unbelievably bullish about something, you’re likely blind to some risk.
                                                                                                                            • Have some rules for the maximum amount you want to put into an idea because you can still be wrong no matter how confident you are.
                                                                                                                            
                                                                                                                            

                                                                                                                            Andrew’s takeaways

                                                                                                                            • Don’t be seduced by your research about a company that fits in the supply chain.
                                                                                                                            • Contracts can be renegotiated. So if you find yourself in a bad situation, talk to the people you signed a contract with and renegotiate the terms.
                                                                                                                            • Be careful about trying to leverage beyond your capability.
                                                                                                                            
                                                                                                                            

                                                                                                                            Actionable advice

                                                                                                                            Write down a list of the possible business risks you want to avoid. Then whenever you’re researching an investment, run it through that checklist. This will help you avoid making the same mistake again.

                                                                                                                            Brian’s recommendations

                                                                                                                            Brian recommends reading books and watching YouTube videos to get all the information you need to make good decisions. Brian also recommends checking out his free investing checklist—the exact investing checklist he uses. The checklist contains both the positive attributes that Brian looks for in a business and the risks he wants to avoid.

                                                                                                                            No.1 goal for the next 12 months

                                                                                                                            Brian’s number one goal for the next 12 months is to keep the flywheel that he has going and continue to grow his business.

                                                                                                                            Parting words

                                                                                                                            “Learn to love the process of becoming a better investor. If you can actually find joy in the process of becoming a better investor, you’ll actually become one.”

                                                                                                                            Brian Feroldi

                                                                                                                             

                                                                                                                            [spp-transcript]

                                                                                                                             

                                                                                                                            Connect with Brian Feroldi

                                                                                                                            • LinkedIn
                                                                                                                            • Twitter
                                                                                                                            • YouTube
                                                                                                                            • Blog
                                                                                                                            • Book
                                                                                                                            
                                                                                                                            

                                                                                                                            Andrew’s books

                                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                            • My Worst Investment Ever
                                                                                                                            • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                            • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                            
                                                                                                                            

                                                                                                                            Andrew’s online programs

                                                                                                                            • Valuation Master Class
                                                                                                                            • The Become a Better Investor Community
                                                                                                                            • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                            • Finance Made Ridiculously Simple
                                                                                                                            • FVMR Investing: Quantamental Investing Across the World
                                                                                                                            • Become a Great Presenter and Increase Your Influence
                                                                                                                            • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                            • Achieve Your Goals
                                                                                                                            
                                                                                                                            

                                                                                                                            Connect with Andrew Stotz:

                                                                                                                            • astotz.com
                                                                                                                            • LinkedIn
                                                                                                                            • Facebook
                                                                                                                            • BIO: Brian Feroldi is a financial educator, YouTuber, and author. His career mission statement is “to demystify finance.”

                                                                                                                              STORY: Brian invested in an oil pipeline company with take-or-pay contracts. This meant that the company would get paid either way if the price of oil or natural gas went up or down. Prices went down and despite the contract, the pipeline’s stock went down because its customers couldn’t afford to pay. Brian lost 70% of his entire portfolio.

                                                                                                                              LEARNING: Don’t use options as an investment strategy. Never let one company become your largest position. Be careful about trying to leverage beyond your capability.

                                                                                                                               

                                                                                                                              “When my research makes me unbelievably bullish about something, that probably means I’m blind to some risk.”

                                                                                                                              Brian Feroldi

                                                                                                                               

                                                                                                                              Guest profile

                                                                                                                              Brian Feroldi is a financial educator, YouTuber, and author. His career mission statement is “to demystify finance.” He loves to help other people do better with their money, especially their investments. He has written more than 3,000 articles on stocks, investing, and personal finance for the Motley Fool.

                                                                                                                              Worst investment ever

                                                                                                                              Brian invested in a company in 2013, about nine years into his investing journey. Though not an expert, he completely understood business fundamentals. He had a framework for what kind of companies he was going after. The company Brian invested in was Kinder Morgan, an oil pipeline company. That means they don’t go out and find the oil but own and operate pipelines that move oil and natural gas from the extraction point to a processing plant. The company then takes a fee for moving the oil.

                                                                                                                              What really attracted Brian to that business model was that it had take-or-pay contracts in place. Meaning that if the price of oil or natural gas went up or down, Kinder Morgan would get paid either way.

                                                                                                                              In theory, this company had locked in guaranteed recurring revenue. In addition, it was run by its founder, Richard Kinder, who owned tons of stock and continually bought more. The company had a 4% dividend yield at the time, plus a realistic growth plan for them to expand that dividend by about 10% per year. So from the outside, it looked like a very low-risk company that could earn Brian a high dividend yield.

                                                                                                                              The more Brian studied the company, the more bullish he became on its potential. So over time, he would add to the stock because he thought it was attractive. Within no time, Kinder Morgan became Brian’s number one position.

                                                                                                                              At the time, Brian was learning about options and how they work. He set up a synthetic long on Kinder Morgan. Synthetic long is when you sell a long-dated put, which brings in cash today, and you use that cash to buy a long-dated call option. Essentially, you get to benefit from the upside. So if that stock goes up, you get paid for that stock to go up ahead of time. So the returns to the investor are enormous on a percentage basis. The downside to a synthetic long is if the stock price falls, you’re on the hook for pure leverage because you don’t own the shares. Brian’s confidence level in this thing was sky-high because it looked so bulletproof. After he set up this position, the oil and natural gas prices suddenly tanked by more than 50%. There was simply an oversupply on the market.

                                                                                                                              What confused Brian at the time was that Kinder Morgan’s stock was going down a lot during this downturn. The company had take-or-pay contracts in place, and it got paid no matter the energy price, so why was this stock going down?

                                                                                                                              Even though Brian’s position was in the red, he added to it because he believed it would recover and go up. Kinder Morgan’s stock ended up falling 70%. This was because the take or pay contracts only matter if the person on the other side of the transaction can afford to meet their end of the agreement. So while the company had a guaranteed locked-in revenue in place, those customers were dependent on the price of oil and natural gas and were hurting. The customers literally couldn’t pay. Once Brian eventually learned that, he capitulated and took up the largest loss he’s ever taken.

                                                                                                                              Lessons learned

                                                                                                                              • Don’t use options as an investment strategy.
                                                                                                                              • Never let one company become your largest position. Instead, put a little capital into different companies and watch them grow and flourish.
                                                                                                                              • Be careful when investing in an industry that depends on market price luck for the investment to work out.
                                                                                                                              • When your research makes you unbelievably bullish about something, you’re likely blind to some risk.
                                                                                                                              • Have some rules for the maximum amount you want to put into an idea because you can still be wrong no matter how confident you are.
                                                                                                                              
                                                                                                                              

                                                                                                                              Andrew’s takeaways

                                                                                                                              • Don’t be seduced by your research about a company that fits in the supply chain.
                                                                                                                              • Contracts can be renegotiated. So if you find yourself in a bad situation, talk to the people you signed a contract with and renegotiate the terms.
                                                                                                                              • Be careful about trying to leverage beyond your capability.
                                                                                                                              
                                                                                                                              

                                                                                                                              Actionable advice

                                                                                                                              Write down a list of the possible business risks you want to avoid. Then whenever you’re researching an investment, run it through that checklist. This will help you avoid making the same mistake again.

                                                                                                                              Brian’s recommendations

                                                                                                                              Brian recommends reading books and watching YouTube videos to get all the information you need to make good decisions. Brian also recommends checking out his free investing checklist—the exact investing checklist he uses. The checklist contains both the positive attributes that Brian looks for in a business and the risks he wants to avoid.

                                                                                                                              No.1 goal for the next 12 months

                                                                                                                              Brian’s number one goal for the next 12 months is to keep the flywheel that he has going and continue to grow his business.

                                                                                                                              Parting words

                                                                                                                              “Learn to love the process of becoming a better investor. If you can actually find joy in the process of becoming a better investor, you’ll actually become one.”

                                                                                                                              Brian Feroldi

                                                                                                                               

                                                                                                                              [spp-transcript]

                                                                                                                               

                                                                                                                              Connect with Brian Feroldi

                                                                                                                              • LinkedIn
                                                                                                                              • Twitter
                                                                                                                              • YouTube
                                                                                                                              • Blog
                                                                                                                              • Book
                                                                                                                              
                                                                                                                              

                                                                                                                              Andrew’s books

                                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                              • My Worst Investment Ever
                                                                                                                              • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                              • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                              
                                                                                                                              

                                                                                                                              Andrew’s online programs

                                                                                                                              • Valuation Master Class
                                                                                                                              • The Become a Better Investor Community
                                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                              • Finance Made Ridiculously Simple
                                                                                                                              • FVMR Investing: Quantamental Investing Across the World
                                                                                                                              • Become a Great Presenter and Increase Your Influence
                                                                                                                              • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                              • Achieve Your Goals
                                                                                                                              
                                                                                                                              

                                                                                                                              Connect with Andrew Stotz:

                                                                                                                              • astotz.com
                                                                                                                              • LinkedIn
                                                                                                                              • Facebook
                                                                                                                              • Instagram
                                                                                                                              • Twitter
                                                                                                                              • YouTube
                                                                                                                              • My Worst Investment Ever Podcast
                                                                                                                              
                                                                                                                              

                                                                                                                              Further reading mentioned

                                                                                                                              • Atul Gawande (December 2009), The Checklist Manifesto: How to Get Things Right.
                                                                                                                              
                                                                                                                              ]]>956b2a34-a824-498b-bade-55218eab837fThu, 09 Mar 2023 06:00:00 +070033:01falsefullBrian Feroldi is a financial educator, YouTuber, and author. His career mission statement is “to demystify finance.”Matt LeBris – Prepare for the Downs During the UptimeBIO: Matt LeBris is a born and raised NY’er who inevitably caught the hustler’s spirit that fills his hometown streets.

                                                                                                                              STORY: Matt got an opportunity to be part of a successful business venture in his early 20s. He was making good money and living a good life. Unfortunately, the business went down, and he took an unpaid internship with Daymond John of Shark Tank. Matt’s biggest mistake was to continue living large even though he no longer had money coming up. He blew over $80,000 of his savings by living way above his means.

                                                                                                                              LEARNING: Understand how you’re subconsciously programmed about money. Live below your means.

                                                                                                                               

                                                                                                                              “Understand how money works. If money’s not coming in, be very cautious of how it’s going out.”

                                                                                                                              Matt LeBris

                                                                                                                               

                                                                                                                              Guest profile

                                                                                                                              Matt LeBris is a born and raised NY’er who inevitably caught the hustler’s spirit that fills his hometown streets. A Forbes 30 Under 30 nominee, Matt has worked with Daymond John of Shark Tank as well as hosted a top 1% globally ranked podcast, Decoding Success. His life mission: impact one person a day, and that’s what he’s here to do today.

                                                                                                                              Worst investment ever

                                                                                                                              When Matt was in college, he was very fortunate to have had an opportunity to surround himself with individuals a little older than him in a particular business venture. It was a New York City hospitality throwing various events. Matt was in his early 20s and raking it in. He was doing good for himself and felt proud to make a lot of money, drive a nice car, travel, and eat out without making a dent in his bank account.

                                                                                                                              At a certain point, the business started to change. Matt also began to change as a person. This led him to intern with Daymond John of Shark Tank. It was a leap of faith for Matt because it was an unpaid internship. What Matt didn’t do was change his lifestyle. He wanted people to still think he was the rich young man he was before. Even though Matt now had no money coming in, he continued to live above his means just to maintain an image. He ended up blowing $80,000, taking Ubers instead of taking the train and eating at the most lavish restaurants instead of eating at home. Matt’s need to appease his ego was his worst investment ever. He is still trying to forgive himself for that.

                                                                                                                              Lessons learned

                                                                                                                              • Understand how you’re subconsciously programmed about money.
                                                                                                                              • Live below your means.
                                                                                                                              • Turn your worth inward.
                                                                                                                              
                                                                                                                              

                                                                                                                              Andrew’s takeaways

                                                                                                                              • Your life is going to be full of ups and downs. You’ve got to manage during your uptimes to have the cushion you need to survive the downtime.
                                                                                                                              • Spend as little as you can and take pride in that. This will keep you happy even during your worst times.
                                                                                                                              
                                                                                                                              

                                                                                                                              Actionable advice

                                                                                                                              Understand how money works. If money’s not coming in, be very cautious of how it’s going out. Put your ego aside and find any possible ways to make money.

                                                                                                                              Matt’s recommendations

                                                                                                                              Matt recommends talking to somebody like a therapist if you’re feeling down or struggling to regularly work through these issues.

                                                                                                                              No.1 goal for the next 12 months

                                                                                                                              Matt’s number one goal for the next 12 months is to adopt the mindset of John Gordon’s simple equation: E+P=O (events plus perspective equals the outcome.)

                                                                                                                              Parting words

                                                                                                                               

                                                                                                                              “I’m giving you your kudos, Andrew. Thank you so much for the opportunity to join you here on this platform. Shout out to everyone that’s listening.”

                                                                                                                              Matt LeBris

                                                                                                                               

                                                                                                                              [spp-transcript]

                                                                                                                               

                                                                                                                              Connect with Matt LeBris

                                                                                                                              • LinkedIn
                                                                                                                              • Twitter
                                                                                                                              • Facebook
                                                                                                                              • Instagram
                                                                                                                              • YouTube
                                                                                                                              • Blog
                                                                                                                              • Podcast
                                                                                                                              
                                                                                                                              

                                                                                                                              Andrew’s books

                                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                              • My Worst Investment Ever
                                                                                                                              • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                              • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                              
                                                                                                                              

                                                                                                                              Andrew’s online programs

                                                                                                                              • Valuation Master Class
                                                                                                                              • The Become a Better Investor Community
                                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                              • Finance Made Ridiculously Simple
                                                                                                                              • FVMR Investing: Quantamental Investing Across the World
                                                                                                                              • Become a Great Presenter and Increase Your Influence
                                                                                                                              • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                              • Achieve Your Goals
                                                                                                                              
                                                                                                                              

                                                                                                                              Connect with Andrew Stotz:

                                                                                                                              • astotz.com
                                                                                                                              • LinkedIn
                                                                                                                              • Facebook
                                                                                                                              • Instagram
                                                                                                                              • Twitter
                                                                                                                              • YouTube
                                                                                                                              • My Worst Investment Ever Podcast
                                                                                                                              
                                                                                                                              

                                                                                                                              Further reading mentioned

                                                                                                                              • T. Harv Eker (October 2009), Secrets of the Millionaire Mind: Mastering the Inner Game of Wealth
                                                                                                                              
                                                                                                                              ]]>BIO: Matt LeBris is a born and raised NY’er who inevitably caught the hustler’s spirit that fills his hometown streets.

                                                                                                                              STORY: Matt got an opportunity to be part of a successful business venture in his early 20s. He was making good money and living a good life. Unfortunately, the business went down, and he took an unpaid internship with Daymond John of Shark Tank. Matt’s biggest mistake was to continue living large even though he no longer had money coming up. He blew over $80,000 of his savings by living way above his means.

                                                                                                                              LEARNING: Understand how you’re subconsciously programmed about money. Live below your means.

                                                                                                                               

                                                                                                                              “Understand how money works. If money’s not coming in, be very cautious of how it’s going out.”

                                                                                                                              Matt LeBris

                                                                                                                               

                                                                                                                              Guest profile

                                                                                                                              Matt LeBris is a born and raised NY’er who inevitably caught the hustler’s spirit that fills his hometown streets. A Forbes 30 Under 30 nominee, Matt has worked with Daymond John of Shark Tank as well as hosted a top 1% globally ranked podcast, Decoding Success. His life mission: impact one person a day, and that’s what he’s here to do today.

                                                                                                                              Worst investment ever

                                                                                                                              When Matt was in college, he was very fortunate to have had an opportunity to surround himself with individuals a little older than him in a particular business venture. It was a New York City hospitality throwing various events. Matt was in his early 20s and raking it in. He was doing good for himself and felt proud to make a lot of money, drive a nice car, travel, and eat out without making a dent in his bank account.

                                                                                                                              At a certain point, the business started to change. Matt also began to change as a person. This led him to intern with Daymond John of Shark Tank. It was a leap of faith for Matt because it was an unpaid internship. What Matt didn’t do was change his lifestyle. He wanted people to still think he was the rich young man he was before. Even though Matt now had no money coming in, he continued to live above his means just to maintain an image. He ended up blowing $80,000, taking Ubers instead of taking the train and eating at the most lavish restaurants instead of eating at home. Matt’s need to appease his ego was his worst investment ever. He is still trying to forgive himself for that.

                                                                                                                              Lessons learned

                                                                                                                              • Understand how you’re subconsciously programmed about money.
                                                                                                                              • Live below your means.
                                                                                                                              • Turn your worth inward.
                                                                                                                              
                                                                                                                              

                                                                                                                              Andrew’s takeaways

                                                                                                                              • Your life is going to be full of ups and downs. You’ve got to manage during your uptimes to have the cushion you need to survive the downtime.
                                                                                                                              • Spend as little as you can and take pride in that. This will keep you happy even during your worst times.
                                                                                                                              
                                                                                                                              

                                                                                                                              Actionable advice

                                                                                                                              Understand how money works. If money’s not coming in, be very cautious of how it’s going out. Put your ego aside and find any possible ways to make money.

                                                                                                                              Matt’s recommendations

                                                                                                                              Matt recommends talking to somebody like a therapist if you’re feeling down or struggling to regularly work through these issues.

                                                                                                                              No.1 goal for the next 12 months

                                                                                                                              Matt’s number one goal for the next 12 months is to adopt the mindset of John Gordon’s simple equation: E+P=O (events plus perspective equals the outcome.)

                                                                                                                              Parting words

                                                                                                                               

                                                                                                                              “I’m giving you your kudos, Andrew. Thank you so much for the opportunity to join you here on this platform. Shout out to everyone that’s listening.”

                                                                                                                              Matt LeBris

                                                                                                                               

                                                                                                                              [spp-transcript]

                                                                                                                               

                                                                                                                              Connect with Matt LeBris

                                                                                                                              • LinkedIn
                                                                                                                              • Twitter
                                                                                                                              • Facebook
                                                                                                                              • Instagram
                                                                                                                              • YouTube
                                                                                                                              • Blog
                                                                                                                              • Podcast
                                                                                                                              
                                                                                                                              

                                                                                                                              Andrew’s books

                                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                              • My Worst Investment Ever
                                                                                                                              • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                              • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                              
                                                                                                                              

                                                                                                                              Andrew’s online programs

                                                                                                                              • Valuation Master Class
                                                                                                                              • The Become a Better Investor Community
                                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                              • Finance Made Ridiculously Simple
                                                                                                                              • FVMR Investing: Quantamental Investing Across the World
                                                                                                                              • Become a Great Presenter and Increase Your Influence
                                                                                                                              • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                              • Achieve Your Goals
                                                                                                                              
                                                                                                                              

                                                                                                                              Connect with Andrew Stotz:

                                                                                                                              • astotz.com
                                                                                                                              • LinkedIn
                                                                                                                              • Facebook
                                                                                                                              • Instagram
                                                                                                                              • Twitter
                                                                                                                              • YouTube
                                                                                                                              • My Worst Investment Ever Podcast
                                                                                                                              
                                                                                                                              

                                                                                                                              Further reading mentioned

                                                                                                                              • T. Harv Eker (October 2009), Secrets of the Millionaire Mind: Mastering the Inner Game of Wealth
                                                                                                                              
                                                                                                                              ]]>2534f61a-6951-4640-bd77-0ccbb619be43Wed, 08 Mar 2023 06:00:00 +070028:58falsefullMatt LeBris is a born and raised NY’er who inevitably caught the hustler’s spirit that fills his hometown streets.Pim van Vliet – Just Because It’s Cheap Doesn’t Mean You Have to Buy ItBIO: Pim van Vliet is Head of Conservative Equities and Chief Quant Strategist at Robeco. He is responsible for a wide range of global, regional, and sustainable low-volatility strategies.

                                                                                                                              STORY: Pim wanted to make more money investing, so he decided to go all in on a cheap stock. He believed the price would eventually go up as it had done a few years back. Unfortunately, the company went bankrupt, and Pim lost 75% of his investment.

                                                                                                                              LEARNING: Don’t be overconfident and over-optimistic when investing. Just because it’s cheap doesn’t mean you have to buy it.

                                                                                                                               

                                                                                                                              “I thought taking risks gives you a return. That’s not always the case. Taking more risk could give you a lower return.”

                                                                                                                              Pim van Vliet

                                                                                                                               

                                                                                                                              Guest profile

                                                                                                                              Pim van Vliet is Head of Conservative Equities and Chief Quant Strategist at Robeco. He is responsible for a wide range of global, regional, and sustainable low-volatility strategies. He specializes in low-volatility investing, asset pricing, and quantitative finance.

                                                                                                                              He is the author of numerous academic research papers and various books.

                                                                                                                              Worst investment ever

                                                                                                                              Pim has been fascinated with money-saving ever since he was a small kid. His father was an entrepreneur who had a family business. Growing up, Pim would sometimes work at the family business and save the money he made in a savings account. He would get good interest. He learned about the compounding of interest in the process. As Pim learned more about saving, he decided to go into a mutual bond fund to earn more return on his money. Now he would make an 8% yield, up from 6%.

                                                                                                                              This was during the 90s when the stock market became increasingly popular. The newspapers started to write more about it. Pim was getting a bit bored by mutual bond funds because he wanted to make more money. Bonds were just very low, volatile, and boring. Being an eager kid, Pim started to follow the news and learned about a Dutch aircraft manufacturer trading for $13. He researched and discovered that the stock price had once been $40, so it was cheap he thought.

                                                                                                                              Pim believed the stock price would return to $40, so he invested in it. His advisor at the bank cautioned him against investing in just one stock. But of course, Pim was overconfident that the stock price would only go up. So he put a sizeable amount of his wealth into this one stock. Then things went sour. The stock price went down and down. The company eventually went bankrupt. Luckily, Pim could get out at $3 but lost 75% of his investment.

                                                                                                                              Lessons learned

                                                                                                                              • Don’t be overconfident and over-optimistic when investing.
                                                                                                                              • It’s more important to protect your downside than to keep your upside.
                                                                                                                              
                                                                                                                              

                                                                                                                              Andrew’s takeaways

                                                                                                                              • Just because it’s cheap doesn’t mean you have to buy it.
                                                                                                                              • Don’t go all in on one stock.
                                                                                                                              • As an individual investor, having more than 10 stocks would be overwhelming. And to have less than five would leave you with too much risk if any of them went bad. So invest in 10 stocks and put stop losses on them.
                                                                                                                              
                                                                                                                              

                                                                                                                              Actionable advice

                                                                                                                              If you’re young, take some risks. Risks allow you to learn even if you don’t get a reward for it in investing. So take some controlled risks with the objective of learning instead of becoming rich.

                                                                                                                              Pim’s recommendations

                                                                                                                              Pim recommends reading good investment books that are time-tested such as Benjamin Graham’s books and Warren Buffet’s philosophy.

                                                                                                                              No.1 goal for the next 12 months

                                                                                                                              Pim van Vliet’s number one goal for the next 12 months is to continue living his dream with his family and colleagues.

                                                                                                                              Parting words

                                                                                                                               

                                                                                                                              “I really enjoyed it. Thanks for having me, Andrew.”

                                                                                                                              Pim van Vliet

                                                                                                                               

                                                                                                                              Connect with Pim van Vliet

                                                                                                                              • LinkedIn
                                                                                                                              • Twitter
                                                                                                                              • Website
                                                                                                                              • Book
                                                                                                                              
                                                                                                                              

                                                                                                                              Andrew’s books

                                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                              • My Worst Investment Ever
                                                                                                                              • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                              • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                              
                                                                                                                              

                                                                                                                              Andrew’s online programs

                                                                                                                              • Valuation Master Class
                                                                                                                              • The Become a Better Investor Community
                                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                              • Finance Made Ridiculously Simple
                                                                                                                              • FVMR Investing: Quantamental Investing Across the World
                                                                                                                              • Become a Great Presenter and Increase Your Influence
                                                                                                                              • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                              • Achieve Your Goals
                                                                                                                              
                                                                                                                              

                                                                                                                              Connect with Andrew Stotz:

                                                                                                                              • astotz.com
                                                                                                                              • LinkedIn
                                                                                                                              • Facebook
                                                                                                                              • Instagram
                                                                                                                              • Twitter
                                                                                                                              • YouTube
                                                                                                                              • My Worst Investment Ever Podcast
                                                                                                                              
                                                                                                                              ]]>BIO: Pim van Vliet is Head of Conservative Equities and Chief Quant Strategist at Robeco. He is responsible for a wide range of global, regional, and sustainable low-volatility strategies.

                                                                                                                              STORY: Pim wanted to make more money investing, so he decided to go all in on a cheap stock. He believed the price would eventually go up as it had done a few years back. Unfortunately, the company went bankrupt, and Pim lost 75% of his investment.

                                                                                                                              LEARNING: Don’t be overconfident and over-optimistic when investing. Just because it’s cheap doesn’t mean you have to buy it.

                                                                                                                               

                                                                                                                              “I thought taking risks gives you a return. That’s not always the case. Taking more risk could give you a lower return.”

                                                                                                                              Pim van Vliet

                                                                                                                               

                                                                                                                              Guest profile

                                                                                                                              Pim van Vliet is Head of Conservative Equities and Chief Quant Strategist at Robeco. He is responsible for a wide range of global, regional, and sustainable low-volatility strategies. He specializes in low-volatility investing, asset pricing, and quantitative finance.

                                                                                                                              He is the author of numerous academic research papers and various books.

                                                                                                                              Worst investment ever

                                                                                                                              Pim has been fascinated with money-saving ever since he was a small kid. His father was an entrepreneur who had a family business. Growing up, Pim would sometimes work at the family business and save the money he made in a savings account. He would get good interest. He learned about the compounding of interest in the process. As Pim learned more about saving, he decided to go into a mutual bond fund to earn more return on his money. Now he would make an 8% yield, up from 6%.

                                                                                                                              This was during the 90s when the stock market became increasingly popular. The newspapers started to write more about it. Pim was getting a bit bored by mutual bond funds because he wanted to make more money. Bonds were just very low, volatile, and boring. Being an eager kid, Pim started to follow the news and learned about a Dutch aircraft manufacturer trading for $13. He researched and discovered that the stock price had once been $40, so it was cheap he thought.

                                                                                                                              Pim believed the stock price would return to $40, so he invested in it. His advisor at the bank cautioned him against investing in just one stock. But of course, Pim was overconfident that the stock price would only go up. So he put a sizeable amount of his wealth into this one stock. Then things went sour. The stock price went down and down. The company eventually went bankrupt. Luckily, Pim could get out at $3 but lost 75% of his investment.

                                                                                                                              Lessons learned

                                                                                                                              • Don’t be overconfident and over-optimistic when investing.
                                                                                                                              • It’s more important to protect your downside than to keep your upside.
                                                                                                                              
                                                                                                                              

                                                                                                                              Andrew’s takeaways

                                                                                                                              • Just because it’s cheap doesn’t mean you have to buy it.
                                                                                                                              • Don’t go all in on one stock.
                                                                                                                              • As an individual investor, having more than 10 stocks would be overwhelming. And to have less than five would leave you with too much risk if any of them went bad. So invest in 10 stocks and put stop losses on them.
                                                                                                                              
                                                                                                                              

                                                                                                                              Actionable advice

                                                                                                                              If you’re young, take some risks. Risks allow you to learn even if you don’t get a reward for it in investing. So take some controlled risks with the objective of learning instead of becoming rich.

                                                                                                                              Pim’s recommendations

                                                                                                                              Pim recommends reading good investment books that are time-tested such as Benjamin Graham’s books and Warren Buffet’s philosophy.

                                                                                                                              No.1 goal for the next 12 months

                                                                                                                              Pim van Vliet’s number one goal for the next 12 months is to continue living his dream with his family and colleagues.

                                                                                                                              Parting words

                                                                                                                               

                                                                                                                              “I really enjoyed it. Thanks for having me, Andrew.”

                                                                                                                              Pim van Vliet

                                                                                                                               

                                                                                                                              Connect with Pim van Vliet

                                                                                                                              • LinkedIn
                                                                                                                              • Twitter
                                                                                                                              • Website
                                                                                                                              • Book
                                                                                                                              
                                                                                                                              

                                                                                                                              Andrew’s books

                                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                              • My Worst Investment Ever
                                                                                                                              • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                              • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                              
                                                                                                                              

                                                                                                                              Andrew’s online programs

                                                                                                                              • Valuation Master Class
                                                                                                                              • The Become a Better Investor Community
                                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                              • Finance Made Ridiculously Simple
                                                                                                                              • FVMR Investing: Quantamental Investing Across the World
                                                                                                                              • Become a Great Presenter and Increase Your Influence
                                                                                                                              • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                              • Achieve Your Goals
                                                                                                                              
                                                                                                                              

                                                                                                                              Connect with Andrew Stotz:

                                                                                                                              • astotz.com
                                                                                                                              • LinkedIn
                                                                                                                              • Facebook
                                                                                                                              • Instagram
                                                                                                                              • Twitter
                                                                                                                              • YouTube
                                                                                                                              • My Worst Investment Ever Podcast
                                                                                                                              
                                                                                                                              ]]>75f5b83a-16b1-4ee2-8491-104f32518464Mon, 06 Mar 2023 06:00:00 +070042:26falsefullPim van Vliet is Head of Conservative Equities and Chief Quant Strategist at Robeco. He is responsible for a wide range of global, regional, and sustainable low-volatility strategies.ISMS 7: Financials, Cons. Disc., and Utilities Sectors Look Most InterestingIn this presentation, I will introduce you to our MSCI Sectors and their attractiveness

                                                                                                                              Click here to get the PDF with all charts and graphs

                                                                                                                              What do you think: Which of the global sectors is most attractive?

                                                                                                                              We use GICS sector classification

                                                                                                                              • GICS The Global Industry Classification Standard (GICS®) is an industry classification system developed by Standard & Poor’s Financial Services LLC (S&P) and MSCI in 1999
                                                                                                                              • GICS works well for the global financial community
                                                                                                                              
                                                                                                                              

                                                                                                                              MSCI separates stocks into 11 different sectors

                                                                                                                              • Energy, Materials, Industrials, Consumer Discretionary, Consumer Staples, Health Care, Financials, Information Technology, Communication Services, Utilities, and Real Estate
                                                                                                                              
                                                                                                                              

                                                                                                                              Then 25 Industry groups

                                                                                                                              • Some sectors such as Industrials have three Industry groups as follows:
                                                                                                                              • Capital Goods
                                                                                                                              • Commercial & Professional Services
                                                                                                                              • Transportation
                                                                                                                              
                                                                                                                              

                                                                                                                              There are 74 industries

                                                                                                                              • Within Transportation Industry Group there are five main Industries
                                                                                                                              • 1) Air Freight & Logistics, 2) Passenger Airlines, 3) Marine Transportation, 4) Ground Transportation, and 5) Transportation Infrastructure
                                                                                                                              
                                                                                                                              

                                                                                                                              There are 163 Sub-Industries

                                                                                                                              • Finally, within the Industrials Sector, the Transportation Industry group, the Transportation Infrastructure Industry, are 3 Sub-Industries
                                                                                                                              • 1) Airport Services, 2) Highways & Railtracks, and 3) Marine Ports & Services
                                                                                                                              
                                                                                                                              

                                                                                                                              GICS sectors include 1,508 Developed Market companies, total market cap is about US$53trn

                                                                                                                              • The largest sector is Info. Tech. at US$11trn market cap and consists of 183 companies
                                                                                                                              • The smallest is Real Estate with a market cap of US$1.5trn and 96 companies
                                                                                                                              
                                                                                                                              

                                                                                                                              What is your investment framework?

                                                                                                                              • Our investment strategies for ETFs and stocks come from our FVMR framework
                                                                                                                              • We backtest and optimize the strategy for the factors that have worked best in each market
                                                                                                                              
                                                                                                                              

                                                                                                                              We do all our research in-house

                                                                                                                              • We don’t rely on other people’s research
                                                                                                                              • We might of course get ideas from others, but we then test those ideas in our FVMR framework
                                                                                                                              
                                                                                                                              

                                                                                                                              The benefit of an investment framework is that it forces discipline when emotions run high

                                                                                                                              • Emotions from wild market events can cause you to make rash and costly decisions
                                                                                                                              • To avoid this, stick to a framework
                                                                                                                              • Our framework relies on data & structure, not just a feeling or opinion
                                                                                                                              
                                                                                                                              

                                                                                                                              Management

                                                                                                                              • Is responsible for producing earnings
                                                                                                                              
                                                                                                                              

                                                                                                                              Investors

                                                                                                                              • Set the price the company trades at
                                                                                                                              
                                                                                                                              

                                                                                                                              There are 4 Elements to our FVMR framework

                                                                                                                              • Fundamentals: Strong profitability shows a company is managed well.
                                                                                                                              • We prefer high or rising profitability.
                                                                                                                              • Valuation: Shows how the market perceives the stock.
                                                                                                                              • We prefer good fundamentals at relatively cheap valuations.
                                                                                                                              • Momentum: We try to avoid “value traps” by looking for positive price and earnings momentum.
                                                                                                                              • At times, low momentum signals an out-of-favor opportunity.
                                                                                                                              • Risk: We prefer low business and price risk.
                                                                                                                              • Not every stock is going to fly; some just provide stable returns and strong dividends.
                                                                                                                              
                                                                                                                              

                                                                                                                              Fundamentals

                                                                                                                              Info. Tech has a 23% ROE; Health Care, Cons. Staples, and Energy are each earning 20% ROE

                                                                                                                              • 15% average is higher than the long-term average of 12%
                                                                                                                              
                                                                                                                              

                                                                                                                              Info. Tech. has a strong 16% net margin

                                                                                                                              • The current market average net margin of 10% is still much higher than the long-term average of about 6%
                                                                                                                              • 5 sectors have 7-8% net margin
                                                                                                                              
                                                                                                                              

                                                                                                                              What you have learned

                                                                                                                              • Even after difficult times, Info. Tech. still has a high 23% ROE and a strong 16% net margin
                                                                                                                              • Health Care, Cons. Staples, and Energy are each earning strong 20% ROE
                                                                                                                              • Average ROE is 15%, higher than 12% LT average
                                                                                                                              • The current average net margin of 10% is much higher than the LT average of about 6%
                                                                                                                              • Info. Tech and Health Care are most profitable
                                                                                                                              
                                                                                                                              

                                                                                                                              Valuation

                                                                                                                              24x PE for Info Tech. is highest; Financials at 11x and Energy at 8x are the cheapest

                                                                                                                              • Financials look interesting at this level
                                                                                                                              • Generally, you buy cyclical energy and materials sectors when PE is high which is when earnings are at the bottom of the cycle
                                                                                                                              
                                                                                                                              

                                                                                                                              Info. Tech. is crazy expensive at 5.4x PB, Cons. Staples and Health Care are also expensive

                                                                                                                              • Financials look attractive
                                                                                                                              
                                                                                                                              

                                                                                                                              Even after adjusting for cash, Info. Tech companies are fixed asset light

                                                                                                                              Expensive Info. Tech., Health Care, and Cons. Staples; cheap Comm. Services and Financials

                                                                                                                              Five sectors are yielding more than 3%, signaling they are potentially cheap

                                                                                                                              • Financials look interesting
                                                                                                                              
                                                                                                                              

                                                                                                                              Financials are most attractive, Info. Tech. and Real Estate least

                                                                                                                              What you have learned

                                                                                                                              • 24x PE for Info Tech. is highest; Financials at 11x and Energy at 8x are the cheapest
                                                                                                                              • Financials look interesting at this level
                                                                                                                              • Buy cyclical energy and materials when PE is high
                                                                                                                              • Info. Tech. is crazy expensive at 5.4x PB, Cons. Staples and Health Care are also expensive
                                                                                                                              • Five sectors are yielding more than 3%, signaling some are potentially cheap
                                                                                                                              
                                                                                                                              

                                                                                                                              Momentum

                                                                                                                              2023 revenue growth expectations are a low 2%, highest is Cons. Disc., lowest is Energy

                                                                                                                              2023 consensus earnings growth flat, up at Financials, Cons. Disc., and Utilities

                                                                                                                              Best 6-mth price momentum at defensive sectors: Health Care, Cons. Staples, and Utilities

                                                                                                                              • Real Estate has been hit hard from Fed rate hikes
                                                                                                                              
                                                                                                                              

                                                                                                                              Info. Tech., Energy, and Materials are best 3-year performers, Real Estate worst

                                                                                                                              What you have learned

                                                                                                                              • Low 2023 revenue growth expected highest growth at Cons. Disc., is Energy
                                                                                                                              • 2023 consensus earnings growth flat, up at Financials, Cons. Disc., and Utilities
                                                                                                                              • Best 6-mth price momentum at defensive sectors: Health Care, Cons. Staples, and Utilities
                                                                                                                              • Info. Tech., Energy, and Materials are best 3-year performers, Real Estate worst
                                                                                                                              
                                                                                                                              

                                                                                                                              Financials, Cons. Disc., and Utilities look interesting

                                                                                                                              • Financials - Cheap and good momentum
                                                                                                                              • Cons. Disc. - Strong earnings momentum
                                                                                                                              • Utilities - Weak fundamentals, but cheap and good earnings and price momo
                                                                                                                              
                                                                                                                              

                                                                                                                              Info. Tech, Health Care, and Cons. Stapes strong, but expensive

                                                                                                                              • Info. Tech. - Strong fundamentals but expensive
                                                                                                                              • Health Care - Strong fundamentals and price momo, but expensive
                                                                                                                              • Cons. Staples - Strong fundamentals and price momo, but expensive
                                                                                                                              
                                                                                                                              

                                                                                                                              Energy and Materials appear cheap…but

                                                                                                                              • For cyclicals we usually buy when expensive
                                                                                                                              
                                                                                                                              

                                                                                                                              Key points and the bottom line

                                                                                                                              • Financials, Cons. Disc., and Utilities look interesting
                                                                                                                              • Info. Tech, Health Care, and Cons. Stapes strong, but expensive
                                                                                                                              • Energy and Materials appear cheap we usually buy them when expensive
                                                                                                                              
                                                                                                                              

                                                                                                                              Click here to get the PDF with all charts and graphs

                                                                                                                               

                                                                                                                              Andrew’s books

                                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                              • My Worst Investment Ever
                                                                                                                              • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                              • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                              
                                                                                                                              

                                                                                                                              Andrew’s online programs

                                                                                                                              • Valuation Master Class
                                                                                                                              • The Become a Better Investor Community
                                                                                                                              • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                              • Finance Made Ridiculously Simple
                                                                                                                              • FVMR Investing: Quantamental Investing Across the World
                                                                                                                              • Become a Great Presenter and Increase Your...]]>In this presentation, I will introduce you to our MSCI Sectors and their attractiveness

                                                                                                                                Click here to get the PDF with all charts and graphs

                                                                                                                                What do you think: Which of the global sectors is most attractive?

                                                                                                                                We use GICS sector classification

                                                                                                                                • GICS The Global Industry Classification Standard (GICS®) is an industry classification system developed by Standard & Poor’s Financial Services LLC (S&P) and MSCI in 1999
                                                                                                                                • GICS works well for the global financial community
                                                                                                                                
                                                                                                                                

                                                                                                                                MSCI separates stocks into 11 different sectors

                                                                                                                                • Energy, Materials, Industrials, Consumer Discretionary, Consumer Staples, Health Care, Financials, Information Technology, Communication Services, Utilities, and Real Estate
                                                                                                                                
                                                                                                                                

                                                                                                                                Then 25 Industry groups

                                                                                                                                • Some sectors such as Industrials have three Industry groups as follows:
                                                                                                                                • Capital Goods
                                                                                                                                • Commercial & Professional Services
                                                                                                                                • Transportation
                                                                                                                                
                                                                                                                                

                                                                                                                                There are 74 industries

                                                                                                                                • Within Transportation Industry Group there are five main Industries
                                                                                                                                • 1) Air Freight & Logistics, 2) Passenger Airlines, 3) Marine Transportation, 4) Ground Transportation, and 5) Transportation Infrastructure
                                                                                                                                
                                                                                                                                

                                                                                                                                There are 163 Sub-Industries

                                                                                                                                • Finally, within the Industrials Sector, the Transportation Industry group, the Transportation Infrastructure Industry, are 3 Sub-Industries
                                                                                                                                • 1) Airport Services, 2) Highways & Railtracks, and 3) Marine Ports & Services
                                                                                                                                
                                                                                                                                

                                                                                                                                GICS sectors include 1,508 Developed Market companies, total market cap is about US$53trn

                                                                                                                                • The largest sector is Info. Tech. at US$11trn market cap and consists of 183 companies
                                                                                                                                • The smallest is Real Estate with a market cap of US$1.5trn and 96 companies
                                                                                                                                
                                                                                                                                

                                                                                                                                What is your investment framework?

                                                                                                                                • Our investment strategies for ETFs and stocks come from our FVMR framework
                                                                                                                                • We backtest and optimize the strategy for the factors that have worked best in each market
                                                                                                                                
                                                                                                                                

                                                                                                                                We do all our research in-house

                                                                                                                                • We don’t rely on other people’s research
                                                                                                                                • We might of course get ideas from others, but we then test those ideas in our FVMR framework
                                                                                                                                
                                                                                                                                

                                                                                                                                The benefit of an investment framework is that it forces discipline when emotions run high

                                                                                                                                • Emotions from wild market events can cause you to make rash and costly decisions
                                                                                                                                • To avoid this, stick to a framework
                                                                                                                                • Our framework relies on data & structure, not just a feeling or opinion
                                                                                                                                
                                                                                                                                

                                                                                                                                Management

                                                                                                                                • Is responsible for producing earnings
                                                                                                                                
                                                                                                                                

                                                                                                                                Investors

                                                                                                                                • Set the price the company trades at
                                                                                                                                
                                                                                                                                

                                                                                                                                There are 4 Elements to our FVMR framework

                                                                                                                                • Fundamentals: Strong profitability shows a company is managed well.
                                                                                                                                • We prefer high or rising profitability.
                                                                                                                                • Valuation: Shows how the market perceives the stock.
                                                                                                                                • We prefer good fundamentals at relatively cheap valuations.
                                                                                                                                • Momentum: We try to avoid “value traps” by looking for positive price and earnings momentum.
                                                                                                                                • At times, low momentum signals an out-of-favor opportunity.
                                                                                                                                • Risk: We prefer low business and price risk.
                                                                                                                                • Not every stock is going to fly; some just provide stable returns and strong dividends.
                                                                                                                                
                                                                                                                                

                                                                                                                                Fundamentals

                                                                                                                                Info. Tech has a 23% ROE; Health Care, Cons. Staples, and Energy are each earning 20% ROE

                                                                                                                                • 15% average is higher than the long-term average of 12%
                                                                                                                                
                                                                                                                                

                                                                                                                                Info. Tech. has a strong 16% net margin

                                                                                                                                • The current market average net margin of 10% is still much higher than the long-term average of about 6%
                                                                                                                                • 5 sectors have 7-8% net margin
                                                                                                                                
                                                                                                                                

                                                                                                                                What you have learned

                                                                                                                                • Even after difficult times, Info. Tech. still has a high 23% ROE and a strong 16% net margin
                                                                                                                                • Health Care, Cons. Staples, and Energy are each earning strong 20% ROE
                                                                                                                                • Average ROE is 15%, higher than 12% LT average
                                                                                                                                • The current average net margin of 10% is much higher than the LT average of about 6%
                                                                                                                                • Info. Tech and Health Care are most profitable
                                                                                                                                
                                                                                                                                

                                                                                                                                Valuation

                                                                                                                                24x PE for Info Tech. is highest; Financials at 11x and Energy at 8x are the cheapest

                                                                                                                                • Financials look interesting at this level
                                                                                                                                • Generally, you buy cyclical energy and materials sectors when PE is high which is when earnings are at the bottom of the cycle
                                                                                                                                
                                                                                                                                

                                                                                                                                Info. Tech. is crazy expensive at 5.4x PB, Cons. Staples and Health Care are also expensive

                                                                                                                                • Financials look attractive
                                                                                                                                
                                                                                                                                

                                                                                                                                Even after adjusting for cash, Info. Tech companies are fixed asset light

                                                                                                                                Expensive Info. Tech., Health Care, and Cons. Staples; cheap Comm. Services and Financials

                                                                                                                                Five sectors are yielding more than 3%, signaling they are potentially cheap

                                                                                                                                • Financials look interesting
                                                                                                                                
                                                                                                                                

                                                                                                                                Financials are most attractive, Info. Tech. and Real Estate least

                                                                                                                                What you have learned

                                                                                                                                • 24x PE for Info Tech. is highest; Financials at 11x and Energy at 8x are the cheapest
                                                                                                                                • Financials look interesting at this level
                                                                                                                                • Buy cyclical energy and materials when PE is high
                                                                                                                                • Info. Tech. is crazy expensive at 5.4x PB, Cons. Staples and Health Care are also expensive
                                                                                                                                • Five sectors are yielding more than 3%, signaling some are potentially cheap
                                                                                                                                
                                                                                                                                

                                                                                                                                Momentum

                                                                                                                                2023 revenue growth expectations are a low 2%, highest is Cons. Disc., lowest is Energy

                                                                                                                                2023 consensus earnings growth flat, up at Financials, Cons. Disc., and Utilities

                                                                                                                                Best 6-mth price momentum at defensive sectors: Health Care, Cons. Staples, and Utilities

                                                                                                                                • Real Estate has been hit hard from Fed rate hikes
                                                                                                                                
                                                                                                                                

                                                                                                                                Info. Tech., Energy, and Materials are best 3-year performers, Real Estate worst

                                                                                                                                What you have learned

                                                                                                                                • Low 2023 revenue growth expected highest growth at Cons. Disc., is Energy
                                                                                                                                • 2023 consensus earnings growth flat, up at Financials, Cons. Disc., and Utilities
                                                                                                                                • Best 6-mth price momentum at defensive sectors: Health Care, Cons. Staples, and Utilities
                                                                                                                                • Info. Tech., Energy, and Materials are best 3-year performers, Real Estate worst
                                                                                                                                
                                                                                                                                

                                                                                                                                Financials, Cons. Disc., and Utilities look interesting

                                                                                                                                • Financials - Cheap and good momentum
                                                                                                                                • Cons. Disc. - Strong earnings momentum
                                                                                                                                • Utilities - Weak fundamentals, but cheap and good earnings and price momo
                                                                                                                                
                                                                                                                                

                                                                                                                                Info. Tech, Health Care, and Cons. Stapes strong, but expensive

                                                                                                                                • Info. Tech. - Strong fundamentals but expensive
                                                                                                                                • Health Care - Strong fundamentals and price momo, but expensive
                                                                                                                                • Cons. Staples - Strong fundamentals and price momo, but expensive
                                                                                                                                
                                                                                                                                

                                                                                                                                Energy and Materials appear cheap…but

                                                                                                                                • For cyclicals we usually buy when expensive
                                                                                                                                
                                                                                                                                

                                                                                                                                Key points and the bottom line

                                                                                                                                • Financials, Cons. Disc., and Utilities look interesting
                                                                                                                                • Info. Tech, Health Care, and Cons. Stapes strong, but expensive
                                                                                                                                • Energy and Materials appear cheap we usually buy them when expensive
                                                                                                                                
                                                                                                                                

                                                                                                                                Click here to get the PDF with all charts and graphs

                                                                                                                                 

                                                                                                                                Andrew’s books

                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • My Worst Investment Ever
                                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s online programs

                                                                                                                                • Valuation Master Class
                                                                                                                                • The Become a Better Investor Community
                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                                • Achieve Your Goals
                                                                                                                                
                                                                                                                                

                                                                                                                                Connect with Andrew Stotz:

                                                                                                                                • astotz.com
                                                                                                                                • LinkedIn
                                                                                                                                • Facebook
                                                                                                                                • Instagram
                                                                                                                                • Twitter
                                                                                                                                • YouTube
                                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                                
                                                                                                                                ]]>0c29784d-6890-43c6-b765-bfbdde897327Fri, 03 Mar 2023 06:00:00 +070014:52falsefullIn this presentation, I will introduce you to our MSCI Sectors and their attractiveness. What do you think: Which of the global sectors is most attractive?Logan Nathan – Your Supplier Is an Extension of Your Business, Not an OutsiderBIO: Logan Nathan is the founder and CEO at i4T Global. He’s a digital transformation specialist, a serial startup entrepreneur, a board director and advisor, and an angel investor.

                                                                                                                                STORY: Logan offers time-tested advice on how to launch a successful software product.

                                                                                                                                LEARNING: Focus on customer experience and satisfaction to win confidence.

                                                                                                                                 

                                                                                                                                “The culture within you as a supplier is vital in building trust with your client.”

                                                                                                                                Logan Nathan

                                                                                                                                 

                                                                                                                                Guest profile

                                                                                                                                Logan Nathan is the founder and CEO at i4T Global. He’s a digital transformation specialist, a serial startup entrepreneur, a board director and advisor, and an angel investor.

                                                                                                                                We won’t discuss Logan’s worst investment story in today’s episode because he shared that in Ep374: Your Solutions Are with Your Advocates Talk to Them. Today we’ll discuss what’s been happening with his business over the last few years. He’ll also offer time-tested advice on how to launch a successful software product.

                                                                                                                                Logan’s business—i4T Global—provides a Field Services Management platform for people or companies that manage property assets on behalf of their clients. The platform automates most of the work creating efficiency, compliance, and safety easier. In doing so, it brings more tenants.

                                                                                                                                How to hire and work with the right developers

                                                                                                                                If you’re looking to hire a developer/s for your new software, Logan’s advice is to go to credible supplier platforms, such as LinkedIn. Here, you can independently verify client testimonials of various developers. This will help you ascertain whether they can do what they claim to do.

                                                                                                                                Secondly, before you hire a developer, ensure you make them understand your business requirements, not just your technical needs. Agree on what happens if you don’t get what you want, how changes will be made, and the penalty for not delivering on the agreed deliverables.

                                                                                                                                A frank conversation with the supplier about current and future business requirements is crucial. Agree on what should happen as your business grows and requirements change. Will the supplier grow with you? Do they have the agility to deliver what your business needs promptly?

                                                                                                                                Focus on the customer experience and satisfaction

                                                                                                                                Logan believes delivering top-notch customer experience is the key to running a successful software business. His advice is to have a process that allows you to fully understand the customer’s requirements and deliver them as requested. To achieve this, you need a communication channel that collects customer feedback regularly.

                                                                                                                                To continuously offer services that fulfill your customers’ requirements, you need to understand the changes in your industry. Then reiterate to provide more benefits, even if your customer hasn’t requested them.

                                                                                                                                How to win the confidence of your customers

                                                                                                                                Building a relationship with your client will guarantee you a return customer. The best way to build a relationship is to win their confidence by delivering your value proposition. When a customer requests for a piece of change—which will happen often—document the request, understand the business requirement and then deliver it on time, every time. Doing this will show the client you’re reliable and want to stay with you long-term.

                                                                                                                                Andrew’s takeaways

                                                                                                                                • Create a minimum viable product (your SaaS product), have a feedback mechanism from the customer, and then ensure all feedback is dealt with promptly so your customer can have a smooth experience with your product.
                                                                                                                                • When looking for suppliers, first try to independently verify their processes. When you find a supplier you’d like to work with, ensure they understand your business requirements and deliverables.
                                                                                                                                
                                                                                                                                

                                                                                                                                Actionable advice

                                                                                                                                • Make sure your supplier understands your business service level requirements.
                                                                                                                                • Ensure any business you’re dealing with has a culture of fully understanding business deliverables before developing the code.
                                                                                                                                
                                                                                                                                

                                                                                                                                No.1 goal for the next 12 months

                                                                                                                                Logan’s number one goal for the next 12 months is to focus on global growth. This means the organization needs to understand different cultures, how to deliver to different time zones, and stay efficient to minimize costs while providing clients with maximum value around the clock.

                                                                                                                                Parting words

                                                                                                                                 

                                                                                                                                “Your supplier is your heartbeat in terms of delivering your products to your clients. So keep them as an extension of your business, not as an outsider that’s there to just deliver a piece of work.”

                                                                                                                                Logan Nathan

                                                                                                                                 

                                                                                                                                [spp-transcript]

                                                                                                                                 

                                                                                                                                Connect with Logan Nathan

                                                                                                                                • LinkedIn
                                                                                                                                • Twitter
                                                                                                                                • Website
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s books

                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • My Worst Investment Ever
                                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s online programs

                                                                                                                                • Valuation Master Class
                                                                                                                                • The Become a Better Investor Community
                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                                • Achieve Your Goals
                                                                                                                                
                                                                                                                                

                                                                                                                                Connect with Andrew Stotz:

                                                                                                                                • astotz.com
                                                                                                                                • LinkedIn
                                                                                                                                • Facebook
                                                                                                                                • Instagram
                                                                                                                                • Twitter
                                                                                                                                • YouTube
                                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                                
                                                                                                                                ]]>BIO: Logan Nathan is the founder and CEO at i4T Global. He’s a digital transformation specialist, a serial startup entrepreneur, a board director and advisor, and an angel investor.

                                                                                                                                STORY: Logan offers time-tested advice on how to launch a successful software product.

                                                                                                                                LEARNING: Focus on customer experience and satisfaction to win confidence.

                                                                                                                                 

                                                                                                                                “The culture within you as a supplier is vital in building trust with your client.”

                                                                                                                                Logan Nathan

                                                                                                                                 

                                                                                                                                Guest profile

                                                                                                                                Logan Nathan is the founder and CEO at i4T Global. He’s a digital transformation specialist, a serial startup entrepreneur, a board director and advisor, and an angel investor.

                                                                                                                                We won’t discuss Logan’s worst investment story in today’s episode because he shared that in Ep374: Your Solutions Are with Your Advocates Talk to Them. Today we’ll discuss what’s been happening with his business over the last few years. He’ll also offer time-tested advice on how to launch a successful software product.

                                                                                                                                Logan’s business—i4T Global—provides a Field Services Management platform for people or companies that manage property assets on behalf of their clients. The platform automates most of the work creating efficiency, compliance, and safety easier. In doing so, it brings more tenants.

                                                                                                                                How to hire and work with the right developers

                                                                                                                                If you’re looking to hire a developer/s for your new software, Logan’s advice is to go to credible supplier platforms, such as LinkedIn. Here, you can independently verify client testimonials of various developers. This will help you ascertain whether they can do what they claim to do.

                                                                                                                                Secondly, before you hire a developer, ensure you make them understand your business requirements, not just your technical needs. Agree on what happens if you don’t get what you want, how changes will be made, and the penalty for not delivering on the agreed deliverables.

                                                                                                                                A frank conversation with the supplier about current and future business requirements is crucial. Agree on what should happen as your business grows and requirements change. Will the supplier grow with you? Do they have the agility to deliver what your business needs promptly?

                                                                                                                                Focus on the customer experience and satisfaction

                                                                                                                                Logan believes delivering top-notch customer experience is the key to running a successful software business. His advice is to have a process that allows you to fully understand the customer’s requirements and deliver them as requested. To achieve this, you need a communication channel that collects customer feedback regularly.

                                                                                                                                To continuously offer services that fulfill your customers’ requirements, you need to understand the changes in your industry. Then reiterate to provide more benefits, even if your customer hasn’t requested them.

                                                                                                                                How to win the confidence of your customers

                                                                                                                                Building a relationship with your client will guarantee you a return customer. The best way to build a relationship is to win their confidence by delivering your value proposition. When a customer requests for a piece of change—which will happen often—document the request, understand the business requirement and then deliver it on time, every time. Doing this will show the client you’re reliable and want to stay with you long-term.

                                                                                                                                Andrew’s takeaways

                                                                                                                                • Create a minimum viable product (your SaaS product), have a feedback mechanism from the customer, and then ensure all feedback is dealt with promptly so your customer can have a smooth experience with your product.
                                                                                                                                • When looking for suppliers, first try to independently verify their processes. When you find a supplier you’d like to work with, ensure they understand your business requirements and deliverables.
                                                                                                                                
                                                                                                                                

                                                                                                                                Actionable advice

                                                                                                                                • Make sure your supplier understands your business service level requirements.
                                                                                                                                • Ensure any business you’re dealing with has a culture of fully understanding business deliverables before developing the code.
                                                                                                                                
                                                                                                                                

                                                                                                                                No.1 goal for the next 12 months

                                                                                                                                Logan’s number one goal for the next 12 months is to focus on global growth. This means the organization needs to understand different cultures, how to deliver to different time zones, and stay efficient to minimize costs while providing clients with maximum value around the clock.

                                                                                                                                Parting words

                                                                                                                                 

                                                                                                                                “Your supplier is your heartbeat in terms of delivering your products to your clients. So keep them as an extension of your business, not as an outsider that’s there to just deliver a piece of work.”

                                                                                                                                Logan Nathan

                                                                                                                                 

                                                                                                                                [spp-transcript]

                                                                                                                                 

                                                                                                                                Connect with Logan Nathan

                                                                                                                                • LinkedIn
                                                                                                                                • Twitter
                                                                                                                                • Website
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s books

                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • My Worst Investment Ever
                                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s online programs

                                                                                                                                • Valuation Master Class
                                                                                                                                • The Become a Better Investor Community
                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                                • Achieve Your Goals
                                                                                                                                
                                                                                                                                

                                                                                                                                Connect with Andrew Stotz:

                                                                                                                                • astotz.com
                                                                                                                                • LinkedIn
                                                                                                                                • Facebook
                                                                                                                                • Instagram
                                                                                                                                • Twitter
                                                                                                                                • YouTube
                                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                                
                                                                                                                                ]]>1a359627-f5f4-46da-a48e-1b2491819256Thu, 02 Mar 2023 06:00:00 +070030:35falsefullLogan Nathan is the founder and CEO at i4T Global. He’s a digital transformation specialist, a serial startup entrepreneur, a board director and advisor, and an angel investor.Louis-Vincent Gave – Your Success Comes Down to Portfolio SizingBIO: Louis-Vincent Gave is the Chief Executive Officer of Gavekal, a Hong Kong-based company he co-founded over 20 years ago with his father, Charles, and Anatole Kaletsky.

                                                                                                                                STORY: Louis’s father invested one million dollars in a portfolio of 10 Asian companies. Louis was managing this portfolio, whose size was disproportionate to his earnings. He was earning $50,000 annually at the time and had never owned a portfolio this big, which made him sick.

                                                                                                                                LEARNING: Portfolio sizing matters tremendously. Never under or over-position yourself. Invest with people who have experience.

                                                                                                                                 

                                                                                                                                “Know your own weaknesses and don’t put yourself in a situation that plays to those weaknesses.”

                                                                                                                                Louis-Vincent Gave

                                                                                                                                 

                                                                                                                                Guest profile

                                                                                                                                Louis-Vincent Gave is the Chief Executive Officer of Gavekal, a Hong Kong-based company he co-founded over 20 years ago with his father, Charles, and Anatole Kaletsky. Gavekal has grown to become one of the world’s leading independent research providers to institutional investors around the globe. Louis has written seven books. His latest, Avoiding The Punch, published in 2021, deals with the challenges of building resilient portfolios in inflationary times.

                                                                                                                                The real challenge of venturing into China

                                                                                                                                Before getting down to Louis’s worst investment ever, he spoke to us about his strategy to build a market for his company in the Chinese market. His company, Gavekal, has operated successfully for over 20 years.

                                                                                                                                When Louis started Gavekal in Hong Kong in the early 2000s, it was evident that China would be a massive factor in the global economy. There was a huge gap in understanding China’s role in the world and people’s understanding of it. Louis and his father figured they could try to monetize that gap. So they started an independent research firm. It was a macro research firm but with a strong China angle. Louis has tried to build up his expertise in China over the years.

                                                                                                                                According to Louis, the real challenge in China is always getting a clear picture. Many foreign investors don’t trust the available data.

                                                                                                                                How to succeed in the Chinese market

                                                                                                                                Louis says that the important thing for a foreign investor eyeing the Chinese market is to put things into context. You need to relate the economic data and the policy pronouncements to what you hear from corporations.

                                                                                                                                So when Louis and his father entered the market, they talked to the corporates and policymakers to put together a picture that was as close to the truth as possible.

                                                                                                                                Worst investment ever

                                                                                                                                Louis grew up very privileged. His dad had been a very successful money manager and had made much money selling his firm to Alliance capital in the mid-90s. After the sale, he retired. At the time, Louis was in Asia when the Asian crisis hit, and everything went bust. Louis’s dad called and told him he wanted to invest a million dollars in 10 high-quality blue-chip Asian companies. This was in August 1998.

                                                                                                                                Louis earned $50,000 a year, so managing a one-million-dollar portfolio was a huge deal for him. Between August and October, the portfolio fell by 60%. Louis was literally sick of looking at these positions where, on every individual position, he was losing more than his annual salary. Then between October and December, the market started stabilizing. By March, the portfolio was actually making money. Louis was keen to take it off while it was making money.

                                                                                                                                Because the portfolio size was so disproportionate to Louis’s earnings, he was not sleeping for days on end.

                                                                                                                                Lessons learned

                                                                                                                                • Portfolio sizing matters tremendously.
                                                                                                                                • Never under or over-position yourself.
                                                                                                                                • Be clear about what your risk tolerance is on individual positions.
                                                                                                                                • Know yourself as an investor.
                                                                                                                                • Don’t be driven by emotions.
                                                                                                                                • You don’t trade against the market. You trade against yourself.
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s takeaways

                                                                                                                                • Invest with people who have experience.
                                                                                                                                
                                                                                                                                

                                                                                                                                Actionable advice

                                                                                                                                If you’re starting off, start small. Figure out what you’re good at and what you’re not. There’s no magic formula. The most important thing is knowing your weaknesses and not putting yourself in a situation that plays to those weaknesses.

                                                                                                                                Louis’s recommendations

                                                                                                                                Louis recommends subscribing to Gavekal’s free newsletter to learn more about investing. He also recommends reading Kevin Muir, who writes The Macro Tourist, to learn how to keep your emotions in check,

                                                                                                                                No.1 goal for the next 12 months

                                                                                                                                Louis’s number one goal for the next 12 months is to figure out the best way to play emerging markets and survive.

                                                                                                                                Parting words

                                                                                                                                 

                                                                                                                                “Thanks a bunch for having me.”

                                                                                                                                Louis-Vincent Gave

                                                                                                                                 

                                                                                                                                [spp-transcript]

                                                                                                                                 

                                                                                                                                Connect with Louis-Vincent Gave

                                                                                                                                • LinkedIn
                                                                                                                                • Twitter
                                                                                                                                • Website
                                                                                                                                • Books
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s books

                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • My Worst Investment Ever
                                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s online programs

                                                                                                                                • Valuation Master Class
                                                                                                                                • The Become a Better Investor Community
                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                                • Achieve Your Goals
                                                                                                                                
                                                                                                                                

                                                                                                                                Connect with Andrew Stotz:

                                                                                                                                • astotz.com
                                                                                                                                • LinkedIn
                                                                                                                                • Facebook
                                                                                                                                • Instagram
                                                                                                                                • Twitter
                                                                                                                                • YouTube
                                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                                
                                                                                                                                ]]>BIO: Louis-Vincent Gave is the Chief Executive Officer of Gavekal, a Hong Kong-based company he co-founded over 20 years ago with his father, Charles, and Anatole Kaletsky.

                                                                                                                                STORY: Louis’s father invested one million dollars in a portfolio of 10 Asian companies. Louis was managing this portfolio, whose size was disproportionate to his earnings. He was earning $50,000 annually at the time and had never owned a portfolio this big, which made him sick.

                                                                                                                                LEARNING: Portfolio sizing matters tremendously. Never under or over-position yourself. Invest with people who have experience.

                                                                                                                                 

                                                                                                                                “Know your own weaknesses and don’t put yourself in a situation that plays to those weaknesses.”

                                                                                                                                Louis-Vincent Gave

                                                                                                                                 

                                                                                                                                Guest profile

                                                                                                                                Louis-Vincent Gave is the Chief Executive Officer of Gavekal, a Hong Kong-based company he co-founded over 20 years ago with his father, Charles, and Anatole Kaletsky. Gavekal has grown to become one of the world’s leading independent research providers to institutional investors around the globe. Louis has written seven books. His latest, Avoiding The Punch, published in 2021, deals with the challenges of building resilient portfolios in inflationary times.

                                                                                                                                The real challenge of venturing into China

                                                                                                                                Before getting down to Louis’s worst investment ever, he spoke to us about his strategy to build a market for his company in the Chinese market. His company, Gavekal, has operated successfully for over 20 years.

                                                                                                                                When Louis started Gavekal in Hong Kong in the early 2000s, it was evident that China would be a massive factor in the global economy. There was a huge gap in understanding China’s role in the world and people’s understanding of it. Louis and his father figured they could try to monetize that gap. So they started an independent research firm. It was a macro research firm but with a strong China angle. Louis has tried to build up his expertise in China over the years.

                                                                                                                                According to Louis, the real challenge in China is always getting a clear picture. Many foreign investors don’t trust the available data.

                                                                                                                                How to succeed in the Chinese market

                                                                                                                                Louis says that the important thing for a foreign investor eyeing the Chinese market is to put things into context. You need to relate the economic data and the policy pronouncements to what you hear from corporations.

                                                                                                                                So when Louis and his father entered the market, they talked to the corporates and policymakers to put together a picture that was as close to the truth as possible.

                                                                                                                                Worst investment ever

                                                                                                                                Louis grew up very privileged. His dad had been a very successful money manager and had made much money selling his firm to Alliance capital in the mid-90s. After the sale, he retired. At the time, Louis was in Asia when the Asian crisis hit, and everything went bust. Louis’s dad called and told him he wanted to invest a million dollars in 10 high-quality blue-chip Asian companies. This was in August 1998.

                                                                                                                                Louis earned $50,000 a year, so managing a one-million-dollar portfolio was a huge deal for him. Between August and October, the portfolio fell by 60%. Louis was literally sick of looking at these positions where, on every individual position, he was losing more than his annual salary. Then between October and December, the market started stabilizing. By March, the portfolio was actually making money. Louis was keen to take it off while it was making money.

                                                                                                                                Because the portfolio size was so disproportionate to Louis’s earnings, he was not sleeping for days on end.

                                                                                                                                Lessons learned

                                                                                                                                • Portfolio sizing matters tremendously.
                                                                                                                                • Never under or over-position yourself.
                                                                                                                                • Be clear about what your risk tolerance is on individual positions.
                                                                                                                                • Know yourself as an investor.
                                                                                                                                • Don’t be driven by emotions.
                                                                                                                                • You don’t trade against the market. You trade against yourself.
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s takeaways

                                                                                                                                • Invest with people who have experience.
                                                                                                                                
                                                                                                                                

                                                                                                                                Actionable advice

                                                                                                                                If you’re starting off, start small. Figure out what you’re good at and what you’re not. There’s no magic formula. The most important thing is knowing your weaknesses and not putting yourself in a situation that plays to those weaknesses.

                                                                                                                                Louis’s recommendations

                                                                                                                                Louis recommends subscribing to Gavekal’s free newsletter to learn more about investing. He also recommends reading Kevin Muir, who writes The Macro Tourist, to learn how to keep your emotions in check,

                                                                                                                                No.1 goal for the next 12 months

                                                                                                                                Louis’s number one goal for the next 12 months is to figure out the best way to play emerging markets and survive.

                                                                                                                                Parting words

                                                                                                                                 

                                                                                                                                “Thanks a bunch for having me.”

                                                                                                                                Louis-Vincent Gave

                                                                                                                                 

                                                                                                                                [spp-transcript]

                                                                                                                                 

                                                                                                                                Connect with Louis-Vincent Gave

                                                                                                                                • LinkedIn
                                                                                                                                • Twitter
                                                                                                                                • Website
                                                                                                                                • Books
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s books

                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • My Worst Investment Ever
                                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s online programs

                                                                                                                                • Valuation Master Class
                                                                                                                                • The Become a Better Investor Community
                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                                • Achieve Your Goals
                                                                                                                                
                                                                                                                                

                                                                                                                                Connect with Andrew Stotz:

                                                                                                                                • astotz.com
                                                                                                                                • LinkedIn
                                                                                                                                • Facebook
                                                                                                                                • Instagram
                                                                                                                                • Twitter
                                                                                                                                • YouTube
                                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                                
                                                                                                                                ]]>44526a83-d7fc-4d10-a06b-aaa8dd8ea483Wed, 01 Mar 2023 06:00:00 +070058:58falsefullLouis-Vincent Gave is the Chief Executive Officer of Gavekal, a Hong Kong-based company he co-founded over 20 years ago with his father, Charles, and Anatole Kaletsky.Adam Rosen – Build to Sell From the StartBIO: Adam Rosen is an entrepreneur who loves to support business owners and share his rollercoaster startup journey to help those on a similar path.

                                                                                                                                STORY: As soon as Adam was done with college, he co-founded a business. He gave his all to the business for four years and enjoyed little success.

                                                                                                                                LEARNING: Get to product market fit as quickly as possible. Focus on delivering something that the client wants to use forever.

                                                                                                                                 

                                                                                                                                “Every single business owner has a responsibility to build their company to sell it from the start.”

                                                                                                                                Adam Rosen

                                                                                                                                 

                                                                                                                                Guest profile

                                                                                                                                Adam Rosen is an entrepreneur who loves to support business owners and share his rollercoaster startup journey to help those on a similar path. He is the founder of Email Outreach Company, where they do automated email outreach to get startups on more sales appointments without the hassle.

                                                                                                                                Worst investment ever

                                                                                                                                Coming out of college, Adam had an excellent opportunity to make a good amount of money. He decided to start his first business—with two other college mates. The company wasn’t funded in the first year. The founders didn’t take any salary from the business. Adam had to work in a restaurant on weekends to keep his bank account going. In the second year, the founders raised capital.

                                                                                                                                The next four years were a roller coaster. The company had some decent success, but Adam never paid himself. He was literally living on his credit card for years, thinking he would get his big break soon. And it never happened.

                                                                                                                                The founders sold the company but didn’t get much for it. They simply took the exit deal to ensure their customers could end up in a good spot and the business could live on.

                                                                                                                                Lessons learned

                                                                                                                                • Get to product market fit as quickly as possible.
                                                                                                                                • Churn can be a killer for any business.
                                                                                                                                • Find the reality of your business as soon as possible; are you profitable or not?
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s takeaways

                                                                                                                                • Before entering the startup world, understand that you’ll be trapped in that situation. So be sure you’re doing the right thing with the right people.
                                                                                                                                • The startup world has no badge of honor for not paying yourself.
                                                                                                                                • Focus on delivering something that the client wants to use forever.
                                                                                                                                
                                                                                                                                

                                                                                                                                Actionable advice

                                                                                                                                Focus on profitable systems. Can your system get you new customers and keep those customers? Can it make your business profitable? On top of all that, build to sell from the start.

                                                                                                                                Adam’s recommendations

                                                                                                                                If you want more sales appointments, or you’re doing cold emails alone and not getting the responses you wish, Adam recommends checking out eocworks.com. You can book a call through his calendar directly on the website. He’ll talk with you about either his company doing this for you, helping you with your current approach, or just talking about startup sales and getting more sales opportunities.

                                                                                                                                No.1 goal for the next 12 months

                                                                                                                                Adam’s number one goal for the next 12 months is to get a 2x revenue offer for his company. On top of that, he wants to be happy, enjoy life and keep traveling the world.

                                                                                                                                Parting words

                                                                                                                                 

                                                                                                                                “Thank you, Andrew; keep up the good work. For everybody, just keep on going. Perseverance and spirit have done wonders in all ages.”

                                                                                                                                Adam Rosen

                                                                                                                                 

                                                                                                                                [spp-transcript]

                                                                                                                                 

                                                                                                                                Connect with Adam Rosen

                                                                                                                                • LinkedIn
                                                                                                                                • Instagram
                                                                                                                                • Podcast
                                                                                                                                • Website
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s books

                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • My Worst Investment Ever
                                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s online programs

                                                                                                                                • Valuation Master Class
                                                                                                                                • The Become a Better Investor Community
                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                                • Achieve Your Goals
                                                                                                                                
                                                                                                                                

                                                                                                                                Connect with Andrew Stotz:

                                                                                                                                • astotz.com
                                                                                                                                • LinkedIn
                                                                                                                                • Facebook
                                                                                                                                • Instagram
                                                                                                                                • Twitter
                                                                                                                                • YouTube
                                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                                
                                                                                                                                ]]>BIO: Adam Rosen is an entrepreneur who loves to support business owners and share his rollercoaster startup journey to help those on a similar path.

                                                                                                                                STORY: As soon as Adam was done with college, he co-founded a business. He gave his all to the business for four years and enjoyed little success.

                                                                                                                                LEARNING: Get to product market fit as quickly as possible. Focus on delivering something that the client wants to use forever.

                                                                                                                                 

                                                                                                                                “Every single business owner has a responsibility to build their company to sell it from the start.”

                                                                                                                                Adam Rosen

                                                                                                                                 

                                                                                                                                Guest profile

                                                                                                                                Adam Rosen is an entrepreneur who loves to support business owners and share his rollercoaster startup journey to help those on a similar path. He is the founder of Email Outreach Company, where they do automated email outreach to get startups on more sales appointments without the hassle.

                                                                                                                                Worst investment ever

                                                                                                                                Coming out of college, Adam had an excellent opportunity to make a good amount of money. He decided to start his first business—with two other college mates. The company wasn’t funded in the first year. The founders didn’t take any salary from the business. Adam had to work in a restaurant on weekends to keep his bank account going. In the second year, the founders raised capital.

                                                                                                                                The next four years were a roller coaster. The company had some decent success, but Adam never paid himself. He was literally living on his credit card for years, thinking he would get his big break soon. And it never happened.

                                                                                                                                The founders sold the company but didn’t get much for it. They simply took the exit deal to ensure their customers could end up in a good spot and the business could live on.

                                                                                                                                Lessons learned

                                                                                                                                • Get to product market fit as quickly as possible.
                                                                                                                                • Churn can be a killer for any business.
                                                                                                                                • Find the reality of your business as soon as possible; are you profitable or not?
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s takeaways

                                                                                                                                • Before entering the startup world, understand that you’ll be trapped in that situation. So be sure you’re doing the right thing with the right people.
                                                                                                                                • The startup world has no badge of honor for not paying yourself.
                                                                                                                                • Focus on delivering something that the client wants to use forever.
                                                                                                                                
                                                                                                                                

                                                                                                                                Actionable advice

                                                                                                                                Focus on profitable systems. Can your system get you new customers and keep those customers? Can it make your business profitable? On top of all that, build to sell from the start.

                                                                                                                                Adam’s recommendations

                                                                                                                                If you want more sales appointments, or you’re doing cold emails alone and not getting the responses you wish, Adam recommends checking out eocworks.com. You can book a call through his calendar directly on the website. He’ll talk with you about either his company doing this for you, helping you with your current approach, or just talking about startup sales and getting more sales opportunities.

                                                                                                                                No.1 goal for the next 12 months

                                                                                                                                Adam’s number one goal for the next 12 months is to get a 2x revenue offer for his company. On top of that, he wants to be happy, enjoy life and keep traveling the world.

                                                                                                                                Parting words

                                                                                                                                 

                                                                                                                                “Thank you, Andrew; keep up the good work. For everybody, just keep on going. Perseverance and spirit have done wonders in all ages.”

                                                                                                                                Adam Rosen

                                                                                                                                 

                                                                                                                                [spp-transcript]

                                                                                                                                 

                                                                                                                                Connect with Adam Rosen

                                                                                                                                • LinkedIn
                                                                                                                                • Instagram
                                                                                                                                • Podcast
                                                                                                                                • Website
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s books

                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • My Worst Investment Ever
                                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s online programs

                                                                                                                                • Valuation Master Class
                                                                                                                                • The Become a Better Investor Community
                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                                • Achieve Your Goals
                                                                                                                                
                                                                                                                                

                                                                                                                                Connect with Andrew Stotz:

                                                                                                                                • astotz.com
                                                                                                                                • LinkedIn
                                                                                                                                • Facebook
                                                                                                                                • Instagram
                                                                                                                                • Twitter
                                                                                                                                • YouTube
                                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                                
                                                                                                                                ]]>cb87202c-7b24-4e25-9a3a-9ee71a433e3bMon, 27 Feb 2023 06:00:00 +070024:01falsefullAdam Rosen is an entrepreneur who loves to support business owners and share his rollercoaster startup journey to help those on a similar path.ISMS 6: UK Looks Most Interesting Among the Top 5 Stock MarketsIn this presentation, I will introduce you to our FVMR investment framework

                                                                                                                                And will apply it to assess the attractiveness of the top five developed countries in the world: US, Japan, Germany, UK, and France.

                                                                                                                                Click here to get the PDF with all charts and graphs

                                                                                                                                What do you think: Which of the largest country’s stock markets is most attractive?

                                                                                                                                What is your investment framework?

                                                                                                                                • Our investment strategies for ETFs and stocks come from our FVMR framework
                                                                                                                                • We backtest and optimize the strategy for the factors that have worked best in that market
                                                                                                                                • We do all our research in-house
                                                                                                                                • We don’t rely on other people’s research
                                                                                                                                • We might, of course, get ideas from others, but we then test those ideas in our FVMR framework
                                                                                                                                
                                                                                                                                

                                                                                                                                The benefit of an investment framework is that it forces discipline

                                                                                                                                • It’s easy to be emotionally affected by market events, which can cause you to make rash and costly decisions
                                                                                                                                • To avoid this, we stick to our framework
                                                                                                                                
                                                                                                                                

                                                                                                                                A robust framework means our strategy relies on data and structure rather than just a feeling or an opinion

                                                                                                                                • Management is responsible for producing earnings
                                                                                                                                • Investors set the price the company trades at
                                                                                                                                
                                                                                                                                

                                                                                                                                There are Four Elements to our Framework

                                                                                                                                • Fundamentals: Strong profitability shows a company is managed well. We prefer high or rising profitability.
                                                                                                                                • Valuation: Shows how the market perceives the stock. We prefer good fundamentals at relatively cheap valuations.
                                                                                                                                • Momentum: We try to avoid “value traps” by looking for positive price and earnings momentum. At times, low momentum signals an out-of-favor opportunity.
                                                                                                                                • Risk: Prefer low business and price risk. Not every stock is going to fly; some just provide stable returns and strong dividends.
                                                                                                                                
                                                                                                                                

                                                                                                                                For this study, we look at the top 5 Developed Market countries ranked by GDP

                                                                                                                                • USA – US$23trn
                                                                                                                                • Japan – US$4.9trn
                                                                                                                                • Germany – US$4.2trn
                                                                                                                                • UK – US$3.2trn
                                                                                                                                • France – US$2.9trn
                                                                                                                                
                                                                                                                                

                                                                                                                                EBITDA margin remains high in the US and UK at above 20%, lowest in Japan at 13%

                                                                                                                                • Net margin is a remarkably high 12% in the US and UK, double the global LT average
                                                                                                                                • At 7%, Japan is still double its long-term net margin of 3%
                                                                                                                                • At 7% Germany is nearly double its long-term average of 4%
                                                                                                                                
                                                                                                                                

                                                                                                                                US companies have a relatively high 19% ROE, above its 16% LT average

                                                                                                                                • Japan’s low 9% ROE  is partially driven by the low interest rate environment
                                                                                                                                • Germany is just slightly above its 11% long-term average
                                                                                                                                
                                                                                                                                

                                                                                                                                European companies have paid out more cash to shareholders

                                                                                                                                • US companies also return cash to shareholders through buybacks in addition to dividends, a reason this number is relatively low
                                                                                                                                • Shareholder yield is about equal across these markets
                                                                                                                                
                                                                                                                                

                                                                                                                                US remains the most expensive market at 19x PE

                                                                                                                                • Japan, Germany, and France at 13x
                                                                                                                                • UK super cheap at 10x
                                                                                                                                
                                                                                                                                

                                                                                                                                On a PB basis, the US is very expensive at 3.7x

                                                                                                                                • UK companies are asset-heavy
                                                                                                                                • US revenue/asset: 0.70x
                                                                                                                                • Japan: 0.69x, Germany: 0.58x, UK: 0.57x, and France: 0.52x
                                                                                                                                
                                                                                                                                

                                                                                                                                US companies are most expensive again with price-to-cash flow at 13x

                                                                                                                                • About 50% higher than the others, which hover between 7x and 8x price-to-cash flow
                                                                                                                                
                                                                                                                                

                                                                                                                                Super low US dividend yield due to expensive market and payouts coming from share buybacks

                                                                                                                                • The UK market now pays a high 4.2%
                                                                                                                                • This shows that the market is cheap and also that inflation expectations are high
                                                                                                                                
                                                                                                                                

                                                                                                                                Considering ROE/PB, UK is super cheap, and the US is 2x as expensive

                                                                                                                                • 6x PB in UK for a 16% ROE
                                                                                                                                
                                                                                                                                

                                                                                                                                Earnings expectations collapsed in France, Germany, and UK, but have bounced back

                                                                                                                                • Highest expected EPS recovery in the UK
                                                                                                                                • 2023 growth is expected to be strongest in Japan, weakest in UK
                                                                                                                                
                                                                                                                                

                                                                                                                                Over the past 6-months Germany and France are up about 12%, UK only half that, US neg.

                                                                                                                                • The US market is up most over the past three years, Germany is about flat over three years
                                                                                                                                • YTD winners are Germany and France
                                                                                                                                
                                                                                                                                

                                                                                                                                Things to consider about Europe

                                                                                                                                • Lack of tech stocks in Europe compared to the US, so when value does well European markets do well
                                                                                                                                • China reopening is positively impacting sentiment
                                                                                                                                • Some speculate that lower oil prices and China opening may prevent a recession in Europe
                                                                                                                                • Risk is that ECB will hike more than the Fed
                                                                                                                                
                                                                                                                                

                                                                                                                                UK and Italy have the highest 10-year govt bond rates

                                                                                                                                • Europe – 2.8%
                                                                                                                                • Germany – 2.2%
                                                                                                                                • UK – 3.3%
                                                                                                                                • France – 6%
                                                                                                                                • Italy – 4.0%
                                                                                                                                • Spain – 3.2%
                                                                                                                                
                                                                                                                                

                                                                                                                                So many risks

                                                                                                                                • Nuclear war
                                                                                                                                • Energy spike
                                                                                                                                • US recession
                                                                                                                                • Slower-than-expected China recovery
                                                                                                                                
                                                                                                                                

                                                                                                                                Key points and the bottom line

                                                                                                                                • Considering all four elements: Fundamentals, Valuation, Momentum, and Risk
                                                                                                                                • The US is expensive, and the UK looks cheap
                                                                                                                                • UK looks most interesting among the top 5 stock markets
                                                                                                                                
                                                                                                                                

                                                                                                                                Click here to get the PDF with all charts and graphs

                                                                                                                                 

                                                                                                                                Andrew’s books

                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • My Worst Investment Ever
                                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s online programs

                                                                                                                                • Valuation Master Class
                                                                                                                                • The Become a Better Investor Community
                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                                • Achieve Your Goals
                                                                                                                                
                                                                                                                                

                                                                                                                                Connect with Andrew Stotz:

                                                                                                                                • astotz.com
                                                                                                                                • LinkedIn
                                                                                                                                • Facebook
                                                                                                                                • Instagram
                                                                                                                                • Twitter
                                                                                                                                • YouTube
                                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                                
                                                                                                                                ]]>In this presentation, I will introduce you to our FVMR investment framework

                                                                                                                                And will apply it to assess the attractiveness of the top five developed countries in the world: US, Japan, Germany, UK, and France.

                                                                                                                                Click here to get the PDF with all charts and graphs

                                                                                                                                What do you think: Which of the largest country’s stock markets is most attractive?

                                                                                                                                What is your investment framework?

                                                                                                                                • Our investment strategies for ETFs and stocks come from our FVMR framework
                                                                                                                                • We backtest and optimize the strategy for the factors that have worked best in that market
                                                                                                                                • We do all our research in-house
                                                                                                                                • We don’t rely on other people’s research
                                                                                                                                • We might, of course, get ideas from others, but we then test those ideas in our FVMR framework
                                                                                                                                
                                                                                                                                

                                                                                                                                The benefit of an investment framework is that it forces discipline

                                                                                                                                • It’s easy to be emotionally affected by market events, which can cause you to make rash and costly decisions
                                                                                                                                • To avoid this, we stick to our framework
                                                                                                                                
                                                                                                                                

                                                                                                                                A robust framework means our strategy relies on data and structure rather than just a feeling or an opinion

                                                                                                                                • Management is responsible for producing earnings
                                                                                                                                • Investors set the price the company trades at
                                                                                                                                
                                                                                                                                

                                                                                                                                There are Four Elements to our Framework

                                                                                                                                • Fundamentals: Strong profitability shows a company is managed well. We prefer high or rising profitability.
                                                                                                                                • Valuation: Shows how the market perceives the stock. We prefer good fundamentals at relatively cheap valuations.
                                                                                                                                • Momentum: We try to avoid “value traps” by looking for positive price and earnings momentum. At times, low momentum signals an out-of-favor opportunity.
                                                                                                                                • Risk: Prefer low business and price risk. Not every stock is going to fly; some just provide stable returns and strong dividends.
                                                                                                                                
                                                                                                                                

                                                                                                                                For this study, we look at the top 5 Developed Market countries ranked by GDP

                                                                                                                                • USA – US$23trn
                                                                                                                                • Japan – US$4.9trn
                                                                                                                                • Germany – US$4.2trn
                                                                                                                                • UK – US$3.2trn
                                                                                                                                • France – US$2.9trn
                                                                                                                                
                                                                                                                                

                                                                                                                                EBITDA margin remains high in the US and UK at above 20%, lowest in Japan at 13%

                                                                                                                                • Net margin is a remarkably high 12% in the US and UK, double the global LT average
                                                                                                                                • At 7%, Japan is still double its long-term net margin of 3%
                                                                                                                                • At 7% Germany is nearly double its long-term average of 4%
                                                                                                                                
                                                                                                                                

                                                                                                                                US companies have a relatively high 19% ROE, above its 16% LT average

                                                                                                                                • Japan’s low 9% ROE  is partially driven by the low interest rate environment
                                                                                                                                • Germany is just slightly above its 11% long-term average
                                                                                                                                
                                                                                                                                

                                                                                                                                European companies have paid out more cash to shareholders

                                                                                                                                • US companies also return cash to shareholders through buybacks in addition to dividends, a reason this number is relatively low
                                                                                                                                • Shareholder yield is about equal across these markets
                                                                                                                                
                                                                                                                                

                                                                                                                                US remains the most expensive market at 19x PE

                                                                                                                                • Japan, Germany, and France at 13x
                                                                                                                                • UK super cheap at 10x
                                                                                                                                
                                                                                                                                

                                                                                                                                On a PB basis, the US is very expensive at 3.7x

                                                                                                                                • UK companies are asset-heavy
                                                                                                                                • US revenue/asset: 0.70x
                                                                                                                                • Japan: 0.69x, Germany: 0.58x, UK: 0.57x, and France: 0.52x
                                                                                                                                
                                                                                                                                

                                                                                                                                US companies are most expensive again with price-to-cash flow at 13x

                                                                                                                                • About 50% higher than the others, which hover between 7x and 8x price-to-cash flow
                                                                                                                                
                                                                                                                                

                                                                                                                                Super low US dividend yield due to expensive market and payouts coming from share buybacks

                                                                                                                                • The UK market now pays a high 4.2%
                                                                                                                                • This shows that the market is cheap and also that inflation expectations are high
                                                                                                                                
                                                                                                                                

                                                                                                                                Considering ROE/PB, UK is super cheap, and the US is 2x as expensive

                                                                                                                                • 6x PB in UK for a 16% ROE
                                                                                                                                
                                                                                                                                

                                                                                                                                Earnings expectations collapsed in France, Germany, and UK, but have bounced back

                                                                                                                                • Highest expected EPS recovery in the UK
                                                                                                                                • 2023 growth is expected to be strongest in Japan, weakest in UK
                                                                                                                                
                                                                                                                                

                                                                                                                                Over the past 6-months Germany and France are up about 12%, UK only half that, US neg.

                                                                                                                                • The US market is up most over the past three years, Germany is about flat over three years
                                                                                                                                • YTD winners are Germany and France
                                                                                                                                
                                                                                                                                

                                                                                                                                Things to consider about Europe

                                                                                                                                • Lack of tech stocks in Europe compared to the US, so when value does well European markets do well
                                                                                                                                • China reopening is positively impacting sentiment
                                                                                                                                • Some speculate that lower oil prices and China opening may prevent a recession in Europe
                                                                                                                                • Risk is that ECB will hike more than the Fed
                                                                                                                                
                                                                                                                                

                                                                                                                                UK and Italy have the highest 10-year govt bond rates

                                                                                                                                • Europe – 2.8%
                                                                                                                                • Germany – 2.2%
                                                                                                                                • UK – 3.3%
                                                                                                                                • France – 6%
                                                                                                                                • Italy – 4.0%
                                                                                                                                • Spain – 3.2%
                                                                                                                                
                                                                                                                                

                                                                                                                                So many risks

                                                                                                                                • Nuclear war
                                                                                                                                • Energy spike
                                                                                                                                • US recession
                                                                                                                                • Slower-than-expected China recovery
                                                                                                                                
                                                                                                                                

                                                                                                                                Key points and the bottom line

                                                                                                                                • Considering all four elements: Fundamentals, Valuation, Momentum, and Risk
                                                                                                                                • The US is expensive, and the UK looks cheap
                                                                                                                                • UK looks most interesting among the top 5 stock markets
                                                                                                                                
                                                                                                                                

                                                                                                                                Click here to get the PDF with all charts and graphs

                                                                                                                                 

                                                                                                                                Andrew’s books

                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • My Worst Investment Ever
                                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s online programs

                                                                                                                                • Valuation Master Class
                                                                                                                                • The Become a Better Investor Community
                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                                • Achieve Your Goals
                                                                                                                                
                                                                                                                                

                                                                                                                                Connect with Andrew Stotz:

                                                                                                                                • astotz.com
                                                                                                                                • LinkedIn
                                                                                                                                • Facebook
                                                                                                                                • Instagram
                                                                                                                                • Twitter
                                                                                                                                • YouTube
                                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                                
                                                                                                                                ]]>f04bc2de-4ab1-4007-9f33-3fe21e7a3391Fri, 24 Feb 2023 06:00:00 +070012:04falsefullWhat do you think: Which of the largest country’s stock markets is most attractive?Terri Spath – Always Know When to Buy and When to FoldBIO: Terri Spath is the founder and CIO of Zuma Wealth LLC and has earned top performance marks stewarding billions of dollars at large investment shops through the booms and busts of the past quarter-century.

                                                                                                                                STORY: At the height of the Dotcom boom, Terri bought—on behalf of clients—some terrific companies because she knew how to value, assess, and analyze them. But she kept holding onto the companies when the market tanked instead of selling.

                                                                                                                                LEARNING: Know when to buy and when to sell. Don’t get too attached to your favorite stocks.

                                                                                                                                 

                                                                                                                                “If you have great self-discipline, you can figure out how to make money in your sleep.”

                                                                                                                                Terri Spath

                                                                                                                                 

                                                                                                                                Guest profile

                                                                                                                                Terri Spath is the founder and CIO of Zuma Wealth LLC and has earned top performance marks stewarding billions of dollars at large investment shops through the booms and busts of the past quarter-century.

                                                                                                                                A renowned expert, Terri is a regular CNBC and Bloomberg TV guest and a sought-after industry speaker. She was named a “Top 10 Inspiring Women of 2022” and shortlisted by the Women in Asset Management awards. She has earned the CFA charter, the CFP® certification, an MBA from Columbia University, and an AB from the University of Michigan.

                                                                                                                                Terri started investing when her father introduced her to the concept of compound interest when she learned she could make money in her sleep.

                                                                                                                                Worst investment ever

                                                                                                                                When Terri came out of Columbia Business School, she got hired by a big company on the West Coast. She had already started investing, as she had learned a lot when studying for her CFA. The philosophy of Columbia Business School is very much in line with Benjamin Graham and Warren Buffett. The philosophy is that value investing relies on picking good companies that have great moats around them and strong management, and you can buy them at a dirt-cheap price. Terri came out of Colombia, well-trained in that arena, and when she started working for the big company, she started putting those ideas to work.

                                                                                                                                At the time, more and more technology and internet companies were coming out. Terri was assigned to the industry and covered all the stocks under that umbrella. She was buying conservatively, following what she had learned at Columbia about buying stuff cheap. Terri didn’t get trapped in the excitement of the new companies. She followed the philosophy she had learned.

                                                                                                                                Terri bought some terrific companies on behalf of clients because she knew how to value, assess, and analyze them. Terri believed she had made good purchases.

                                                                                                                                The frenzy and excitement in internet retail and technology companies pulled the market up. Then some of those companies started to collapse. This ripple effect killed the technology stocks, the NASDAQ, and the broader markets.

                                                                                                                                When everything started going down, Terri decided to hang onto those stocks. She didn’t acknowledge it was time to sell. Terri’s biggest mistake was holding onto what she thought were great companies in terrible markets.

                                                                                                                                Lessons learned

                                                                                                                                • Pay attention to the broader markets too.
                                                                                                                                • Have the discipline to evaluate when to buy and when to fold to avoid losing your profits.
                                                                                                                                • Don’t get too attached to your favorite stocks; always know when to get out.
                                                                                                                                • Make sure that you understand the risk.
                                                                                                                                • Most investors tend to be better at one side of the trade than the other, but balancing both sides will bring you more success.
                                                                                                                                • Have a sell strategy and apply it regularly.
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s takeaways

                                                                                                                                • Employ stop losses to help you sell when the investment is not working.
                                                                                                                                • Don’t fight the flow of funds.
                                                                                                                                
                                                                                                                                

                                                                                                                                Actionable advice

                                                                                                                                Consistency, consistency, consistency. Have a consistent sell discipline and stick to it. This will protect your downside and prevent you from losing unnecessarily.

                                                                                                                                Terri’s recommendations

                                                                                                                                Terri has tons of information on her Zuma Wealth website on ensuring you participate in the upside of the market without losing too much.

                                                                                                                                No.1 goal for the next 12 months

                                                                                                                                Terri’s number one goal for the next 12 months is to motivate and educate people on how to invest properly.

                                                                                                                                Parting words

                                                                                                                                 

                                                                                                                                “Don’t be afraid of losing money. Stay disciplined and keep listening to this podcast so you don’t have to make the same mistakes.”

                                                                                                                                Terri Spath

                                                                                                                                 

                                                                                                                                [spp-transcript]

                                                                                                                                 

                                                                                                                                Connect with Terri Spath

                                                                                                                                • LinkedIn
                                                                                                                                • Facebook
                                                                                                                                • YouTube
                                                                                                                                • Website
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s books

                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • My Worst Investment Ever
                                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s online programs

                                                                                                                                • Valuation Master Class
                                                                                                                                • The Become a Better Investor Community
                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                                • Achieve Your Goals
                                                                                                                                
                                                                                                                                

                                                                                                                                Connect with Andrew Stotz:

                                                                                                                                • astotz.com
                                                                                                                                • LinkedIn
                                                                                                                                • Facebook
                                                                                                                                • Instagram
                                                                                                                                • Twitter
                                                                                                                                • YouTube
                                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                                
                                                                                                                                ]]>BIO: Terri Spath is the founder and CIO of Zuma Wealth LLC and has earned top performance marks stewarding billions of dollars at large investment shops through the booms and busts of the past quarter-century.

                                                                                                                                STORY: At the height of the Dotcom boom, Terri bought—on behalf of clients—some terrific companies because she knew how to value, assess, and analyze them. But she kept holding onto the companies when the market tanked instead of selling.

                                                                                                                                LEARNING: Know when to buy and when to sell. Don’t get too attached to your favorite stocks.

                                                                                                                                 

                                                                                                                                “If you have great self-discipline, you can figure out how to make money in your sleep.”

                                                                                                                                Terri Spath

                                                                                                                                 

                                                                                                                                Guest profile

                                                                                                                                Terri Spath is the founder and CIO of Zuma Wealth LLC and has earned top performance marks stewarding billions of dollars at large investment shops through the booms and busts of the past quarter-century.

                                                                                                                                A renowned expert, Terri is a regular CNBC and Bloomberg TV guest and a sought-after industry speaker. She was named a “Top 10 Inspiring Women of 2022” and shortlisted by the Women in Asset Management awards. She has earned the CFA charter, the CFP® certification, an MBA from Columbia University, and an AB from the University of Michigan.

                                                                                                                                Terri started investing when her father introduced her to the concept of compound interest when she learned she could make money in her sleep.

                                                                                                                                Worst investment ever

                                                                                                                                When Terri came out of Columbia Business School, she got hired by a big company on the West Coast. She had already started investing, as she had learned a lot when studying for her CFA. The philosophy of Columbia Business School is very much in line with Benjamin Graham and Warren Buffett. The philosophy is that value investing relies on picking good companies that have great moats around them and strong management, and you can buy them at a dirt-cheap price. Terri came out of Colombia, well-trained in that arena, and when she started working for the big company, she started putting those ideas to work.

                                                                                                                                At the time, more and more technology and internet companies were coming out. Terri was assigned to the industry and covered all the stocks under that umbrella. She was buying conservatively, following what she had learned at Columbia about buying stuff cheap. Terri didn’t get trapped in the excitement of the new companies. She followed the philosophy she had learned.

                                                                                                                                Terri bought some terrific companies on behalf of clients because she knew how to value, assess, and analyze them. Terri believed she had made good purchases.

                                                                                                                                The frenzy and excitement in internet retail and technology companies pulled the market up. Then some of those companies started to collapse. This ripple effect killed the technology stocks, the NASDAQ, and the broader markets.

                                                                                                                                When everything started going down, Terri decided to hang onto those stocks. She didn’t acknowledge it was time to sell. Terri’s biggest mistake was holding onto what she thought were great companies in terrible markets.

                                                                                                                                Lessons learned

                                                                                                                                • Pay attention to the broader markets too.
                                                                                                                                • Have the discipline to evaluate when to buy and when to fold to avoid losing your profits.
                                                                                                                                • Don’t get too attached to your favorite stocks; always know when to get out.
                                                                                                                                • Make sure that you understand the risk.
                                                                                                                                • Most investors tend to be better at one side of the trade than the other, but balancing both sides will bring you more success.
                                                                                                                                • Have a sell strategy and apply it regularly.
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s takeaways

                                                                                                                                • Employ stop losses to help you sell when the investment is not working.
                                                                                                                                • Don’t fight the flow of funds.
                                                                                                                                
                                                                                                                                

                                                                                                                                Actionable advice

                                                                                                                                Consistency, consistency, consistency. Have a consistent sell discipline and stick to it. This will protect your downside and prevent you from losing unnecessarily.

                                                                                                                                Terri’s recommendations

                                                                                                                                Terri has tons of information on her Zuma Wealth website on ensuring you participate in the upside of the market without losing too much.

                                                                                                                                No.1 goal for the next 12 months

                                                                                                                                Terri’s number one goal for the next 12 months is to motivate and educate people on how to invest properly.

                                                                                                                                Parting words

                                                                                                                                 

                                                                                                                                “Don’t be afraid of losing money. Stay disciplined and keep listening to this podcast so you don’t have to make the same mistakes.”

                                                                                                                                Terri Spath

                                                                                                                                 

                                                                                                                                [spp-transcript]

                                                                                                                                 

                                                                                                                                Connect with Terri Spath

                                                                                                                                • LinkedIn
                                                                                                                                • Facebook
                                                                                                                                • YouTube
                                                                                                                                • Website
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s books

                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • My Worst Investment Ever
                                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s online programs

                                                                                                                                • Valuation Master Class
                                                                                                                                • The Become a Better Investor Community
                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                                • Achieve Your Goals
                                                                                                                                
                                                                                                                                

                                                                                                                                Connect with Andrew Stotz:

                                                                                                                                • astotz.com
                                                                                                                                • LinkedIn
                                                                                                                                • Facebook
                                                                                                                                • Instagram
                                                                                                                                • Twitter
                                                                                                                                • YouTube
                                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                                
                                                                                                                                ]]>618bce6d-eb99-49b8-9c8b-badfe45d786dThu, 23 Feb 2023 06:00:00 +070032:35falsefullTerri Spath is the founder and CIO of Zuma Wealth LLC and has earned top performance marks stewarding billions of dollars at large investment shops through the booms and busts of the past quarter-century.Brett Martin – Fix Your Partnership or Quit ItBIO: Brett Martin is co-founder of Kumospace, the virtual HQ for remote teams, and Charge Ventures, a pre/seed VC based in Brooklyn, NY.

                                                                                                                                STORY: Brett started a company and got just 20% ownership; the rest went to investors who eventually walked away, leaving the business to crumble.

                                                                                                                                LEARNING: If you’re in a partnership that’s not working, you must push it to a conclusion. Complaining won’t resolve your problems. If you can, bootstrap your company instead of taking money from venture capitalists.

                                                                                                                                 

                                                                                                                                “A good business partnership is like a relationship. You have to like the person, respect and trust them.”

                                                                                                                                Brett Martin

                                                                                                                                 

                                                                                                                                Guest profile

                                                                                                                                Brett Martin is co-founder of Kumospace, the virtual HQ for remote teams, and Charge Ventures, a pre/seed VC based in Brooklyn, NY. He also serves as Adjunct Professor at Columbia Business School, where he teaches data analytics. He loves you.

                                                                                                                                Worst investment ever

                                                                                                                                Brett had just come off his first failed startup. He moved back to New York City, where his friend connected him with a job at an early-stage venture capital fund. The fund owners said they were looking to turn the fund into a venture studio, where they build and invest in companies. Brett wanted to start his own company, and he figured he might as well do it with the fund.

                                                                                                                                The fund gave Brett a pretty lousy deal on ownership. He owned just 20% of the company he founded. He got funding of $150,000 for giving up 80% of his company. Brett took the money and got the company up and running. He built a proof of concept and started pitching to venture capitalists. A couple of venture capitalists loved his pitch and had another meeting with them. Brett was able to raise a million dollars in funding. He launched his company, and it was off to a good start. The business received 300 press mentions in six months.

                                                                                                                                Brett had a problem, though. He had a totally fractured investor base. Some people had put in millions of dollars and owned 10% of the company. Others put in a couple of $100,000 and had 60% ownership. Brett had no control over his company, eventually bringing down the business.

                                                                                                                                At the time, the company had millions of users, and Brett wanted to keep going and figure out how to make it work. Unfortunately, all the funding dried up, and all the investors walked away. And so Brett was scrambling to raise money just to keep the company afloat. He did that for six months until he finally got someone willing to recapitalize the company and start the whole thing again. All Brett needed to do was get his investors to agree to that deal. They wouldn’t take it, and the entire thing blew up. Brett and everyone who had invested in his company lost all their money.

                                                                                                                                Lessons learned

                                                                                                                                • If you’re in a partnership that’s not working, you have to push it to a conclusion.
                                                                                                                                • Complaining won’t resolve your problems.
                                                                                                                                • If you can, bootstrap your company instead of taking money from venture capitalists.
                                                                                                                                • Lean on your legal counsel for advice on the best deal to take when building a partnership.
                                                                                                                                • As an investor investing in a business owner, always ask yourself if this is this someone you want to work with for the next ten years. If not, don’t give them your money.
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s takeaways

                                                                                                                                • Identify your problems and solve them.
                                                                                                                                • Cash flow is your ultimate source of value.
                                                                                                                                
                                                                                                                                

                                                                                                                                Actionable advice

                                                                                                                                Think long-term when forming partnerships. Don’t take the deal just because it’s there or because someone’s dangling money in front of you. Or just because you’re pressured to work with people you’re not excited about. Always hold out for people that you love and respect.

                                                                                                                                Brett’s recommendations

                                                                                                                                Brett recommends checking out Stats For Startups, a platform for entrepreneurs who want to understand how to describe their SaaS businesses. You’ll find all the stats or metrics you need to value your startup.

                                                                                                                                No.1 goal for the next 12 months

                                                                                                                                Brett’s number one goal for the next 12 months is to lock down a long-term partnership deal he’s working on.

                                                                                                                                Parting words

                                                                                                                                 

                                                                                                                                “Be bold, be curious, and have fun.”

                                                                                                                                Brett Martin

                                                                                                                                 

                                                                                                                                [spp-transcript]

                                                                                                                                 

                                                                                                                                Connect with Brett Martin

                                                                                                                                • LinkedIn
                                                                                                                                • Twitter
                                                                                                                                • Instagram
                                                                                                                                • Website
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s books

                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • My Worst Investment Ever
                                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s online programs

                                                                                                                                • Valuation Master Class
                                                                                                                                • The Become a Better Investor Community
                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                                • Achieve Your Goals
                                                                                                                                
                                                                                                                                

                                                                                                                                Connect with Andrew Stotz:

                                                                                                                                • astotz.com
                                                                                                                                • LinkedIn
                                                                                                                                • Facebook
                                                                                                                                • Instagram
                                                                                                                                • Twitter
                                                                                                                                • YouTube
                                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                                
                                                                                                                                ]]>BIO: Brett Martin is co-founder of Kumospace, the virtual HQ for remote teams, and Charge Ventures, a pre/seed VC based in Brooklyn, NY.

                                                                                                                                STORY: Brett started a company and got just 20% ownership; the rest went to investors who eventually walked away, leaving the business to crumble.

                                                                                                                                LEARNING: If you’re in a partnership that’s not working, you must push it to a conclusion. Complaining won’t resolve your problems. If you can, bootstrap your company instead of taking money from venture capitalists.

                                                                                                                                 

                                                                                                                                “A good business partnership is like a relationship. You have to like the person, respect and trust them.”

                                                                                                                                Brett Martin

                                                                                                                                 

                                                                                                                                Guest profile

                                                                                                                                Brett Martin is co-founder of Kumospace, the virtual HQ for remote teams, and Charge Ventures, a pre/seed VC based in Brooklyn, NY. He also serves as Adjunct Professor at Columbia Business School, where he teaches data analytics. He loves you.

                                                                                                                                Worst investment ever

                                                                                                                                Brett had just come off his first failed startup. He moved back to New York City, where his friend connected him with a job at an early-stage venture capital fund. The fund owners said they were looking to turn the fund into a venture studio, where they build and invest in companies. Brett wanted to start his own company, and he figured he might as well do it with the fund.

                                                                                                                                The fund gave Brett a pretty lousy deal on ownership. He owned just 20% of the company he founded. He got funding of $150,000 for giving up 80% of his company. Brett took the money and got the company up and running. He built a proof of concept and started pitching to venture capitalists. A couple of venture capitalists loved his pitch and had another meeting with them. Brett was able to raise a million dollars in funding. He launched his company, and it was off to a good start. The business received 300 press mentions in six months.

                                                                                                                                Brett had a problem, though. He had a totally fractured investor base. Some people had put in millions of dollars and owned 10% of the company. Others put in a couple of $100,000 and had 60% ownership. Brett had no control over his company, eventually bringing down the business.

                                                                                                                                At the time, the company had millions of users, and Brett wanted to keep going and figure out how to make it work. Unfortunately, all the funding dried up, and all the investors walked away. And so Brett was scrambling to raise money just to keep the company afloat. He did that for six months until he finally got someone willing to recapitalize the company and start the whole thing again. All Brett needed to do was get his investors to agree to that deal. They wouldn’t take it, and the entire thing blew up. Brett and everyone who had invested in his company lost all their money.

                                                                                                                                Lessons learned

                                                                                                                                • If you’re in a partnership that’s not working, you have to push it to a conclusion.
                                                                                                                                • Complaining won’t resolve your problems.
                                                                                                                                • If you can, bootstrap your company instead of taking money from venture capitalists.
                                                                                                                                • Lean on your legal counsel for advice on the best deal to take when building a partnership.
                                                                                                                                • As an investor investing in a business owner, always ask yourself if this is this someone you want to work with for the next ten years. If not, don’t give them your money.
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s takeaways

                                                                                                                                • Identify your problems and solve them.
                                                                                                                                • Cash flow is your ultimate source of value.
                                                                                                                                
                                                                                                                                

                                                                                                                                Actionable advice

                                                                                                                                Think long-term when forming partnerships. Don’t take the deal just because it’s there or because someone’s dangling money in front of you. Or just because you’re pressured to work with people you’re not excited about. Always hold out for people that you love and respect.

                                                                                                                                Brett’s recommendations

                                                                                                                                Brett recommends checking out Stats For Startups, a platform for entrepreneurs who want to understand how to describe their SaaS businesses. You’ll find all the stats or metrics you need to value your startup.

                                                                                                                                No.1 goal for the next 12 months

                                                                                                                                Brett’s number one goal for the next 12 months is to lock down a long-term partnership deal he’s working on.

                                                                                                                                Parting words

                                                                                                                                 

                                                                                                                                “Be bold, be curious, and have fun.”

                                                                                                                                Brett Martin

                                                                                                                                 

                                                                                                                                [spp-transcript]

                                                                                                                                 

                                                                                                                                Connect with Brett Martin

                                                                                                                                • LinkedIn
                                                                                                                                • Twitter
                                                                                                                                • Instagram
                                                                                                                                • Website
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s books

                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • My Worst Investment Ever
                                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s online programs

                                                                                                                                • Valuation Master Class
                                                                                                                                • The Become a Better Investor Community
                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                                • Achieve Your Goals
                                                                                                                                
                                                                                                                                

                                                                                                                                Connect with Andrew Stotz:

                                                                                                                                • astotz.com
                                                                                                                                • LinkedIn
                                                                                                                                • Facebook
                                                                                                                                • Instagram
                                                                                                                                • Twitter
                                                                                                                                • YouTube
                                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                                
                                                                                                                                ]]>5ab8c388-bccd-4560-88bc-4818ff6e21dbWed, 22 Feb 2023 06:00:00 +070033:32falsefullBrett Martin is co-founder of Kumospace, the virtual HQ for remote teams, and Charge Ventures, a pre/seed VC based in Brooklyn, NY.Damon Pistulka – Be Careful of Concentration RiskBIO: Damon Pistulka earned a Mechanical Engineering degree in college, then worked in technical and managerial roles, including designing, building, and operating facilities.

                                                                                                                                STORY: Damon’s company focused on building a client’s business for sale. The client pulled out of a great offer at the last minute.

                                                                                                                                LEARNING: Always have a contract in place and ensure it has an exit clause that protects you. Diversify to avoid concentration risk.

                                                                                                                                 

                                                                                                                                “Always have an exit clause when leveraging your time against future value with clients.”

                                                                                                                                Damon Pistulka

                                                                                                                                 

                                                                                                                                Guest profile

                                                                                                                                Damon Pistulka earned a Mechanical Engineering degree in college, then worked in technical and managerial roles, including designing, building, and operating facilities. Over the decades, he has led various businesses. Now, he helps owners build valuable businesses that they can sell when they want to.

                                                                                                                                Worst investment ever

                                                                                                                                When Damon started his current company, it had what would have been considered a dream client. Damon and his team allowed that client to take up all their focus. The company got the client through the Exit Your Way process in the hope of exiting them with a very nice return.

                                                                                                                                After about 24 months of work, the client just decided to stop. Damon and the client were sitting at the table one day with a buyer willing to pay them $10 million more than they’d initially asked for. The client just said no to the offer and insisted the business was worth more than that.

                                                                                                                                Damon and his team had invested a lot of time into the sale. They had focused entirely on this client and had not built other clients up. Damon’s company was to be compensated with a portion of the exit proceeds from the sale. After the client refused the offer, Damon had to start his business over. It took him almost 12 months to get back after that.

                                                                                                                                Lessons learned

                                                                                                                                • Always have a contract in place and ensure it has an exit clause that protects you.
                                                                                                                                • Help your clients understand what it means to have life-changing money in front of them and turn it down.
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s takeaways

                                                                                                                                • Diversify to avoid concentration risk.
                                                                                                                                • You’re going to have losses in the beginning.
                                                                                                                                • Don’t be overconfident when you get a good deal on the table; take it.
                                                                                                                                • Consider when it’s best to get compensated in the percentage of a transaction or the percentage of shares in a company.
                                                                                                                                
                                                                                                                                

                                                                                                                                Actionable advice

                                                                                                                                Make sure you have an out clause in case someone wants to say no so that your business stays safe.

                                                                                                                                Damon’s recommendations

                                                                                                                                Damon recommends checking out exityourway.com, where you’ll find many guides and videos.

                                                                                                                                No.1 goal for the next 12 months

                                                                                                                                Damon’s number one goal for the next 12 months is to see through a significant marketing content development project the company has been working on. He believes this project is going to transform the way that he does business.

                                                                                                                                Parting words

                                                                                                                                 

                                                                                                                                “Thank you for having me, Andrew.”

                                                                                                                                Damon Pistulka

                                                                                                                                 

                                                                                                                                [spp-transcript]

                                                                                                                                 

                                                                                                                                Connect with Damon Pistulka

                                                                                                                                • LinkedIn
                                                                                                                                • Twitter
                                                                                                                                • Facebook
                                                                                                                                • YouTube
                                                                                                                                • Website
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s books

                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • My Worst Investment Ever
                                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s online programs

                                                                                                                                • Valuation Master Class
                                                                                                                                • The Become a Better Investor Community
                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                                • Achieve Your Goals
                                                                                                                                
                                                                                                                                

                                                                                                                                Connect with Andrew Stotz:

                                                                                                                                • astotz.com
                                                                                                                                • LinkedIn
                                                                                                                                • Facebook
                                                                                                                                • Instagram
                                                                                                                                • Twitter
                                                                                                                                • YouTube
                                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                                
                                                                                                                                ]]>BIO: Damon Pistulka earned a Mechanical Engineering degree in college, then worked in technical and managerial roles, including designing, building, and operating facilities.

                                                                                                                                STORY: Damon’s company focused on building a client’s business for sale. The client pulled out of a great offer at the last minute.

                                                                                                                                LEARNING: Always have a contract in place and ensure it has an exit clause that protects you. Diversify to avoid concentration risk.

                                                                                                                                 

                                                                                                                                “Always have an exit clause when leveraging your time against future value with clients.”

                                                                                                                                Damon Pistulka

                                                                                                                                 

                                                                                                                                Guest profile

                                                                                                                                Damon Pistulka earned a Mechanical Engineering degree in college, then worked in technical and managerial roles, including designing, building, and operating facilities. Over the decades, he has led various businesses. Now, he helps owners build valuable businesses that they can sell when they want to.

                                                                                                                                Worst investment ever

                                                                                                                                When Damon started his current company, it had what would have been considered a dream client. Damon and his team allowed that client to take up all their focus. The company got the client through the Exit Your Way process in the hope of exiting them with a very nice return.

                                                                                                                                After about 24 months of work, the client just decided to stop. Damon and the client were sitting at the table one day with a buyer willing to pay them $10 million more than they’d initially asked for. The client just said no to the offer and insisted the business was worth more than that.

                                                                                                                                Damon and his team had invested a lot of time into the sale. They had focused entirely on this client and had not built other clients up. Damon’s company was to be compensated with a portion of the exit proceeds from the sale. After the client refused the offer, Damon had to start his business over. It took him almost 12 months to get back after that.

                                                                                                                                Lessons learned

                                                                                                                                • Always have a contract in place and ensure it has an exit clause that protects you.
                                                                                                                                • Help your clients understand what it means to have life-changing money in front of them and turn it down.
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s takeaways

                                                                                                                                • Diversify to avoid concentration risk.
                                                                                                                                • You’re going to have losses in the beginning.
                                                                                                                                • Don’t be overconfident when you get a good deal on the table; take it.
                                                                                                                                • Consider when it’s best to get compensated in the percentage of a transaction or the percentage of shares in a company.
                                                                                                                                
                                                                                                                                

                                                                                                                                Actionable advice

                                                                                                                                Make sure you have an out clause in case someone wants to say no so that your business stays safe.

                                                                                                                                Damon’s recommendations

                                                                                                                                Damon recommends checking out exityourway.com, where you’ll find many guides and videos.

                                                                                                                                No.1 goal for the next 12 months

                                                                                                                                Damon’s number one goal for the next 12 months is to see through a significant marketing content development project the company has been working on. He believes this project is going to transform the way that he does business.

                                                                                                                                Parting words

                                                                                                                                 

                                                                                                                                “Thank you for having me, Andrew.”

                                                                                                                                Damon Pistulka

                                                                                                                                 

                                                                                                                                [spp-transcript]

                                                                                                                                 

                                                                                                                                Connect with Damon Pistulka

                                                                                                                                • LinkedIn
                                                                                                                                • Twitter
                                                                                                                                • Facebook
                                                                                                                                • YouTube
                                                                                                                                • Website
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s books

                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • My Worst Investment Ever
                                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s online programs

                                                                                                                                • Valuation Master Class
                                                                                                                                • The Become a Better Investor Community
                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                                • Achieve Your Goals
                                                                                                                                
                                                                                                                                

                                                                                                                                Connect with Andrew Stotz:

                                                                                                                                • astotz.com
                                                                                                                                • LinkedIn
                                                                                                                                • Facebook
                                                                                                                                • Instagram
                                                                                                                                • Twitter
                                                                                                                                • YouTube
                                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                                
                                                                                                                                ]]>fb5db0d0-f4b0-4b19-a92c-ce7d1576eb74Mon, 20 Feb 2023 06:00:00 +070022:16falsefullDamon Pistulka earned a Mechanical Engineering degree in college, then worked in technical and managerial roles, including designing, building, and operating facilities.ISMS 5: How Rising Rates and Oil Prices Are Contributing to 6.4% Inflation in the USHow rising rates and oil prices are contributing to 6.4% inflation in the US

                                                                                                                                Click here to get the PDF with all charts and graphs

                                                                                                                                What do you think: Are we headed for a recession or has the Fed engineered a soft landing?

                                                                                                                                • Jan. US CPI was up 6.4% YoY, continuing its slide from the June 2022 9.1% YoY peak, driven by high food and energy-related products
                                                                                                                                • Food was up 10.1% YoY but continued its 5th straight month of slowdown, driven by food consumed at home was up 11.3%
                                                                                                                                • The energy component of CPI rose 8.7% YoY; Oil was $100/bbl in Jul-2022; it’s now down to $80bbl. Oil price is the driver; however, energy commodities prices were up only 2.8%, thanks to a slower oil and gas price rise
                                                                                                                                • All other items excluding food and energy never rose as much and are coming down more slowly. This group benefited from negative used vehicle prices, but shelter costs keep it high
                                                                                                                                • Over the long term, energy, despite its small weight in CPI, drives consumer prices
                                                                                                                                • Putin’s invasion of Ukraine was not the primary driver of inflation; instead, it was the oil and gas price rise in 2021 when post gov’t lockdown demand bounced back
                                                                                                                                • Home prices rose massively thanks to Fed’s nearly-free money, and soon could start contracting
                                                                                                                                • The oil price fell 6.1% YoY in Jan, down from its Jun-22 high rise of 60.8%; disinflation is in full swing
                                                                                                                                • Home prices continued slowing from the July 2021 peak YoY change of 18%
                                                                                                                                
                                                                                                                                

                                                                                                                                Key points

                                                                                                                                • Jan. US CPI was up 6.4% YoY, continuing its fall from its 9.1% peak in June 2022
                                                                                                                                • The 6.4% level was kept high mainly by high food and energy prices
                                                                                                                                • It was a slight YoY slowdown compared to Dec-22, which was 6.5%
                                                                                                                                • Food was up 10.1% YoY but continued its 5th straight month of decline
                                                                                                                                • Food peaked in Aug-22 at 11.4%
                                                                                                                                • The 10.1% food price rise was driven by food consumed at home which was up 11.3%
                                                                                                                                • Though oil price has fallen, prior oil price shocks are still feeding into the food supply chain
                                                                                                                                • In addition, food supply chains seemed to still be damaged by the US gov’t economy lockdown
                                                                                                                                • Energy component of CPI rose 8.7% YoY, Oil was $100/bbl in Jul-2022, now at $80bbl
                                                                                                                                • When you smooth price changes with a 12mma you see that oil price is the driver
                                                                                                                                • Energy commodities prices were up only 2.8%, thanks to a slower oil and gas price rise
                                                                                                                                • Energy services were up 15.6%, driven by the prior oil price spikes feeding through
                                                                                                                                • All other items didn’t rise as much and are coming down more slowly
                                                                                                                                • This component of CPI is slow to adjust
                                                                                                                                • This is why a few months ago, when I last looked at US inflation, I mentioned that inflation was unlikely to come crashing down
                                                                                                                                • Ex-food and energy items benefited from fall in used vehicle prices; shelter remains high
                                                                                                                                • Price rises were low for Apparel (3.1%), New vehicles (5.8%), Used cars and trucks (Negative 11.6%), and Medical care commodities (3.4%)
                                                                                                                                • Energy, despite its small weight in CPI, seems to always drive consumer prices
                                                                                                                                • Did Putin’s invasion of Ukraine drive inflation?
                                                                                                                                • Oil and gas prices started their rise in 2021 when post gov’t lockdown demand kicked on
                                                                                                                                • Home prices rose massively thanks to Fed’s nearly-free money, now falling to neg?
                                                                                                                                • Oil price has already moved to negative, it looks like disinflation is in full swing
                                                                                                                                • The 2007 YoY housing price increase maxed at 10%; it peaked at 19% in July 2021
                                                                                                                                
                                                                                                                                

                                                                                                                                 

                                                                                                                                Click here to get the PDF with all charts and graphs

                                                                                                                                 

                                                                                                                                Andrew’s books

                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • My Worst Investment Ever
                                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s online programs

                                                                                                                                • Valuation Master Class
                                                                                                                                • The Become a Better Investor Community
                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                                • Achieve Your Goals
                                                                                                                                
                                                                                                                                

                                                                                                                                Connect with Andrew Stotz:

                                                                                                                                • astotz.com
                                                                                                                                • LinkedIn
                                                                                                                                • Facebook
                                                                                                                                • Instagram
                                                                                                                                • Twitter
                                                                                                                                • YouTube
                                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                                
                                                                                                                                ]]>How rising rates and oil prices are contributing to 6.4% inflation in the US

                                                                                                                                Click here to get the PDF with all charts and graphs

                                                                                                                                What do you think: Are we headed for a recession or has the Fed engineered a soft landing?

                                                                                                                                • Jan. US CPI was up 6.4% YoY, continuing its slide from the June 2022 9.1% YoY peak, driven by high food and energy-related products
                                                                                                                                • Food was up 10.1% YoY but continued its 5th straight month of slowdown, driven by food consumed at home was up 11.3%
                                                                                                                                • The energy component of CPI rose 8.7% YoY; Oil was $100/bbl in Jul-2022; it’s now down to $80bbl. Oil price is the driver; however, energy commodities prices were up only 2.8%, thanks to a slower oil and gas price rise
                                                                                                                                • All other items excluding food and energy never rose as much and are coming down more slowly. This group benefited from negative used vehicle prices, but shelter costs keep it high
                                                                                                                                • Over the long term, energy, despite its small weight in CPI, drives consumer prices
                                                                                                                                • Putin’s invasion of Ukraine was not the primary driver of inflation; instead, it was the oil and gas price rise in 2021 when post gov’t lockdown demand bounced back
                                                                                                                                • Home prices rose massively thanks to Fed’s nearly-free money, and soon could start contracting
                                                                                                                                • The oil price fell 6.1% YoY in Jan, down from its Jun-22 high rise of 60.8%; disinflation is in full swing
                                                                                                                                • Home prices continued slowing from the July 2021 peak YoY change of 18%
                                                                                                                                
                                                                                                                                

                                                                                                                                Key points

                                                                                                                                • Jan. US CPI was up 6.4% YoY, continuing its fall from its 9.1% peak in June 2022
                                                                                                                                • The 6.4% level was kept high mainly by high food and energy prices
                                                                                                                                • It was a slight YoY slowdown compared to Dec-22, which was 6.5%
                                                                                                                                • Food was up 10.1% YoY but continued its 5th straight month of decline
                                                                                                                                • Food peaked in Aug-22 at 11.4%
                                                                                                                                • The 10.1% food price rise was driven by food consumed at home which was up 11.3%
                                                                                                                                • Though oil price has fallen, prior oil price shocks are still feeding into the food supply chain
                                                                                                                                • In addition, food supply chains seemed to still be damaged by the US gov’t economy lockdown
                                                                                                                                • Energy component of CPI rose 8.7% YoY, Oil was $100/bbl in Jul-2022, now at $80bbl
                                                                                                                                • When you smooth price changes with a 12mma you see that oil price is the driver
                                                                                                                                • Energy commodities prices were up only 2.8%, thanks to a slower oil and gas price rise
                                                                                                                                • Energy services were up 15.6%, driven by the prior oil price spikes feeding through
                                                                                                                                • All other items didn’t rise as much and are coming down more slowly
                                                                                                                                • This component of CPI is slow to adjust
                                                                                                                                • This is why a few months ago, when I last looked at US inflation, I mentioned that inflation was unlikely to come crashing down
                                                                                                                                • Ex-food and energy items benefited from fall in used vehicle prices; shelter remains high
                                                                                                                                • Price rises were low for Apparel (3.1%), New vehicles (5.8%), Used cars and trucks (Negative 11.6%), and Medical care commodities (3.4%)
                                                                                                                                • Energy, despite its small weight in CPI, seems to always drive consumer prices
                                                                                                                                • Did Putin’s invasion of Ukraine drive inflation?
                                                                                                                                • Oil and gas prices started their rise in 2021 when post gov’t lockdown demand kicked on
                                                                                                                                • Home prices rose massively thanks to Fed’s nearly-free money, now falling to neg?
                                                                                                                                • Oil price has already moved to negative, it looks like disinflation is in full swing
                                                                                                                                • The 2007 YoY housing price increase maxed at 10%; it peaked at 19% in July 2021
                                                                                                                                
                                                                                                                                

                                                                                                                                 

                                                                                                                                Click here to get the PDF with all charts and graphs

                                                                                                                                 

                                                                                                                                Andrew’s books

                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • My Worst Investment Ever
                                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s online programs

                                                                                                                                • Valuation Master Class
                                                                                                                                • The Become a Better Investor Community
                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                                • Achieve Your Goals
                                                                                                                                
                                                                                                                                

                                                                                                                                Connect with Andrew Stotz:

                                                                                                                                • astotz.com
                                                                                                                                • LinkedIn
                                                                                                                                • Facebook
                                                                                                                                • Instagram
                                                                                                                                • Twitter
                                                                                                                                • YouTube
                                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                                
                                                                                                                                ]]>e9b08a0c-5e79-4fd3-8768-7123ccadec37Fri, 17 Feb 2023 06:00:00 +070012:55falsefullHow rising rates and oil prices are contributing to 6.4% inflation in the USPia Singh – Mistakes Are Inevitable, So Be PreparedBIO: Pia Singh is a Business Growth Strategist with 15+ years of experience in helping companies find ways to save on the bottom line and drive topline growth. She is a recognized Growth Strategist with excellent strategic planning capabilities.

                                                                                                                                STORY: Pia invested a substantial amount of her wedding money in a friend’s business. She lost everything she had invested and had to take a loan to pay for her wedding.

                                                                                                                                LEARNING: There are no shortcuts in investing; you must do your due diligence to succeed. Don’t make a rash investment decision without doing your research. Mistakes are inevitable, so be prepared.

                                                                                                                                 

                                                                                                                                “We make bad decisions all the time, and that’s okay.”

                                                                                                                                Pia Singh

                                                                                                                                 

                                                                                                                                Guest profile

                                                                                                                                Pia Singh is a Business Growth Strategist with 15+ years of experience in helping companies find ways to save on the bottom line and drive topline growth. She is a recognized Growth Strategist with excellent strategic planning capabilities.

                                                                                                                                She is a part of 2 World Records in Training and Business Growth and has authored four books on business startups and scaleups.

                                                                                                                                Nowadays, Pia is applying years of experience to build a Brain Health Company - The MindSmith.

                                                                                                                                Worst investment ever

                                                                                                                                Pia was 29 and was supposed to get married in about three to four months. Her parents went on and on about everything they needed to do for the wedding. The wedding planning got out of hand and out of budget. Pia started thinking of what she could do to help her parents.

                                                                                                                                One of Pia’s very good friends and her ex-colleague contacted her out of the blue and told her of a business she was building. The friend wanted Pia to be a part of it.

                                                                                                                                Pia met her friend, who showed her the business plan. It looked like a beautiful plan. It was all on paper; the numbers were all there, and they were achievable. Pia believed the business would give her good money in the next three to four months—which she badly needed for her wedding.

                                                                                                                                Pia pulled a substantial amount out of the funds kept for her wedding and invested in her friend’s business. Pia tried to apply all the processes to make money from the business, but four months later, she had not made any money. It was almost time for her wedding, and Pia didn’t have enough money saved. She had to take a loan to compensate for the funds she withdrew to invest in the business.

                                                                                                                                Pia eventually gave up on the business and had to pay the bank loan out of pocket. Pia experienced a double loss; the amount she invested in the company and the interest she paid for the loan.

                                                                                                                                Lessons learned

                                                                                                                                • There are no shortcuts in investing; you must do your due diligence to succeed.
                                                                                                                                • Before you invest in any business, talk to as many people as possible within that industry to see if this has been done before and if it’s viable.
                                                                                                                                • Pick the brains of the experts you have in your community so you can learn from their mistakes.
                                                                                                                                • Let the experts do their work if you lack expertise in a particular area.
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s takeaways

                                                                                                                                • Don’t make a rash investment decision without doing your research.
                                                                                                                                • Good things can happen to you through luck. But you can’t build a life around chance.
                                                                                                                                • Nothing good comes easy. And if you see something really good coming easy, start asking questions.
                                                                                                                                • Set up a process.
                                                                                                                                • Mistakes are inevitable, so be prepared.
                                                                                                                                
                                                                                                                                

                                                                                                                                Actionable advice

                                                                                                                                Do your research because nothing speaks to success more than the efforts that you’ve put in. If you have experts around you, talk to them. If you don’t know about something, and you want to get into it, talk to at least 20 people from different geographies and directions who are involved with that sort of thing, who have tried it, to understand what it takes to succeed.

                                                                                                                                Pia’s recommendations

                                                                                                                                Pia recommends subscribing to her MindSmith LinkedIn page to access resources and monthly lives on various topics such as self-esteem. You’ll also find tips and tricks, so you don’t have to wait for an appointment with a doctor or an expert.

                                                                                                                                No.1 goal for the next 12 months

                                                                                                                                Pia’s number one goal for the next 12 months is to build a task force across India that will ensure people are trained in primary healthcare so they can identify and refer people to get treatment before it gets out of hand.

                                                                                                                                Parting words

                                                                                                                                 

                                                                                                                                “Good judgment comes from experience, and experience comes from bad judgment.”

                                                                                                                                Pia Singh

                                                                                                                                 

                                                                                                                                [spp-transcript]

                                                                                                                                 

                                                                                                                                Connect with Pia Singh

                                                                                                                                • LinkedIn
                                                                                                                                • Twitter
                                                                                                                                • Instagram
                                                                                                                                • Facebook
                                                                                                                                • Website
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s books

                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • My Worst Investment Ever
                                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s online programs

                                                                                                                                • Valuation Master Class
                                                                                                                                • The Become a Better Investor Community
                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                                • Achieve Your Goals
                                                                                                                                
                                                                                                                                

                                                                                                                                Connect with Andrew Stotz:

                                                                                                                                • astotz.com
                                                                                                                                • LinkedIn
                                                                                                                                • Facebook
                                                                                                                                • Instagram
                                                                                                                                • Twitter
                                                                                                                                • YouTube
                                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                                
                                                                                                                                ]]>BIO: Pia Singh is a Business Growth Strategist with 15+ years of experience in helping companies find ways to save on the bottom line and drive topline growth. She is a recognized Growth Strategist with excellent strategic planning capabilities.

                                                                                                                                STORY: Pia invested a substantial amount of her wedding money in a friend’s business. She lost everything she had invested and had to take a loan to pay for her wedding.

                                                                                                                                LEARNING: There are no shortcuts in investing; you must do your due diligence to succeed. Don’t make a rash investment decision without doing your research. Mistakes are inevitable, so be prepared.

                                                                                                                                 

                                                                                                                                “We make bad decisions all the time, and that’s okay.”

                                                                                                                                Pia Singh

                                                                                                                                 

                                                                                                                                Guest profile

                                                                                                                                Pia Singh is a Business Growth Strategist with 15+ years of experience in helping companies find ways to save on the bottom line and drive topline growth. She is a recognized Growth Strategist with excellent strategic planning capabilities.

                                                                                                                                She is a part of 2 World Records in Training and Business Growth and has authored four books on business startups and scaleups.

                                                                                                                                Nowadays, Pia is applying years of experience to build a Brain Health Company - The MindSmith.

                                                                                                                                Worst investment ever

                                                                                                                                Pia was 29 and was supposed to get married in about three to four months. Her parents went on and on about everything they needed to do for the wedding. The wedding planning got out of hand and out of budget. Pia started thinking of what she could do to help her parents.

                                                                                                                                One of Pia’s very good friends and her ex-colleague contacted her out of the blue and told her of a business she was building. The friend wanted Pia to be a part of it.

                                                                                                                                Pia met her friend, who showed her the business plan. It looked like a beautiful plan. It was all on paper; the numbers were all there, and they were achievable. Pia believed the business would give her good money in the next three to four months—which she badly needed for her wedding.

                                                                                                                                Pia pulled a substantial amount out of the funds kept for her wedding and invested in her friend’s business. Pia tried to apply all the processes to make money from the business, but four months later, she had not made any money. It was almost time for her wedding, and Pia didn’t have enough money saved. She had to take a loan to compensate for the funds she withdrew to invest in the business.

                                                                                                                                Pia eventually gave up on the business and had to pay the bank loan out of pocket. Pia experienced a double loss; the amount she invested in the company and the interest she paid for the loan.

                                                                                                                                Lessons learned

                                                                                                                                • There are no shortcuts in investing; you must do your due diligence to succeed.
                                                                                                                                • Before you invest in any business, talk to as many people as possible within that industry to see if this has been done before and if it’s viable.
                                                                                                                                • Pick the brains of the experts you have in your community so you can learn from their mistakes.
                                                                                                                                • Let the experts do their work if you lack expertise in a particular area.
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s takeaways

                                                                                                                                • Don’t make a rash investment decision without doing your research.
                                                                                                                                • Good things can happen to you through luck. But you can’t build a life around chance.
                                                                                                                                • Nothing good comes easy. And if you see something really good coming easy, start asking questions.
                                                                                                                                • Set up a process.
                                                                                                                                • Mistakes are inevitable, so be prepared.
                                                                                                                                
                                                                                                                                

                                                                                                                                Actionable advice

                                                                                                                                Do your research because nothing speaks to success more than the efforts that you’ve put in. If you have experts around you, talk to them. If you don’t know about something, and you want to get into it, talk to at least 20 people from different geographies and directions who are involved with that sort of thing, who have tried it, to understand what it takes to succeed.

                                                                                                                                Pia’s recommendations

                                                                                                                                Pia recommends subscribing to her MindSmith LinkedIn page to access resources and monthly lives on various topics such as self-esteem. You’ll also find tips and tricks, so you don’t have to wait for an appointment with a doctor or an expert.

                                                                                                                                No.1 goal for the next 12 months

                                                                                                                                Pia’s number one goal for the next 12 months is to build a task force across India that will ensure people are trained in primary healthcare so they can identify and refer people to get treatment before it gets out of hand.

                                                                                                                                Parting words

                                                                                                                                 

                                                                                                                                “Good judgment comes from experience, and experience comes from bad judgment.”

                                                                                                                                Pia Singh

                                                                                                                                 

                                                                                                                                [spp-transcript]

                                                                                                                                 

                                                                                                                                Connect with Pia Singh

                                                                                                                                • LinkedIn
                                                                                                                                • Twitter
                                                                                                                                • Instagram
                                                                                                                                • Facebook
                                                                                                                                • Website
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s books

                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • My Worst Investment Ever
                                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s online programs

                                                                                                                                • Valuation Master Class
                                                                                                                                • The Become a Better Investor Community
                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                                • Achieve Your Goals
                                                                                                                                
                                                                                                                                

                                                                                                                                Connect with Andrew Stotz:

                                                                                                                                • astotz.com
                                                                                                                                • LinkedIn
                                                                                                                                • Facebook
                                                                                                                                • Instagram
                                                                                                                                • Twitter
                                                                                                                                • YouTube
                                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                                
                                                                                                                                ]]>67eb7be5-eab1-4838-8e03-5348378b8812Wed, 15 Feb 2023 06:00:00 +070021:17falsefullPia Singh is a Business Growth Strategist with 15+ years of experience in helping companies find ways to save on the bottom line and drive topline growth. She is a recognized Growth Strategist with excellent strategic planning capabilities.Raghav Kapoor – Be on High Alert When You’re Doing WellBIO: Raghav Kapoor is the CEO and Co-Founder of Smartkarma, an Asia-focused Investment Research Network that serves global institutional investors, corporates, and private wealth.

                                                                                                                                STORY: Raghav invested 2% of his portfolio in a biotech company in the US simply because it was run by people he believed had a good reputation. He ended up losing 98% of his investment.

                                                                                                                                LEARNING: Invest within your area of competence or expertise. Capital preservation and compounding are essential. Great people get it wrong too.

                                                                                                                                 

                                                                                                                                “I try to get in early on an investment that I know is so simple that I can explain it in one sentence, and almost everyone would agree to it.”

                                                                                                                                Raghav Kapoor

                                                                                                                                 

                                                                                                                                Guest profile

                                                                                                                                Raghav Kapoor is the CEO and Co-Founder of Smartkarma, an Asia-focused Investment Research Network that serves global institutional investors, corporates, and private wealth.

                                                                                                                                Subscribe to Smartkarma Plus - Institutional Level Investment Insight for the Aspirational Investor at a special welcome offer of just $1.99 for the first month.

                                                                                                                                Worst investment ever

                                                                                                                                In 2021, Raghav had an excellent portfolio performance behind him. He got overzealous and invested in a US biotech company. There were a lot of things that looked really great about this company. For starters, the company had been operational for about 15 years. They were developing a new platform for cancer research and drugs, and the specific type of cancers they were trying to cure were called orphan cancers. These are cancers that affect a tiny percentage of the global population. But they’re almost always fatal. Because they affect such a small percentage of the population, the Big Pharma companies don’t have a big incentive to try and come up with medication.

                                                                                                                                This company firmly believed it could cure some orphan cancers using hormone treatment. They had been doing this research for many years and had quite a bit of success. At some point, the company joined a more prominent group well-known in the US. The group had an impeccable track record and had taken a controlling stake in this business.

                                                                                                                                In addition to the research that they were doing, the company was also sitting on a beautiful piece of real estate in downtown New York—that alone was worth almost 40-50 % of their market cap. Because most of the company’s value and revenue at that time came from that commercial real estate, it was misclassified in all the industries as a real estate company even though it was a biotech company. And so it used to trade at a discount to book value, whereas biotech stocks back then were trading at very rich valuations.

                                                                                                                                The company hired a guy heading the oncology practice at Novartis, one of the largest Big Pharma firms. He joined as the CEO of this small company and went on to build a solid bench of illustrious managers and board members. The company’s first drug went into phase three trials. According to initial valuation, even the smallest of these drugs would generate about $5 billion per year of revenue stream. When you look at how these things are valued, you can get at least a two times revenue multiple because these are very high-margin businesses. So it looked likely that the company would get bought out even before the trial results came out.

                                                                                                                                After analyzing all these factors, Raghav predicted that the payoff of this investment would be about a 5,000% return on the upside. He decided to put 1% of his portfolio into this investment. Raghav figured that if this led to that 5,000% return, he would get many times his entire portfolio back. And if it dropped 60%, that would shave off about 60 basis points from his book in a year when he was up 40% to 50% overall.

                                                                                                                                The company did a small placement of $30 to $40 million. Raghav thought that was tactically very smart because such clinical trials are expensive. This placement brought in four or five pure healthcare investors, adding to the company’s credibility. The company also reclassified from real estate to healthcare, which would now unlock more value. The stock fell below the placement price, which had come at a discount. Raghav decided to double down on his position. So it went from being 1% to a 2% position.

                                                                                                                                Raghav waited and waited for something good to happen and push the stock up. Then one day, investors woke up to the news that the phase three trials had failed by a vast margin (from $50 to $1). Raghav lost 98% of his investment.

                                                                                                                                Lessons learned

                                                                                                                                • When investing, don’t step very far out of your area of expertise or competence.
                                                                                                                                • It’s tough to get an excellent risk-adjusted return when you take bets outside your area of competence.
                                                                                                                                • Sizing and trading decisions have a tremendous impact on eventual returns or losses.
                                                                                                                                • Just because great people are involved in a business doesn’t necessarily make the business successful.
                                                                                                                                • Capital preservation and compounding are essential.
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s takeaways

                                                                                                                                • Be more cautious as you grow older and avoid high-risk investments.
                                                                                                                                • Great people get it wrong too. Don’t blindly follow them, as you don’t know their objectives
                                                                                                                                • Be on high alert when your portfolio is doing great.
                                                                                                                                
                                                                                                                                

                                                                                                                                Actionable advice

                                                                                                                                Before investing, ask yourself if you know enough about this industry or space to have some edge. Do you have a really good feeling about this? When new information comes, you will learn how to process it quite intuitively.

                                                                                                                                Raghav’s recommendations

                                                                                                                                Raghav recommends Smartkarma as the go-to resource for anyone focusing on Asian companies and looking for sound independent research.

                                                                                                                                No.1 goal for the next 12 months

                                                                                                                                Raghav’s number one goal for the next 12 months is to spend a lot more time grooming leaders within his company and meeting external stakeholders more. Raghav also wants to prioritize his health a lot more this year.

                                                                                                                                Parting words

                                                                                                                                 

                                                                                                                                “I’ve never stopped investing because I think it’s the biggest superpower that nobody teaches you in school. It’s also something you can do until the moment you die. So never stop investing.”

                                                                                                                                Raghav Kapoor

                                                                                                                                 

                                                                                                                                [spp-transcript]

                                                                                                                                 

                                                                                                                                Connect with Raghav Kapoor

                                                                                                                                • LinkedIn
                                                                                                                                • Twitter
                                                                                                                                • YouTube
                                                                                                                                • Blog
                                                                                                                                • Website
                                                                                                                                • Podcast
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s books

                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • My Worst Investment Ever
                                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s online programs

                                                                                                                                • Valuation Master Class
                                                                                                                                • The Become a Better Investor Community
                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                                • Achieve Your Goals
                                                                                                                                
                                                                                                                                

                                                                                                                                Connect with Andrew...]]>BIO: Raghav Kapoor is the CEO and Co-Founder of Smartkarma, an Asia-focused Investment Research Network that serves global institutional investors, corporates, and private wealth.

                                                                                                                                STORY: Raghav invested 2% of his portfolio in a biotech company in the US simply because it was run by people he believed had a good reputation. He ended up losing 98% of his investment.

                                                                                                                                LEARNING: Invest within your area of competence or expertise. Capital preservation and compounding are essential. Great people get it wrong too.

                                                                                                                                 

                                                                                                                                “I try to get in early on an investment that I know is so simple that I can explain it in one sentence, and almost everyone would agree to it.”

                                                                                                                                Raghav Kapoor

                                                                                                                                 

                                                                                                                                Guest profile

                                                                                                                                Raghav Kapoor is the CEO and Co-Founder of Smartkarma, an Asia-focused Investment Research Network that serves global institutional investors, corporates, and private wealth.

                                                                                                                                Subscribe to Smartkarma Plus - Institutional Level Investment Insight for the Aspirational Investor at a special welcome offer of just $1.99 for the first month.

                                                                                                                                Worst investment ever

                                                                                                                                In 2021, Raghav had an excellent portfolio performance behind him. He got overzealous and invested in a US biotech company. There were a lot of things that looked really great about this company. For starters, the company had been operational for about 15 years. They were developing a new platform for cancer research and drugs, and the specific type of cancers they were trying to cure were called orphan cancers. These are cancers that affect a tiny percentage of the global population. But they’re almost always fatal. Because they affect such a small percentage of the population, the Big Pharma companies don’t have a big incentive to try and come up with medication.

                                                                                                                                This company firmly believed it could cure some orphan cancers using hormone treatment. They had been doing this research for many years and had quite a bit of success. At some point, the company joined a more prominent group well-known in the US. The group had an impeccable track record and had taken a controlling stake in this business.

                                                                                                                                In addition to the research that they were doing, the company was also sitting on a beautiful piece of real estate in downtown New York—that alone was worth almost 40-50 % of their market cap. Because most of the company’s value and revenue at that time came from that commercial real estate, it was misclassified in all the industries as a real estate company even though it was a biotech company. And so it used to trade at a discount to book value, whereas biotech stocks back then were trading at very rich valuations.

                                                                                                                                The company hired a guy heading the oncology practice at Novartis, one of the largest Big Pharma firms. He joined as the CEO of this small company and went on to build a solid bench of illustrious managers and board members. The company’s first drug went into phase three trials. According to initial valuation, even the smallest of these drugs would generate about $5 billion per year of revenue stream. When you look at how these things are valued, you can get at least a two times revenue multiple because these are very high-margin businesses. So it looked likely that the company would get bought out even before the trial results came out.

                                                                                                                                After analyzing all these factors, Raghav predicted that the payoff of this investment would be about a 5,000% return on the upside. He decided to put 1% of his portfolio into this investment. Raghav figured that if this led to that 5,000% return, he would get many times his entire portfolio back. And if it dropped 60%, that would shave off about 60 basis points from his book in a year when he was up 40% to 50% overall.

                                                                                                                                The company did a small placement of $30 to $40 million. Raghav thought that was tactically very smart because such clinical trials are expensive. This placement brought in four or five pure healthcare investors, adding to the company’s credibility. The company also reclassified from real estate to healthcare, which would now unlock more value. The stock fell below the placement price, which had come at a discount. Raghav decided to double down on his position. So it went from being 1% to a 2% position.

                                                                                                                                Raghav waited and waited for something good to happen and push the stock up. Then one day, investors woke up to the news that the phase three trials had failed by a vast margin (from $50 to $1). Raghav lost 98% of his investment.

                                                                                                                                Lessons learned

                                                                                                                                • When investing, don’t step very far out of your area of expertise or competence.
                                                                                                                                • It’s tough to get an excellent risk-adjusted return when you take bets outside your area of competence.
                                                                                                                                • Sizing and trading decisions have a tremendous impact on eventual returns or losses.
                                                                                                                                • Just because great people are involved in a business doesn’t necessarily make the business successful.
                                                                                                                                • Capital preservation and compounding are essential.

                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s takeaways

                                                                                                                                • Be more cautious as you grow older and avoid high-risk investments.
                                                                                                                                • Great people get it wrong too. Don’t blindly follow them, as you don’t know their objectives
                                                                                                                                • Be on high alert when your portfolio is doing great.

                                                                                                                                
                                                                                                                                

                                                                                                                                Actionable advice

                                                                                                                                Before investing, ask yourself if you know enough about this industry or space to have some edge. Do you have a really good feeling about this? When new information comes, you will learn how to process it quite intuitively.

                                                                                                                                Raghav’s recommendations

                                                                                                                                Raghav recommends Smartkarma as the go-to resource for anyone focusing on Asian companies and looking for sound independent research.

                                                                                                                                No.1 goal for the next 12 months

                                                                                                                                Raghav’s number one goal for the next 12 months is to spend a lot more time grooming leaders within his company and meeting external stakeholders more. Raghav also wants to prioritize his health a lot more this year.

                                                                                                                                Parting words

                                                                                                                                 

                                                                                                                                “I’ve never stopped investing because I think it’s the biggest superpower that nobody teaches you in school. It’s also something you can do until the moment you die. So never stop investing.”

                                                                                                                                Raghav Kapoor

                                                                                                                                 

                                                                                                                                [spp-transcript]

                                                                                                                                 

                                                                                                                                Connect with Raghav Kapoor

                                                                                                                                • LinkedIn
                                                                                                                                • Twitter
                                                                                                                                • YouTube
                                                                                                                                • Blog
                                                                                                                                • Website
                                                                                                                                • Podcast

                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s books

                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • My Worst Investment Ever
                                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points

                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s online programs

                                                                                                                                • Valuation Master Class
                                                                                                                                • The Become a Better Investor Community
                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                                • Achieve Your Goals

                                                                                                                                
                                                                                                                                

                                                                                                                                Connect with Andrew Stotz:

                                                                                                                                • astotz.com
                                                                                                                                • LinkedIn
                                                                                                                                • Facebook
                                                                                                                                • Instagram
                                                                                                                                • Twitter
                                                                                                                                • YouTube
                                                                                                                                • My Worst Investment Ever Podcast

                                                                                                                                
                                                                                                                                ]]>43b42e45-d103-4874-8f52-ce7996757c6bMon, 13 Feb 2023 06:00:00 +070035:29falsefullRaghav Kapoor is the CEO and Co-Founder of Smartkarma, an Asia-focused Investment Research Network that serves global institutional investors, corporates, and private wealth.ISMS 4: Bond Yields Are Showing the Fed Has Won Its Battle Against InflationEM don’t have reserve currency status, unlike DM they never benefited from zero rates

                                                                                                                                • Over the past 12 months, the World average 3mth gov’t bond rate rose from 1.7% to 5.0%
                                                                                                                                • That 3.3ppts rise highlights the rising interest rate environment we have been living through
                                                                                                                                • In the Developed markets 3mth rates rose from zero 12 months ago, before the Ukraine war started, to the current 3.3%
                                                                                                                                • Despite this strong rise, DM’s interest rates remained at a 1.7ppt discount to the world average
                                                                                                                                • Meaning EMs were rising equally fast
                                                                                                                                • So, let’s look at EMs
                                                                                                                                • Over the past year, 3mth rates rose from an already high 4.3% to 7.4%, up 3.1ppts, double the rate of DMs and a 2.4ppt premium to the World average
                                                                                                                                
                                                                                                                                

                                                                                                                                DM 10yr yield starting to fall, anticipating lower inflation; EM flat for a year

                                                                                                                                • World LT interest rates rose from 2.8% 12 months ago to 4% today, a 1.2ppts rise
                                                                                                                                • Developed markets saw a YoY interest rate rise from 1.2% to 2.9%, up 1.7ppts rise
                                                                                                                                • DM’s discount to the world interest rates rose from negative 1.6ppts to negative 1.1ppts
                                                                                                                                • EM had a small rise from 5.1% to 5.6% YoY, a small 0.5ppts rise on an already high rate
                                                                                                                                • EM premium to world fell from 2.4ppts to 1.6ppts
                                                                                                                                
                                                                                                                                

                                                                                                                                Key points & the bottom line

                                                                                                                                • EM never had reserve currency status, so unlike DM, they never benefited from zero rates
                                                                                                                                • Since rates have always been higher, borrowers in EMs have not had the same incentive to borrow as in the DMs; therefore, the balance sheet quality is strong
                                                                                                                                
                                                                                                                                

                                                                                                                                US led the rise, DM Europe is catching up, DM Pacific is now at a deep discount to world rates

                                                                                                                                • DM Americas rose from 0.2% to 4.7%, up 4.5ppts
                                                                                                                                • Its relative discount to the world narrowed from negative 1.5ppts to negative 0.3ppts
                                                                                                                                
                                                                                                                                

                                                                                                                                US led the rise, DM Europe is catching up, Japan now at a deep discount to world rates

                                                                                                                                • DM Europe rose from negative 0.4% to 2.5%, up 2.9ppts
                                                                                                                                • Its relative discount to the world widened from negative 2.1ppts to negative 2.5ppts
                                                                                                                                • DM Pacific rose from 0% to 1.1%
                                                                                                                                • Its relative discount widened from negative 1.7ppts to negative 3.9ppts
                                                                                                                                
                                                                                                                                

                                                                                                                                DM Europe LT rates rose most aggressively from near zero, preventing a currency collapse

                                                                                                                                • DM Americas rose from 1.8% to 3.4%, up 1.7ppts; rel. discount narrowed from -1% to -0.6%
                                                                                                                                • But LT rates fell slightly in January showing the market believes inflation has been tamed
                                                                                                                                • DM Europe rose from 0.6% to 2.8%, up 2.2ppts; rel. discount narrowed from -2.1% to -1.2%
                                                                                                                                • DM Pacific rose from 0.7% to 1.4%, 0.7ppts; rel. discount widened from -2% to -2.6%
                                                                                                                                
                                                                                                                                

                                                                                                                                Key points & the bottom line

                                                                                                                                • US led the rise, DM Europe is catching up, DM Pacific is now at a deep discount to world rates
                                                                                                                                • DM Europe LT rates rose most aggressively from near zero, preventing a currency collapse
                                                                                                                                • Importantly, LT rates fell slightly in January showing the market believes inflation has been tamed
                                                                                                                                
                                                                                                                                

                                                                                                                                Click here to get the PDF with all charts and graphs

                                                                                                                                 

                                                                                                                                Andrew’s books

                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • My Worst Investment Ever
                                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s online programs

                                                                                                                                • Valuation Master Class
                                                                                                                                • The Become a Better Investor Community
                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                                • Achieve Your Goals
                                                                                                                                
                                                                                                                                

                                                                                                                                Connect with Andrew Stotz:

                                                                                                                                • astotz.com
                                                                                                                                • LinkedIn
                                                                                                                                • Facebook
                                                                                                                                • Instagram
                                                                                                                                • Twitter
                                                                                                                                • YouTube
                                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                                
                                                                                                                                ]]>EM don’t have reserve currency status, unlike DM they never benefited from zero rates
                                                                                                                                • Over the past 12 months, the World average 3mth gov’t bond rate rose from 1.7% to 5.0%
                                                                                                                                • That 3.3ppts rise highlights the rising interest rate environment we have been living through
                                                                                                                                • In the Developed markets 3mth rates rose from zero 12 months ago, before the Ukraine war started, to the current 3.3%
                                                                                                                                • Despite this strong rise, DM’s interest rates remained at a 1.7ppt discount to the world average
                                                                                                                                • Meaning EMs were rising equally fast
                                                                                                                                • So, let’s look at EMs
                                                                                                                                • Over the past year, 3mth rates rose from an already high 4.3% to 7.4%, up 3.1ppts, double the rate of DMs and a 2.4ppt premium to the World average
                                                                                                                                
                                                                                                                                

                                                                                                                                DM 10yr yield starting to fall, anticipating lower inflation; EM flat for a year

                                                                                                                                • World LT interest rates rose from 2.8% 12 months ago to 4% today, a 1.2ppts rise
                                                                                                                                • Developed markets saw a YoY interest rate rise from 1.2% to 2.9%, up 1.7ppts rise
                                                                                                                                • DM’s discount to the world interest rates rose from negative 1.6ppts to negative 1.1ppts
                                                                                                                                • EM had a small rise from 5.1% to 5.6% YoY, a small 0.5ppts rise on an already high rate
                                                                                                                                • EM premium to world fell from 2.4ppts to 1.6ppts
                                                                                                                                
                                                                                                                                

                                                                                                                                Key points & the bottom line

                                                                                                                                • EM never had reserve currency status, so unlike DM, they never benefited from zero rates
                                                                                                                                • Since rates have always been higher, borrowers in EMs have not had the same incentive to borrow as in the DMs; therefore, the balance sheet quality is strong
                                                                                                                                
                                                                                                                                

                                                                                                                                US led the rise, DM Europe is catching up, DM Pacific is now at a deep discount to world rates

                                                                                                                                • DM Americas rose from 0.2% to 4.7%, up 4.5ppts
                                                                                                                                • Its relative discount to the world narrowed from negative 1.5ppts to negative 0.3ppts
                                                                                                                                
                                                                                                                                

                                                                                                                                US led the rise, DM Europe is catching up, Japan now at a deep discount to world rates

                                                                                                                                • DM Europe rose from negative 0.4% to 2.5%, up 2.9ppts
                                                                                                                                • Its relative discount to the world widened from negative 2.1ppts to negative 2.5ppts
                                                                                                                                • DM Pacific rose from 0% to 1.1%
                                                                                                                                • Its relative discount widened from negative 1.7ppts to negative 3.9ppts
                                                                                                                                
                                                                                                                                

                                                                                                                                DM Europe LT rates rose most aggressively from near zero, preventing a currency collapse

                                                                                                                                • DM Americas rose from 1.8% to 3.4%, up 1.7ppts; rel. discount narrowed from -1% to -0.6%
                                                                                                                                • But LT rates fell slightly in January showing the market believes inflation has been tamed
                                                                                                                                • DM Europe rose from 0.6% to 2.8%, up 2.2ppts; rel. discount narrowed from -2.1% to -1.2%
                                                                                                                                • DM Pacific rose from 0.7% to 1.4%, 0.7ppts; rel. discount widened from -2% to -2.6%
                                                                                                                                
                                                                                                                                

                                                                                                                                Key points & the bottom line

                                                                                                                                • US led the rise, DM Europe is catching up, DM Pacific is now at a deep discount to world rates
                                                                                                                                • DM Europe LT rates rose most aggressively from near zero, preventing a currency collapse
                                                                                                                                • Importantly, LT rates fell slightly in January showing the market believes inflation has been tamed
                                                                                                                                
                                                                                                                                

                                                                                                                                Click here to get the PDF with all charts and graphs

                                                                                                                                 

                                                                                                                                Andrew’s books

                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • My Worst Investment Ever
                                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s online programs

                                                                                                                                • Valuation Master Class
                                                                                                                                • The Become a Better Investor Community
                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                                • Achieve Your Goals
                                                                                                                                
                                                                                                                                

                                                                                                                                Connect with Andrew Stotz:

                                                                                                                                • astotz.com
                                                                                                                                • LinkedIn
                                                                                                                                • Facebook
                                                                                                                                • Instagram
                                                                                                                                • Twitter
                                                                                                                                • YouTube
                                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                                
                                                                                                                                ]]>5250c886-0d86-4dec-b169-798cde819c40Fri, 10 Feb 2023 06:00:00 +070007:06falsefullBond Yields Are Showing the Fed Has Won Its Battle Against InflationPraveen Kumar Rajbhar – Don’t Fall in Love with Your Own IdeasBIO: Praveen Kumar Rajbhar is an entrepreneur, founder, and CEO SkillingYou, an employability Skills Focused EdTech startup in rural India.

                                                                                                                                STORY: When Praveen started his first startup, he spent money to hire many people, buy a lot of gadgets, and rent a huge office space. The business collapsed in less than two years.

                                                                                                                                LEARNING: Get the right mentor to guide you on how to make your startup a success. You don’t need a big team to be successful. Get on-time and accurate financial statements every month.

                                                                                                                                 

                                                                                                                                “Having the right mentor will help you create a great company.”

                                                                                                                                Praveen Kumar Rajbhar

                                                                                                                                 

                                                                                                                                Guest profile

                                                                                                                                Praveen Kumar Rajbhar is an entrepreneur, founder, and CEO SkillingYou, an employability Skills Focused EdTech startup in rural India. It’s one of the top 100 promising startups ranked by Google and the Ministry of Electronics and Information Technology and is being incubated by Google, EdStart, Agora, and TiE.

                                                                                                                                Praveen has worked for over 13 years in corporates such as Axis Bank, Home Credit, Amway, SBI Cards, and AU Bank.

                                                                                                                                Worst investment ever

                                                                                                                                Praveen left his corporate job and started his first startup. Instead of controlling his expenses, Praveen hired more people than he needed, bought unnecessary gadgets, and rented colossal office space. In total, Praveen spent over $60,000 to run the startup. Being the family’s only breadwinner, he was soon in a lot of debt. The business collapsed in under two years.

                                                                                                                                Lessons learned

                                                                                                                                • Make sure that you understand your product before testing your market.
                                                                                                                                • People are your biggest strength as a founder and CEO. So surround yourself with the right mentors if you want to run a successful startup, don’t play it all alone.
                                                                                                                                • Work with a mentor in your industry or who has walked the path you want.
                                                                                                                                • Practical learning will give you strength and maturity, and you’ll know what not to do next.
                                                                                                                                • You can run a successful business with a small team.
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s takeaways

                                                                                                                                • A startup is a lifestyle.
                                                                                                                                • If you have a startup and are trying to grow it into something big, make sure you close your financial books monthly and have on-time and accurate financial statements.
                                                                                                                                • People want to help and are okay with sharing their experience and knowledge, so reach out.
                                                                                                                                
                                                                                                                                

                                                                                                                                Actionable advice

                                                                                                                                Before starting a startup, know your “why” because it will be a challenging journey, so you must understand why you want to do it. If you can’t do it for five years, don’t do it for five minutes.

                                                                                                                                Praveen’s recommendations

                                                                                                                                Praveen recommends checking out the My Worst Investment Ever website to learn what successful people did wrong and learn from their mistakes.

                                                                                                                                No.1 goal for the next 12 months

                                                                                                                                Praveen’s number one goal for the next 12 months is to impact one million students with essential employability skills that will help them get a job.

                                                                                                                                Parting words

                                                                                                                                 

                                                                                                                                “Just love whatever you’re doing. Never give up; it’s going to be a beautiful world tomorrow for you.”

                                                                                                                                Praveen Kumar Rajbhar

                                                                                                                                 

                                                                                                                                [spp-transcript]

                                                                                                                                 

                                                                                                                                Connect with Praveen Kumar Rajbhar

                                                                                                                                • LinkedIn
                                                                                                                                • Twitter
                                                                                                                                • Facebook
                                                                                                                                • Instagram
                                                                                                                                • YouTube
                                                                                                                                • Blog
                                                                                                                                • Website
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s books

                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • My Worst Investment Ever
                                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s online programs

                                                                                                                                • Valuation Master Class
                                                                                                                                • The Become a Better Investor Community
                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                                • Achieve Your Goals
                                                                                                                                
                                                                                                                                

                                                                                                                                Connect with Andrew Stotz:

                                                                                                                                • astotz.com
                                                                                                                                • LinkedIn
                                                                                                                                • Facebook
                                                                                                                                • Instagram
                                                                                                                                • Twitter
                                                                                                                                • YouTube
                                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                                
                                                                                                                                ]]>BIO: Praveen Kumar Rajbhar is an entrepreneur, founder, and CEO SkillingYou, an employability Skills Focused EdTech startup in rural India.

                                                                                                                                STORY: When Praveen started his first startup, he spent money to hire many people, buy a lot of gadgets, and rent a huge office space. The business collapsed in less than two years.

                                                                                                                                LEARNING: Get the right mentor to guide you on how to make your startup a success. You don’t need a big team to be successful. Get on-time and accurate financial statements every month.

                                                                                                                                 

                                                                                                                                “Having the right mentor will help you create a great company.”

                                                                                                                                Praveen Kumar Rajbhar

                                                                                                                                 

                                                                                                                                Guest profile

                                                                                                                                Praveen Kumar Rajbhar is an entrepreneur, founder, and CEO SkillingYou, an employability Skills Focused EdTech startup in rural India. It’s one of the top 100 promising startups ranked by Google and the Ministry of Electronics and Information Technology and is being incubated by Google, EdStart, Agora, and TiE.

                                                                                                                                Praveen has worked for over 13 years in corporates such as Axis Bank, Home Credit, Amway, SBI Cards, and AU Bank.

                                                                                                                                Worst investment ever

                                                                                                                                Praveen left his corporate job and started his first startup. Instead of controlling his expenses, Praveen hired more people than he needed, bought unnecessary gadgets, and rented colossal office space. In total, Praveen spent over $60,000 to run the startup. Being the family’s only breadwinner, he was soon in a lot of debt. The business collapsed in under two years.

                                                                                                                                Lessons learned

                                                                                                                                • Make sure that you understand your product before testing your market.
                                                                                                                                • People are your biggest strength as a founder and CEO. So surround yourself with the right mentors if you want to run a successful startup, don’t play it all alone.
                                                                                                                                • Work with a mentor in your industry or who has walked the path you want.
                                                                                                                                • Practical learning will give you strength and maturity, and you’ll know what not to do next.
                                                                                                                                • You can run a successful business with a small team.
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s takeaways

                                                                                                                                • A startup is a lifestyle.
                                                                                                                                • If you have a startup and are trying to grow it into something big, make sure you close your financial books monthly and have on-time and accurate financial statements.
                                                                                                                                • People want to help and are okay with sharing their experience and knowledge, so reach out.
                                                                                                                                
                                                                                                                                

                                                                                                                                Actionable advice

                                                                                                                                Before starting a startup, know your “why” because it will be a challenging journey, so you must understand why you want to do it. If you can’t do it for five years, don’t do it for five minutes.

                                                                                                                                Praveen’s recommendations

                                                                                                                                Praveen recommends checking out the My Worst Investment Ever website to learn what successful people did wrong and learn from their mistakes.

                                                                                                                                No.1 goal for the next 12 months

                                                                                                                                Praveen’s number one goal for the next 12 months is to impact one million students with essential employability skills that will help them get a job.

                                                                                                                                Parting words

                                                                                                                                 

                                                                                                                                “Just love whatever you’re doing. Never give up; it’s going to be a beautiful world tomorrow for you.”

                                                                                                                                Praveen Kumar Rajbhar

                                                                                                                                 

                                                                                                                                [spp-transcript]

                                                                                                                                 

                                                                                                                                Connect with Praveen Kumar Rajbhar

                                                                                                                                • LinkedIn
                                                                                                                                • Twitter
                                                                                                                                • Facebook
                                                                                                                                • Instagram
                                                                                                                                • YouTube
                                                                                                                                • Blog
                                                                                                                                • Website
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s books

                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • My Worst Investment Ever
                                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s online programs

                                                                                                                                • Valuation Master Class
                                                                                                                                • The Become a Better Investor Community
                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                                • Achieve Your Goals
                                                                                                                                
                                                                                                                                

                                                                                                                                Connect with Andrew Stotz:

                                                                                                                                • astotz.com
                                                                                                                                • LinkedIn
                                                                                                                                • Facebook
                                                                                                                                • Instagram
                                                                                                                                • Twitter
                                                                                                                                • YouTube
                                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                                
                                                                                                                                ]]>a46b94eb-e2ac-46f2-975c-16e86ce28b5dWed, 01 Feb 2023 06:00:00 +070026:55falsefullPraveen Kumar Rajbhar is an entrepreneur, founder, and CEO SkillingYou, an employability Skills Focused EdTech startup in rural India.Larry Swedroe – Beware of Idiosyncratic RisksBIO: Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners.

                                                                                                                                STORY: Larry chose to invest in an individual bank stock in the mid-80s instead of following his gut to invest in a portfolio of stocks. The bank’s President committed fraud, and the company went bankrupt. Larry lost about 80% of his investment.

                                                                                                                                LEARNING: Avoid idiosyncratic risks by hyper-diversifying your portfolio.

                                                                                                                                 

                                                                                                                                “Focus on managing risks and not trying to generate alpha or risk-adjusted outperformance.”

                                                                                                                                Larry Swedroe

                                                                                                                                 

                                                                                                                                Guest profile

                                                                                                                                Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with enthusiasm few can match.

                                                                                                                                Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                                                                                Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                                                                                Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                                                                                Worst investment ever

                                                                                                                                In the mid-80s, while Larry was working at Citicorp as the regional treasurer on the West Coast, his colleague and friend convinced him to invest in a company called Jefferson National Bank. Larry happened to believe in two themes that were behind his friend’s recommendation.

                                                                                                                                One, this was a small regional bank, and Larry was confident that the US would allow consolidation to build national banks. So there was going to be a trend of purchasing well-run small banks at premiums to enable the big banks to become national.

                                                                                                                                Two, the bank was located on the border between Canada and upstate New York. There was a military base with a good, sound community, making it suitable for businesses. Larry also believed NAFTA would pass, which would build up the trade in the area.

                                                                                                                                Larry then called a bunch of friends in the banking business and asked them what they thought of this company. Most were impressed by how well the bank was run and the good earnings. Everything seemed suitable for an investor.

                                                                                                                                The President of the bank committed fraud, and the company went bankrupt. Larry lost about 80% of his investment.

                                                                                                                                Looking at hindsight, Larry could have made a much more intelligent bet by avoiding idiosyncratic risks. He could have found a collection of regional stocks with the same advantages as the bank he invested in but without the idiosyncratic risk.

                                                                                                                                Lessons learned

                                                                                                                                Larry has, over time, developed three principles of investing:

                                                                                                                                • Principle one: If the markets are sufficiently efficient, invest in systematic, transparent, rapidly run funds that try to keep their trading costs down with patient trading.
                                                                                                                                • Principle two: All risk assets have to have very similar risk-adjusted returns.
                                                                                                                                • Principle three: Once you account for all risks, hyper-diversify your portfolio.
                                                                                                                                
                                                                                                                                

                                                                                                                                Actionable advice

                                                                                                                                If you need excitement from your life by trying to pick stocks and time in the market, take 1% of your portfolio that you’re willing to lose and go play the market. But don’t take your IRA account to the Merrill Lynch office because you’re more likely to lose it.

                                                                                                                                Larry’s recommendations

                                                                                                                                Larry recommends reading his book, Investment Mistakes Even Smart Investors Make and How to Avoid Them, so that you can learn from others’ mistakes than make them yourselves. He also recommends books by John Bogle and William Bernstein.

                                                                                                                                Parting words

                                                                                                                                 

                                                                                                                                “Ignorance is not an excuse for making mistakes; the best thing you can do is get educated.”

                                                                                                                                Larry Swedroe

                                                                                                                                 

                                                                                                                                [spp-transcript]

                                                                                                                                 

                                                                                                                                Connect with Larry Swedroe

                                                                                                                                • LinkedIn
                                                                                                                                • Twitter
                                                                                                                                • Website
                                                                                                                                • Books
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s books

                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • My Worst Investment Ever
                                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s online programs

                                                                                                                                • Valuation Master Class
                                                                                                                                • The Become a Better Investor Community
                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                                • Achieve Your Goals
                                                                                                                                
                                                                                                                                

                                                                                                                                Connect with Andrew Stotz:

                                                                                                                                • astotz.com
                                                                                                                                • LinkedIn
                                                                                                                                • Facebook
                                                                                                                                • Instagram
                                                                                                                                • Twitter
                                                                                                                                • YouTube
                                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                                
                                                                                                                                ]]>BIO: Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners.

                                                                                                                                STORY: Larry chose to invest in an individual bank stock in the mid-80s instead of following his gut to invest in a portfolio of stocks. The bank’s President committed fraud, and the company went bankrupt. Larry lost about 80% of his investment.

                                                                                                                                LEARNING: Avoid idiosyncratic risks by hyper-diversifying your portfolio.

                                                                                                                                 

                                                                                                                                “Focus on managing risks and not trying to generate alpha or risk-adjusted outperformance.”

                                                                                                                                Larry Swedroe

                                                                                                                                 

                                                                                                                                Guest profile

                                                                                                                                Larry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with enthusiasm few can match.

                                                                                                                                Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

                                                                                                                                Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

                                                                                                                                Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

                                                                                                                                Worst investment ever

                                                                                                                                In the mid-80s, while Larry was working at Citicorp as the regional treasurer on the West Coast, his colleague and friend convinced him to invest in a company called Jefferson National Bank. Larry happened to believe in two themes that were behind his friend’s recommendation.

                                                                                                                                One, this was a small regional bank, and Larry was confident that the US would allow consolidation to build national banks. So there was going to be a trend of purchasing well-run small banks at premiums to enable the big banks to become national.

                                                                                                                                Two, the bank was located on the border between Canada and upstate New York. There was a military base with a good, sound community, making it suitable for businesses. Larry also believed NAFTA would pass, which would build up the trade in the area.

                                                                                                                                Larry then called a bunch of friends in the banking business and asked them what they thought of this company. Most were impressed by how well the bank was run and the good earnings. Everything seemed suitable for an investor.

                                                                                                                                The President of the bank committed fraud, and the company went bankrupt. Larry lost about 80% of his investment.

                                                                                                                                Looking at hindsight, Larry could have made a much more intelligent bet by avoiding idiosyncratic risks. He could have found a collection of regional stocks with the same advantages as the bank he invested in but without the idiosyncratic risk.

                                                                                                                                Lessons learned

                                                                                                                                Larry has, over time, developed three principles of investing:

                                                                                                                                • Principle one: If the markets are sufficiently efficient, invest in systematic, transparent, rapidly run funds that try to keep their trading costs down with patient trading.
                                                                                                                                • Principle two: All risk assets have to have very similar risk-adjusted returns.
                                                                                                                                • Principle three: Once you account for all risks, hyper-diversify your portfolio.
                                                                                                                                
                                                                                                                                

                                                                                                                                Actionable advice

                                                                                                                                If you need excitement from your life by trying to pick stocks and time in the market, take 1% of your portfolio that you’re willing to lose and go play the market. But don’t take your IRA account to the Merrill Lynch office because you’re more likely to lose it.

                                                                                                                                Larry’s recommendations

                                                                                                                                Larry recommends reading his book, Investment Mistakes Even Smart Investors Make and How to Avoid Them, so that you can learn from others’ mistakes than make them yourselves. He also recommends books by John Bogle and William Bernstein.

                                                                                                                                Parting words

                                                                                                                                 

                                                                                                                                “Ignorance is not an excuse for making mistakes; the best thing you can do is get educated.”

                                                                                                                                Larry Swedroe

                                                                                                                                 

                                                                                                                                [spp-transcript]

                                                                                                                                 

                                                                                                                                Connect with Larry Swedroe

                                                                                                                                • LinkedIn
                                                                                                                                • Twitter
                                                                                                                                • Website
                                                                                                                                • Books
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s books

                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • My Worst Investment Ever
                                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s online programs

                                                                                                                                • Valuation Master Class
                                                                                                                                • The Become a Better Investor Community
                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                                • Achieve Your Goals
                                                                                                                                
                                                                                                                                

                                                                                                                                Connect with Andrew Stotz:

                                                                                                                                • astotz.com
                                                                                                                                • LinkedIn
                                                                                                                                • Facebook
                                                                                                                                • Instagram
                                                                                                                                • Twitter
                                                                                                                                • YouTube
                                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                                
                                                                                                                                ]]>99b0eae9-9fb5-4fdf-bf68-49460bd30cb1Mon, 30 Jan 2023 06:00:00 +070037:01falsefullLarry Swedroe is head of financial and economic research at Buckingham Wealth Partners.ISMS 3: Will the US Have a Recession or a Soft Landing?Never has the US gov’t caused such a massive move in GDP. The question is, “which way is GDP going?” Will we see a recession or a soft landing?

                                                                                                                                Click here to get the PDF with all charts and graphs

                                                                                                                                Reasons for a recession

                                                                                                                                • Extreme increases in interest rates are meant to slow down the economy
                                                                                                                                • The fastest rate-hike cycle by the Fed since the 1980s
                                                                                                                                • In the 2004 cycle, the target rate was hiked by 4.25% in total
                                                                                                                                • Same as in the current cycle, but it has now been done much faster
                                                                                                                                • The massive rise in mortgage rates is dramatically slowing the property market
                                                                                                                                • This, in turn, leads to crashing prices, which will make people feel less wealthy and hold them back from spending
                                                                                                                                • The yield curve has inverted, which has perfectly predicted prior recessions
                                                                                                                                • All recessions in the US since 1968 were preceded by an inverted yield curve
                                                                                                                                • The average time from inversion until the recession started was about 1 year (about mid-2023)
                                                                                                                                • The surge in spending supported by gov’t handouts is working itself out of the system
                                                                                                                                • Since 2Q21, households have demonstrated stronger than usual spending behavior
                                                                                                                                • Strong wage growth has contributed to more savings in 4Q21 onward
                                                                                                                                
                                                                                                                                

                                                                                                                                Reasons for a soft landing

                                                                                                                                • High employment means the economy is robust and can withstand the rate hikes
                                                                                                                                • Companies are highly profitable, which will allow them to bear a slowdown more easily
                                                                                                                                • Companies are sitting on tons of cash
                                                                                                                                • Individuals slowed their spending in anticipation of an economic slowdown
                                                                                                                                • Democrat party leadership will pump things up (e.g., strategic petroleum reserve)
                                                                                                                                • US banks are in a strong position, holding lots of cash and gov’t bonds
                                                                                                                                • Reducing the risk of a financial sector crisis that would exacerbate an economic crisis
                                                                                                                                • At the end of 2021, the banks had nearly 40% of their assets in cash and securities
                                                                                                                                • Compared to 13% at the end of 2007
                                                                                                                                • Gov’t spending is going to be crowded out by borrowing interest payments
                                                                                                                                • And then politicians will pressure the Fed to cut rates
                                                                                                                                
                                                                                                                                

                                                                                                                                Click here to get the PDF with all charts and graphs

                                                                                                                                 

                                                                                                                                Andrew’s books

                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • My Worst Investment Ever
                                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s online programs

                                                                                                                                • Valuation Master Class
                                                                                                                                • The Become a Better Investor Community
                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                                • Achieve Your Goals
                                                                                                                                
                                                                                                                                

                                                                                                                                Connect with Andrew Stotz:

                                                                                                                                • astotz.com
                                                                                                                                • LinkedIn
                                                                                                                                • Facebook
                                                                                                                                • Instagram
                                                                                                                                • Twitter
                                                                                                                                • YouTube
                                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                                
                                                                                                                                ]]>Never has the US gov’t caused such a massive move in GDP. The question is, “which way is GDP going?” Will we see a recession or a soft landing?

                                                                                                                                Click here to get the PDF with all charts and graphs

                                                                                                                                Reasons for a recession

                                                                                                                                • Extreme increases in interest rates are meant to slow down the economy
                                                                                                                                • The fastest rate-hike cycle by the Fed since the 1980s
                                                                                                                                • In the 2004 cycle, the target rate was hiked by 4.25% in total
                                                                                                                                • Same as in the current cycle, but it has now been done much faster
                                                                                                                                • The massive rise in mortgage rates is dramatically slowing the property market
                                                                                                                                • This, in turn, leads to crashing prices, which will make people feel less wealthy and hold them back from spending
                                                                                                                                • The yield curve has inverted, which has perfectly predicted prior recessions
                                                                                                                                • All recessions in the US since 1968 were preceded by an inverted yield curve
                                                                                                                                • The average time from inversion until the recession started was about 1 year (about mid-2023)
                                                                                                                                • The surge in spending supported by gov’t handouts is working itself out of the system
                                                                                                                                • Since 2Q21, households have demonstrated stronger than usual spending behavior
                                                                                                                                • Strong wage growth has contributed to more savings in 4Q21 onward
                                                                                                                                
                                                                                                                                

                                                                                                                                Reasons for a soft landing

                                                                                                                                • High employment means the economy is robust and can withstand the rate hikes
                                                                                                                                • Companies are highly profitable, which will allow them to bear a slowdown more easily
                                                                                                                                • Companies are sitting on tons of cash
                                                                                                                                • Individuals slowed their spending in anticipation of an economic slowdown
                                                                                                                                • Democrat party leadership will pump things up (e.g., strategic petroleum reserve)
                                                                                                                                • US banks are in a strong position, holding lots of cash and gov’t bonds
                                                                                                                                • Reducing the risk of a financial sector crisis that would exacerbate an economic crisis
                                                                                                                                • At the end of 2021, the banks had nearly 40% of their assets in cash and securities
                                                                                                                                • Compared to 13% at the end of 2007
                                                                                                                                • Gov’t spending is going to be crowded out by borrowing interest payments
                                                                                                                                • And then politicians will pressure the Fed to cut rates
                                                                                                                                
                                                                                                                                

                                                                                                                                Click here to get the PDF with all charts and graphs

                                                                                                                                 

                                                                                                                                Andrew’s books

                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • My Worst Investment Ever
                                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s online programs

                                                                                                                                • Valuation Master Class
                                                                                                                                • The Become a Better Investor Community
                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                                • Achieve Your Goals
                                                                                                                                
                                                                                                                                

                                                                                                                                Connect with Andrew Stotz:

                                                                                                                                • astotz.com
                                                                                                                                • LinkedIn
                                                                                                                                • Facebook
                                                                                                                                • Instagram
                                                                                                                                • Twitter
                                                                                                                                • YouTube
                                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                                
                                                                                                                                ]]>934e021f-ff93-41ff-863c-f57b72f7964eFri, 27 Jan 2023 06:00:00 +070012:08falsefullNever has the US gov’t caused such a massive move in GDP. The question is, “which way is GDP going?” Will we see a recession or a soft landing?David Siegel – Don’t Reduce Climate Change to a ScoreBIO: David Siegel is an entrepreneur who has started more than a dozen companies. He has written five books on technology and business, given more than 200 professional speeches worldwide, and was once a candidate to be the dean of Stanford business school.

                                                                                                                                STORY: David joins the podcast again, this time around discussing climate change.

                                                                                                                                LEARNING: It’s wrong to reduce climate change to a score. We need a better alternative to the UN’s Environment, Social, and Governance (ESG) movement.

                                                                                                                                 

                                                                                                                                “You don’t have to do anything the way anybody tells you to. Go learn in the most irreverent way possible.”

                                                                                                                                David Siegel

                                                                                                                                 

                                                                                                                                Guest profile

                                                                                                                                David Siegel is an entrepreneur who has started more than a dozen companies. He has written five books on technology and business, has given more than 200 professional speeches around the world, and was once a candidate to be the dean of Stanford business school. He is a fintech leader, a leader of the open Metaverse movement, a business strategy coach, and an advocate for the scientific method. He writes and makes videos about climate change at www.climatecurious.com.

                                                                                                                                Worst investment ever

                                                                                                                                David is a previous guest who joined us on Ep98: Start-ups Should Start with Selling. In today’s episode, he tells us more about his research on climate change.

                                                                                                                                David’s penchant for climate change

                                                                                                                                David has been conducting research on climate change since 1988. He wrote his first book on climate in 1991. So David is not one of those instant climate experts. In 2015, he decided to really dig into the subject and spent an entire year doing nothing but climate research. During this extensive research, David realized that many scientists don’t understand climate change fully and that many people take it at its face value. He believes people need to understand climate change on its own merits and not as an overarching cause and effect. For this reason, David digs deep into research to present raw data and help people make up their minds.

                                                                                                                                In comes the UN’s ESG movement

                                                                                                                                The rigorous talks on climate change have metastasized into the global Environment, Social, and Governance (ESG) movement that has been forced on us by the World Economic Forum and the UN. ESG is a UN program strongly endorsed by the World Economic Forum and has been going on for 20 years. The point of ESG is to give every company a detailed scorecard of their carbon footprint, water use, energy, pollution, and other practices that affect climate change.

                                                                                                                                Every public company in the United States pays $2 billion yearly for compliance, which could go to $8 billion. David believes this money is spent so the companies can get a high score regardless of their efficiency.

                                                                                                                                Transparency is good; it’s just being done the wrong way

                                                                                                                                David believes that while we must have transparency where climate change is concerned, it’s not okay to reduce it to a score given by some consultants. He thinks the ESG scoring system simplifies a complex subject into a single set of numbers that don’t represent reality.

                                                                                                                                Moreover, ESG scoring is done arbitrarily, based on political assumptions and a set of unclear rules by anointed consultants selling indulgences. According to David, coming up with one score on something is full of problems and creates terrible incentives. In this case, companies won’t be efficient with the goal of fighting climate change but simply get a good score. And with the amount of money companies are paying, it really comes down to paying for the ratings. So there’s a lot of conflict of interest in the ESG scoring process.

                                                                                                                                The scoring will soon get personal

                                                                                                                                Currently, every US state and city must get an ESG ranking. David believes this will go further down to a personal ESG score. Soon, everyone will need to have a unique social credit score. This personal ESG score will be used to deny you access to financial services, rent, loans, how far and when you can travel, etc.

                                                                                                                                Let’s build a better alternative

                                                                                                                                David believes that the idea behind creating ESG is good. Still, we need to build a better alternative that’s more objective and efficient. He also insists that people should use independent thinking to combat climate change at an individual level. David’s advice is to participate where it makes sense and know when to go with the herd and when to go against it.

                                                                                                                                No.1 goal for the next 12 months

                                                                                                                                David’s number one goal for the next 12 months is to build his Cutting Through The Noise platform.

                                                                                                                                Parting words

                                                                                                                                 

                                                                                                                                “Develop yourself and learn all you can. Podcasts like Andrew’s are really valuable. Don’t take anything from other people; find your own way. Look at the data, learn to interpret it, and ask difficult, irritating questions.”

                                                                                                                                David Siegel

                                                                                                                                 

                                                                                                                                [spp-transcript]

                                                                                                                                 

                                                                                                                                Connect with David Siegel

                                                                                                                                • Twitter
                                                                                                                                • Website
                                                                                                                                • Blog
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s books

                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • My Worst Investment Ever
                                                                                                                                • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                                • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                                
                                                                                                                                

                                                                                                                                Andrew’s online programs

                                                                                                                                • Valuation Master Class
                                                                                                                                • The Become a Better Investor Community
                                                                                                                                • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                • Finance Made Ridiculously Simple
                                                                                                                                • FVMR Investing: Quantamental Investing Across the World
                                                                                                                                • Become a Great Presenter and Increase Your Influence
                                                                                                                                • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                                • Achieve Your Goals
                                                                                                                                
                                                                                                                                

                                                                                                                                Connect with Andrew Stotz:

                                                                                                                                • astotz.com
                                                                                                                                • LinkedIn
                                                                                                                                • Facebook
                                                                                                                                • Instagram
                                                                                                                                • Twitter
                                                                                                                                • YouTube
                                                                                                                                • My Worst Investment Ever Podcast
                                                                                                                                
                                                                                                                                

                                                                                                                                Further reading mentioned

                                                                                                                                • Hans Rosling (April 2018), Factfulness: Ten Reasons We're Wrong About the World--and Why Things Are Better Than You Think
                                                                                                                                • Todd B. Kashdan (February 2022), The Art of Insubordination: How to Dissent and Defy Effectively
                                                                                                                                • Greg Satell (April 3, 2019), “You don’t have to do anything the way anybody tells you to. Go learn in the most irreverent way possible.”

                                                                                                                                  David Siegel

                                                                                                                                   

                                                                                                                                  Guest profile

                                                                                                                                  David Siegel is an entrepreneur who has started more than a dozen companies. He has written five books on technology and business, has given more than 200 professional speeches around the world, and was once a candidate to be the dean of Stanford business school. He is a fintech leader, a leader of the open Metaverse movement, a business strategy coach, and an advocate for the scientific method. He writes and makes videos about climate change at www.climatecurious.com.

                                                                                                                                  Worst investment ever

                                                                                                                                  David is a previous guest who joined us on Ep98: Start-ups Should Start with Selling. In today’s episode, he tells us more about his research on climate change.

                                                                                                                                  David’s penchant for climate change

                                                                                                                                  David has been conducting research on climate change since 1988. He wrote his first book on climate in 1991. So David is not one of those instant climate experts. In 2015, he decided to really dig into the subject and spent an entire year doing nothing but climate research. During this extensive research, David realized that many scientists don’t understand climate change fully and that many people take it at its face value. He believes people need to understand climate change on its own merits and not as an overarching cause and effect. For this reason, David digs deep into research to present raw data and help people make up their minds.

                                                                                                                                  In comes the UN’s ESG movement

                                                                                                                                  The rigorous talks on climate change have metastasized into the global Environment, Social, and Governance (ESG) movement that has been forced on us by the World Economic Forum and the UN. ESG is a UN program strongly endorsed by the World Economic Forum and has been going on for 20 years. The point of ESG is to give every company a detailed scorecard of their carbon footprint, water use, energy, pollution, and other practices that affect climate change.

                                                                                                                                  Every public company in the United States pays $2 billion yearly for compliance, which could go to $8 billion. David believes this money is spent so the companies can get a high score regardless of their efficiency.

                                                                                                                                  Transparency is good; it’s just being done the wrong way

                                                                                                                                  David believes that while we must have transparency where climate change is concerned, it’s not okay to reduce it to a score given by some consultants. He thinks the ESG scoring system simplifies a complex subject into a single set of numbers that don’t represent reality.

                                                                                                                                  Moreover, ESG scoring is done arbitrarily, based on political assumptions and a set of unclear rules by anointed consultants selling indulgences. According to David, coming up with one score on something is full of problems and creates terrible incentives. In this case, companies won’t be efficient with the goal of fighting climate change but simply get a good score. And with the amount of money companies are paying, it really comes down to paying for the ratings. So there’s a lot of conflict of interest in the ESG scoring process.

                                                                                                                                  The scoring will soon get personal

                                                                                                                                  Currently, every US state and city must get an ESG ranking. David believes this will go further down to a personal ESG score. Soon, everyone will need to have a unique social credit score. This personal ESG score will be used to deny you access to financial services, rent, loans, how far and when you can travel, etc.

                                                                                                                                  Let’s build a better alternative

                                                                                                                                  David believes that the idea behind creating ESG is good. Still, we need to build a better alternative that’s more objective and efficient. He also insists that people should use independent thinking to combat climate change at an individual level. David’s advice is to participate where it makes sense and know when to go with the herd and when to go against it.

                                                                                                                                  No.1 goal for the next 12 months

                                                                                                                                  David’s number one goal for the next 12 months is to build his Cutting Through The Noise platform.

                                                                                                                                  Parting words

                                                                                                                                   

                                                                                                                                  “Develop yourself and learn all you can. Podcasts like Andrew’s are really valuable. Don’t take anything from other people; find your own way. Look at the data, learn to interpret it, and ask difficult, irritating questions.”

                                                                                                                                  David Siegel

                                                                                                                                   

                                                                                                                                  [spp-transcript]

                                                                                                                                   

                                                                                                                                  Connect with David Siegel

                                                                                                                                  • Twitter
                                                                                                                                  • Website
                                                                                                                                  • Blog
                                                                                                                                  
                                                                                                                                  

                                                                                                                                  Andrew’s books

                                                                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                  • My Worst Investment Ever
                                                                                                                                  • 9 Valuation Mistakes and How to Avoid Them
                                                                                                                                  • Transform Your Business with Dr.Deming’s 14 Points
                                                                                                                                  
                                                                                                                                  

                                                                                                                                  Andrew’s online programs

                                                                                                                                  • Valuation Master Class
                                                                                                                                  • The Become a Better Investor Community
                                                                                                                                  • How to Start Building Your Wealth Investing in the Stock Market
                                                                                                                                  • Finance Made Ridiculously Simple
                                                                                                                                  • FVMR Investing: Quantamental Investing Across the World
                                                                                                                                  • Become a Great Presenter and Increase Your Influence
                                                                                                                                  • Transform Your Business with Dr. Deming’s 14 Points
                                                                                                                                  • Achieve Your Goals
                                                                                                                                  
                                                                                                                                  

                                                                                                                                  Connect with Andrew Stotz:

                                                                                                                                  • astotz.com
                                                                                                                                  • LinkedIn
                                                                                                                                  • Facebook
                                                                                                                                  • Instagram
                                                                                                                                  • Twitter
                                                                                                                                  • YouTube
                                                                                                                                  • My Worst Investment Ever Podcast
                                                                                                                                  
                                                                                                                                  

                                                                                                                                  Further reading mentioned

                                                                                                                                  • Hans Rosling (April 2018), Factfulness: Ten Reasons We're Wrong About the World--and Why Things Are Better Than You Think
                                                                                                                                  • Todd B. Kashdan (February 2022), The Art of Insubordination: How to Dissent and Defy Effectively
                                                                                                                                  • Greg Satell (April 3, 2019), Cascades: How to Create a Movement that Drives Transformational Change
                                                                                                                                  
                                                                                                                                  ]]>04e8081c-14a3-43b0-80b6-8ed5cb8088a6Wed, 25 Jan 2023 06:00:00 +070043:23falsefullDavid Siegel is an entrepreneur who has started more than a dozen companies. He has written five books on technology and business, given more than 200 professional speeches worldwide, and was once a candidate to be the dean of Stanford business school.Maxwell Nee – Never Get Too Attached to an InvestmentBIO: Maxwell Nee is the Managing Partner of OENO Wine & Whisky Investment. He’s a multi-award-winning entrepreneur making alternative investments in wine and whisky.

                                                                                                                                  STORY: Maxwell bought an apartment in an off-plan contract and paid 45,000 Australian dollars as a downpayment. He was to pay the balance once the apartment was complete in about 36 months. Mid-project, he realized the deal was not worth it, so he pulled out of the contract and lost his downpayment.

                                                                                                                                  LEARNING: Slow down and think about something before you commit. It’s okay to walk away from a bad investment.

                                                                                                                                   

                                                                                                                                  “When you get fully committed to an investment, you only find reasons to fall more in love with it. Then it becomes harder and harder to walk away even if it looks bad.”

                                                                                                                                  Maxwell Nee

                                                                                                                                   

                                                                                                                                  Guest profile

                                                                                                                                  Maxwell Nee is the Managing Partner of OENO Wine & Whisky Investment. He’s a multi-award-winning entrepreneur who earns his investors a recession-proof and market-beating return with wine and whisky alternative investments.

                                                                                                                                  Worst investment ever

                                                                                                                                  When Maxwell was 21, he was in Brisbane, Australia, and the city was in the middle of a transition where everyone living in houses started to live in apartments. This led to developers building apartments everywhere, creating a massive oversupply.

                                                                                                                                  Maxwell decided to move with the trend and bought an apartment off-plan. The apartment was worth about AUD 450,000, and since the apartment wasn’t built yet, Maxwell would pay a 10% deposit and clear the balance after settling in—about 36 months later. He was absolutely in love with this plan from the moment he walked into the showroom. Maxwell used to watch the show Suits and always admired one of the lead character’s New York apartments—the showroom looked like this apartment. Maxwell was in love with the lifestyle of a young professional living in New York City. So he was sold on the property and didn’t even really care about the price.

                                                                                                                                  Maxwell borrowed money for the deposit and spent three months picking furniture, forks, cups, glasses, crystals, whiskey tumblers, and all this stuff in readiness to live in his dream apartment. All this excitement distracted him from doing any due diligence. Maxwell didn’t look at the metrics or research the developer. He simply signed an unconditional contract which meant that no matter what happened, he wouldn’t get out of the contract.

                                                                                                                                  About halfway through the project, Maxwell saw an article saying that because the place was so city-centric (it was in a boisterous place), and so the developer was legally obligated, according to the local council, to invest $10 million in triple-glazed glass. This was to protect the occupants from the noise. This was not good for the investors because it meant the developer would take that $10 million from them.

                                                                                                                                  Maxwell worked at the bank at the time. So he went to get a loan to pay the remaining amount. The valuer went to value the property and informed Maxwell that he could only value it at 88% of what he had signed up for. So his expected value of the apartment was already 12% down. Maxwell started forecasting how long it would take him to return to parity and realized it would be about seven or eight years. It was such a losing position.

                                                                                                                                  Maxwell’s loan was approved, but he decided last minute to walk away, even if it meant losing his deposit of $45,000. The developer tried to extract the balance from Maxwell, so he returned to his agent, who helped him find a replacement buyer. The new buyer only signed the deal because Maxwell signed over his deposit to them.

                                                                                                                                  Lessons learned

                                                                                                                                  • It never hurts to slow down and think about something before you commit.
                                                                                                                                  • It’s okay to look at other options before deciding what to invest in.
                                                                                                                                  • Make sure you double-check yourself if you get too attached to an investment.
                                                                                                                                  • If you’re not an expert, or it’s your first time doing something, get a mentor or a coach to teach. Or pay for someone to do it for you.
                                                                                                                                  
                                                                                                                                  

                                                                                                                                  Andr